Air Charter Brokers

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In the expanding air charter market, many air carriers and customers are turning to air charter brokers to assist in arranging transportation. By bringing customers and air carriers (e.g. Part 135 certificate holders) together, brokers play an important role in the marketplace. Most brokers and air carriers are familiar with FAA regulations regarding air charter, but may not be as familiar with Department of Transportation (DOT) regulations. Recently, the DOT has begun to make a concerted effort to clarify how existing regulations apply to air charter brokers. The DOT is most concerned with ensuring that the business practices of air charter brokers are fair and that consumers are adequately protected.

In 2004, the DOT issued a policy statement regarding “The Role of Air Charter Brokers in Arranging Air Transportation”. Although the DOT statement does not change existing policy, it does provide guidance on DOT’s view of acceptable broker practices. When reviewing the policy statement, it is helpful to think about the role being played by the broker in the following terms:

  • What role does the broker play?
    • Agent of the customer?
      • Through a contractual relationship with the customer, the air charter broker represents the customer with the purpose of finding appropriate air transportation, with a direct air carrier, generally for a fee for the service provided.
    • Agent of the direct air carrier?
      • Through a contractual relationship with the direct air carrier, the air charter broker markets/sells charter flights on the carrier’s behalf.
    • Indirect air carrier?
      • Any person who undertakes to engage indirectly in air transportation operations and who uses for such transportation the services of a direct air carrier.
  • Is the customer clearly informed of who is providing the transportation?
    • Does the customer know who the direct air carrier is?
  • Is the advertising clear as to the role of the broker and who the direct air carrier is/will be?
    • Does the broker advertise or conduct itself in a manner that would lead the public to believe it is an air carrier?

In response to the policy statement, NBAA developed a background paper that defines the key concepts presented by DOT. This paper is intended to serve as a resource for both air carriers and brokers.

DOT Advance NPRM on Consumer Information

Following the release of its policy statement, DOT published an advance notice of proposed rulemaking (ANPRM) titled “Consumer Information Regarding On-Demand Air Taxi Operations.” The DOT is seeking input on the NTSB recommendations from the Montrose accident that customers of on-demand air taxi services be advised, at the time they contract for a flight, of: (1) The name of the company with operational control of the flight; (2) any “doing business as” names contained in such company’s operations specifications; (3) the name of the aircraft owner; and (4) the name of any broker involved in arranging the flight.

In response to DOT’s request for input on this issue, NBAA filed a number of specific comments. NBAA will continue to remain engaged in this issue and work with DOT to develop any guidance or regulation for the broker industry.