FAA funding bill would ok charter-by-the-seat sales

 - July 30, 2008, 5:29 AM

The House bill reauthorizing FAA appropriations for the next four years contains an NBAA-sponsored provision that would allow on-demand air charter operators using turbine or multi-engine piston aircraft with 10 or fewer seats to sell individual seats at a negotiated price on flights between smaller airports.

Introduced by Rep. Steve Pearce (R-N.M.) as an amendment to the Flight 100-Century of Aviation Reauthorization Act (Flight 100-CARA), the measure is designed to increase air service to small communities. The concept is limited to a non-hub commercial airport and another airport or between an airport that is not a commercial service airport and another airport.

“This is the type of creative thinking needed to lead us into the second century of flight,” said NBAA past-president Jack Olcott. “If passed, this bill will allow the available and growing fleet of charter aircraft to provide additional service to airports and communities with limited access to our nation’s air transportation system.”

Flight 100-CARA was approved by the House Transportation and Infrastructure Committee on May 21 and is awaiting floor debate and a vote by the full House of Representatives. It contained the Pearce amendment, which would allow on-demand charter operators to legally publish a negotiated departure location, departure time and arrival location and to sell individual seats on the negotiated flight without being subject to the same FAA rules as a scheduled operation.

“Fundamentally, this is a paradigm shift in how an air carrier provides service from one of publishing a route and schedule and hoping people show up, to one of service driven by passenger needs,” explained Doug Carr, NBAA director of government affairs. “To further protect this new concept of air service, we suggested that it not compete directly with scheduled air carriers.”

Carr said NBAA, with the help of industry experts, decided to propose the concept to Pearce after hearing him repeatedly state his desire to find a new way to provide air service to small communities that do not enjoy scheduled airline service. The House version of the FAA reauthorization proposes only $65 million for the FAA’s Essential Air Service program, which has subsidized air transportation for certain qualifying communities for several years.

NBAA said the challenge with selling individual seats today lies not with the selling of seats, but rather with the FAA’s definition of a “scheduled operation.” The agency defines “scheduled operation,” which generally must operate under FAR Part 121 rules, as any common-carriage, passenger-carrying operation for compensation or hire conducted by an air carrier or commercial operator for which the certificate holder or its representative offers in advance the departure location, departure time and arrival location. It does not include charters operated under Part 135.

Carr acknowledged that there will not be a flood of Part 135 operators rushing to provide this type of service the day it becomes law. But it creates an opportunity for charter operators to expand their service with today’s large fleet of charter aircraft and new aircraft soon to be available, such as the Eclipse 500, Cessna Citation Mustang and Safire Jet.

Carr added that the Internet will likely play a significant role for operators offering this type of service. Said Olcott, “Further, this will provide those relying on Part 135 operations, particularly the business community, an opportunity to gain additional cost efficiencies when using this form of transportation.”