European bizav taking hard line on illegal flights

 - December 23, 2010, 8:48 AM

The European Business Aviation Association (EBAA) is leading fresh industry demands for a clampdown on illegal charter activity. The campaign wants to make charter customers more aware of the risks they run by flying in aircraft not operated under commercial aircraft operating certificates (AOCs). It also wants authorities to be more aggressive in catching those operating illegally.

According to Marwan Khalek, chief executive of UK-based charter group Gama Aviation, as many as half of all for-hire flights could be operating illegally. In addition to paid-for flights in private-licensed aircraft, his estimate includes aircraft operated by AOC holders who do not have permission under cabotage rules to fly in another territory–most notably, U.S. N-registered jets making flights within Europe.

David Macdonald, director of the Private Jets division with charter broker Air Partner, told a press briefing in late November that "pseudo-aviation companies" are being more and more brazen in marketing illegal flights on Web sites and through e-mail shots. His own brokers have started receiving offers of privately licensed aircraft for hire and it isn't always immediately apparent that these are not covered by a commercial AOC.

One increasingly common tactic for bending the rules is to offer privately licensed aircraft under short-term leases. In some cases, aircraft have been offered under a one-year lease but for no more than the equivalent cost of a single flight. This approach has been taken by companies seeking to operate commercially aircraft registered offshore in locations such as the Isle of Man, which accepts only privately operated aircraft.

EBAA and operators such as Gama have long complained about U.S.-registered aircraft flagrantly breaching the requirement to get permission to fly paying customers within Europe. In some cases, U.S. operators appear to be ignorant of the requirement, but in other cases operators have indicated that they see no point in seeking permission because the rule is enforced so laxly. By contrast, non-U.S. operators seeking to fly within the U.S. face tough restrictions.

In general, business aircraft operators based outside the European Union are not permitted to make commercial flights within the EU unless they have permission from the EU states concerned. National officials are supposed to ask local operators whether they object before issuing a permit.

In 2009, the UK's Department of Transport conducted 250 ramp checks at British airports to determine whether specific flights are private or commercial. This was two-and-a-half times as many as the 100 checks made in 2008, but no information is available as to whether prosecution rates increased by the same proportion.

European officials have privately conceded to charter operators lodging complaints that they have inadequate staffing to police the private charter sector. As things stand, illegal charter operators need to be caught red-handed.

In Europe, it is relatively easy for brokers and legitimate operators to identify illegal flights by scrutinizing Eurocontrol's central flow management unit to see that a charter they quoted for but did not win has subsequently been undertaken by a non-commercial operator, or one from outside Europe. According to Air Partner, Russia is now rife with illegal charter flying, but the Middle East, which until recently was another hot-bed of so-called gray market activity, has cleaned up its act.

Marwan Khalek and other charter operators backing the call for tougher enforcement are not suggesting that private operations are unsafe. But they do point out that they are not restricted by the limits on crew duty hours and landing/takeoff requirements to which commercial AOC holders have to adhere.

Khalek concluded that if the authorities lack the will and the resources to catch and prosecute private operators making illegal charter flights then it would be fairer to abolish rules governing commercial AOCs and at least have a level competitive playing field.

What Makes a Charter Illegal, and Why Does It Matter?

For a charter flight to be legal, it must be operated by a company that holds a valid commercial aircraft operating certificate and is permitted to fly in the territory concerned according to the aircraft's place of registry. If a customer is­­ ­paying for a flight, however indirectly, he or she is part of a commercial transaction and should be flying only on an aircraft registered to a commercial AOC holder.

According to Aoife O'Sullivan, partner with London-based aviation law firm Gates & Partners, many operators and their charter clients are ignorant of the­­­ ­­serious legal risks they expose themselves to when they don't fly under an AOC. For example, insurance cover (including life insurance) can be ­automatically ­cancelled. Illegal flights might also invalidate the terms of a finance contract, ­allowing a bank to repossess the aircraft or demand repayment of funds loaned to buy it.

O'Sullivan also cautioned against the use of short-term dry leases to get around charter rules. "People are trying to transfer liability to someone else in this way but in reality you cannot do this," she said.

The consequences of being party to an illegal charter may not be restricted to civil law. In countries with laws governing "corporate manslaughter," aircraft owners and those who operate them could be liable to lengthy jail terms in the event of a fatal accident.