Last night, the FAA revoked the charter certificate of AMI Jet Charter in a letter hand-delivered to AMI president Don Hitch. The letter outlines the FAA’s determination “that an emergency exists related to safety in air commerce and that immediate action to revoke AMI Jet Charter, Inc.’s Air Carrier Certificate is required.” This move follows the FAA’s October 4 suspension of AMI’s charter certificate. AMI can submit an appeal of the revocation. If the revocation withstands any appeal process, it is permanent, and AMI would have to reapply for a new charter certificate.
The key issue that led to the revocation of AMI’s charter certificate is control of the company by a foreign entity. Switzerland-based TAG Holdings owns management firm TAG Aviation USA, which itself owns 49 percent of AMI Jet Charter. In a September 2005 consent order, the U.S. Department of Transportation ordered AMI to “cease and desist” from violations of regulations regarding “interstate and foreign air transportation while it was under the actual control of foreign interests.” According to the FAA’s Emergency Order of Revocation, “AMI and TAG knowingly, intentionally, and willfully engaged in a scheme and/or deceptive practice to make it appear to federal regulatory entities, including the FAA, as if AMI remained in control, including operational control, when in fact TAG exercised control of passenger-carrying flights ostensibly operated under the authority of AMI’s air carrier certificate.”
The FAA began a detailed investigation into AMI in March, citing operational control issues as the main area of focus. In a letter sent to TAG on September 17, the FAA wrote: “Our investigation has centered on whether AMIJC has surrendered operational control by causing, permitting, or allowing uncertificated entities, including TAG Aviation USA (a foreign entity ineligible to operate air carrier flights) and various ‘charter ally’ companies, to exercise such control.”
To support the FAA claims that TAG was exercising operational control over AMI flights, the revocation letter cites instances where the management lines between TAG Aviation USA and AMI were blurred, including TAG managers having signature authority on AMI operating and payroll accounts and being responsible for AMI Part 135 expenditures; TAG holding the fleet insurance policy for AMI aircraft and TAG being the first named insured under that policy; the insurance policy requiring that TAG or its designee approve all pilots in AMI’s Part 135 flights; TAG paying salaries for most AMI employees and providing benefits for all AMI employees; and AMI carrying only 22 to 37 employees on its payroll versus more than 700 on TAG’s payroll.
Since AMI was founded in 1998, according to the FAA, “AMI failed to maintain operational control of its aircraft on thousands of passenger-carrying flights for compensation or hire.” Instead, “TAG and/or the aircraft owners exercised operational control over flights for compensation or hire that purportedly were conducted under the authority of AMI’s air carrier certificate.”
The FAA concluded that revocation is necessary because AMI “does not have operational control of the flights purportedly operated under the authority of its certificate, a situation that poses an unacceptable risk to safety in air commerce. Under these circumstances, the immediate protection of the public is paramount.”