SIC Logging Is Focus of FAA Investigation into Boutique Air

 - September 30, 2022, 8:50 AM

Boutique Air, a San Francisco-based Part 135 commuter airline and active participant in the Essential Air Service (EAS) market, is in the midst of an FAA investigation into its training and pilot development program (PDP). While there has been no official public acknowledgment of the investigation from Boutique, in late 2021 a letter from CEO Shawn Simpson addressed to the “United States FAA” was posted in numerous online venues.

In the letter, dated November 4, Simpson referenced an October notification from the FAA’s Fargo Flight Standards District Office (FSDO) informing the company “…that 100 percent of our First Officers should no longer be flying in our aircraft because their position as Second in Command [SIC], is not valid and therefore we must stop immediately using these pilots in this role.” He further stated that in a phone conversation with FSDO staff on October 27, he was informed, “that ‘none’ of the time that our First Officers have accumulated at the company will count as real flight time.”

Other than to confirm it was ongoing, the FAA has refused to comment on the investigation. According to records from the National Program Tracking and Reporting System (NPTRS), an SIC PDP was approved for inclusion in Boutique’s operations specifications in March 2022, four months after Simpson’s letter. Additional questions on the program’s establishment will have to wait until the investigation is completed.

Multiple attempts were made, via email and phone, all of them unsuccessful, to interview Boutique officials.

SIC PDP and Training Issues

Following the widespread release of Simpson’s letter on the SIC PDP program, the FAA recorded multiple contacts from Boutique co-pilots inquiring about the status of their logged flight time. While the predominant aircraft in Boutique’s fleet, the Pilatus PC-12, is authorized for single pilot operations, Boutique has largely flown it with a dual crew. According to FAR 135.99, co-pilots are permitted to log time for aircraft operating Part 135 that do not require second pilots by type certification but only if the company possesses an approved PDP in its operations specifications. Based on the ongoing investigation, it appears that Boutique did not have the requisite approvals. This conclusion is supported by Simpson’s letter in which he noted that the Fargo FSDO “…indicated that the core of the problem was our lack of a Pilot Development Program (and associated Ops Spec).” (According to the FAA, Boutique was assigned to the Fargo FSDO in August 2020; prior to that it was with the Sacramento FSDO.)

The FAA began tracking exchanges with Boutique SICs in December 2021, noting repeated requests for information about the status of the PDP, the implications of logging SIC time for Boutique, and anxiety surrounding the future. These concerns echoed broader discussions occurring in online pilot forums where members asked for guidance on how to determine if their logged time was valid and, for those no longer employed with Boutique, how to broach the topic with new employers.

In a recent email exchange with Advanced Airlines, which also flies the PC-12 with copilots, chief pilot Douglas Galbraith told AIN that its program had been in effect for nine months although “…all components of the PDP like an SIC training program, check rides, SOPs, and regular reviews, have been in effect for 9 years at Advanced Air.”

There are approximately 25 SICs in that company’s program at any time, and Galbraith described it as an important part of the training department providing “regular reviews and open communication from instructors, check pilots, and management…”

It should be noted that the FAA’s ongoing investigation into Boutique addresses not only the SIC PDP but also company training in general. This could include issues beyond the program itself, and records show that the FAA has received reports from ATC over the past couple of years of several runway incursions and deviations from assigned altitude for Boutique pilots.

Records show they have also failed repeatedly to use assigned taxiways, exit the runway as instructed, and receive clearance prior to takeoff. Entries on these reports into the NPTRS note discussions with pilots and management concerning checklists, managing distractions, and maintaining situational awareness. In one entry an airman was advised of “…carelessness and the risk taken by not conducting a thorough preflight inspection.” The inspector explained to the pilot that “due to the calamity of errors in maintenance,[and] his lack of attention to detail[,] this event occurred.” Other pilots were reportedly counseled through the Aviation Safety Action Program for their errors.

Finally, in March of this year, a hotline complaint was received asserting that pilots with barely 500 hours total time were “forced” to upgrade and fly revenue flights. Some of the flights, according to the caller, were flown single pilot. After reviewing records, the FAA determined that such flights with passengers were occurring, but under VFR and thus in adherence to 135.243, which requires only 500 hours for such conditions. Whether or not low-time pilots were pressured into conducting any flights for Boutique was not addressed by the FAA, and the issue was closed.

In his November 2021 letter, Simpson expressed acute frustration over the FAA’s decision to ground Boutique’s first officers. “The captains (along with myself),” he wrote, “are quite concerned about the sudden extra workload of flying themselves into some of the busiest airports in the world (including LAX, ATL, DEN, DFW, BOS, to name a few) without the support of a second pilot to help.”

He also demanded the agency give attention to other facets of Boutique’s operation. “What hangs in the balance is quite possibly the destruction of this company and the financial destabilization of the hundreds of people that it directly supports,” he wrote. More than anything, however, it was the “…sudden application of policy” that most frustrated Simpson. “It is without a shadow of a doubt,” he wrote, “the worst thing I have ever seen the FAA insist upon in my 10 years of running this company.”

Essential Air Service

To form a complete picture of Boutique, AIN obtained hundreds of pages of documents from the FAA via the Freedom of Information Act (FOIA) and combed through data from several federal agencies, including the Department of Transportation (DOT), Bureau of Transportation Statistics (BTS), and Department of Treasury.

The results provided a study of an airline that spent the past decade pursuing a strong position among EAS carriers but now, despite substantial funding via the Covid Payroll Support Program, faces a significant downturn in passenger numbers and recurring issues with training and maintenance.

Boutique Air was originally Shasta Flyers Aviation, a small on-demand charter operator based in northern California. Shasta was sold in 2011 to Open Trip, which was later described to the DOT as a holding company that was 95 percent owned by Simpson. Shasta then applied for a name change to Boutique Air and obtained commuter air certification in November 2012; Simpson was listed as president and CEO.

Another company wholly owned by Simpson, Targaryen LLC, leased Boutique its first PC-12. The company currently has more than 15 aircraft registered to Simpson through Boutique and Targaryen, additionally more than a half dozen others are owned by trust entities through which the ownership is concealed.

Boutique was selected for its first EAS route in April 2014, joining companies like Great Lakes Airways, Pacific Wings, SeaPort Airlines, and PenAir, all of which are no longer in business.

The EAS market is notoriously volatile with a history that includes mergers, bankruptcies, and dissolutions. Airlines typically enter and exit segments of the market strictly for economic reasons; in May of this year, Skywest announced it was seeking approval to terminate more than two dozen EAS contracts due to pilot shortages.

But as some airlines leave, others are lured in by the promise of millions of dollars in guaranteed route income, and although it has a host of detractors, the program continues to grow. Based on a June 2022 DOT report, EAS contracts for the U.S., (including Puerto Rico), totaled $368,974,326. There are 171 communities receiving the subsidized service.

Boutique proved itself a tenacious contender for contracts from the beginning, bidding repeatedly on routes throughout 2014. By 2016 it was flying 118,347 passengers and in 2018 flew 172,459. In bidding on a contract for Pendleton, Oregon, that year, Boutique emphasized its “highly experienced pilots” with the “most advanced FAA ratings.” These qualifications, the company asserted, were “a key reason for our continued perfect safety record.” By February 2019, Boutique was operating 17 EAS routes and fulfilling contracts valued at $49.9 million.

The company forecasted difficulties however in correspondence with the FAA late that year. Boutique’s then-director of operations (DO) Matt Butcher wrote that “cancellations and delays are at an all-time high and if we continue like this we will [lose] our codeshare partners and possibly some of our routes.” The pressure on the company was obvious at that point as it failed to be re-selected for a succession of EAS airports including Thief Falls, Minnesota; Johnstown, Pennsylvania; Greenville, Mississippi; Merced, California; Muscle Shoals, Alabama; and McCook, Nebraska.

Events, Incidents, Accidents

Cancellations and delays were widespread in the company’s route structure, and between 2018 and 2022 Boutique experienced more than 150 gate returns, air returns, diversions, aborted takeoffs, FAA-designated incidents, and events. In the same period, there were 30 in-flight emergency declarations for reasons ranging from faulty landing gear indications to electrical failures to loss of engine power.

These records, which were obtained via FOIA but are incomplete with several month-long gaps, contained a litany of issues ranging from flat tires, inoperative radios, continuous stick shaker warnings to failed cowling hinges, and numerous central advisory and warning system (CAWS) alerts.

In August 2019, the FAA received a hotline complaint from a pilot about tire wear limits on Boutique aircraft. This came in the midst of tire-related issues on various aircraft including a blown tire on landing the previous June, flat tires on two separate aircraft in October, and a main tire failure in January 2020, which caused the aircraft to “depart the runway” and sustain damage to the propeller. In responding to the complaint, the FAA inspector noted the pilot was advised to review the advisory circular on aircraft tire maintenance and operational practices and to submit a hotline complaint. The company’s FAA principal operations inspector was subsequently contacted and the reference was deemed “closed.”

Landing gear issues are prevalent in FAA reports for many Boutique aircraft and include air returns due to faulty gear indications, hydraulic gear system malfunctions, frozen brakes, and, in January 2021 the left main wheel fell off a PC-12 on final approach into Chicago O’Hare. (It landed in a nearby neighborhood.) No one was injured in that event. In a subsequent service difficulty report, the company listed a missing nut as the part responsible. 

Engines have been at the center of many air returns and diversions, especially those resulting in emergency declarations. Among the more than three dozen documented engine problems since 2017, there are specific issues noted, some multiple times, such as loss of engine torque, low power, lack of power, torque spike, engine surge, grinding noise, unusual noises from the engine, and possible metal in the oil.

An engine issue was also at the center of Boutique’s 2020 crash in Texas, although flight training may have contributed to the seriousness of that accident.

On April 23, 2020, the pilot and sole occupant of a PC-12 was seriously injured while repositioning under Part 91. The flight departed Dallas-Fort Worth (DFW) en route to Muscle Shoals after the aircraft’s maintenance release for issues with the power control lever. According to the NTSB report, soon after takeoff, the pilot declared “Mayday” due to losing engine power and requested diversion to Rockwall Municipal Airport.

Minutes later, he reported the engine loss was stable and requested a return to DFW. Minutes after that, he again announced a loss of engine power and another diversion to Rockwall. ATC advised him at that point Mesquite Airport was closer. The pilot approached Mesquite at 4,500 feet and initiated a 360-degree turn for left base. During the turn, the engine lost all power and the pilot crashed in a field where the wings separated and a fire ensued. A witness pulled the pilot from the wreckage.

The NTSB listed the accident’s probable cause as a “…mis-rigged beta control cable (propeller reversing cable), which resulted in a loss of thrust in flight.” However, internal FAA communications revealed that investigators were concerned not only with the mechanical cause but also with how the pilot handled the emergency.

In response to FAA queries on the pilot’s training, Boutique’s then-DO Butcher informed investigators that the pilot failed the flight portion of a potential upgrade to the King Air 300 in November 2019, prompting a decision “to demote him back to the PC-12…” He subsequently failed his 135.293, 297, and 299 re-qualification training in the aircraft before finally passing three months before the crash.

EAS Terminations

The most harrowing event to date for Boutique passengers likely occurred in May 2021, right before takeoff from Minneapolis to Ironwood, Michigan, when an emergency door came off. Following that event, concerns were raised by the local airport authority, prompting Simpson to attend an airport board meeting. Soon after, the company announced it was filing to terminate its EAS contract for Ironwood, and both pilots on the aircraft were fired for, according to the company, failing to complete a pre-flight checklist. That same year Boutique also terminated a contract in Jackson, Tennessee, and in 2022 it requested to pull out of Altoona, Pennsylvania; Show Low, Arizona; and Pendleton.

While Boutique has maintained several routes, including Carlsbad, New Mexico, for which it was reselected for a four-year contract, and Pendleton, where it was the sole bidder and awarded a four-year contract in July (despite requesting to terminate only months earlier), the company’s route map is substantially smaller than in the past. According to a June 2022 report from DOT, Boutique is presently flying only five EAS routes, valued at $17.3 million.

From its peak year in 2019 when Boutique flew 178,940 annual scheduled passengers, or an average of 14,911 per month, the company dropped to 105,189 passengers in 2021 (8,765 monthly average), and through May of this year, only 21,449, or 4,289 per month.

While Covid would appear to be the obvious cause of this drop-off, it is not evident in figures for other EAS operators. For example, Advanced Air flew only 30,350 passengers in 2019 and dropped to 21,797 in 2020. But that figure increased to 33,315 in 2021 and the company has already flown 26,702 through May of this year.

Unsurprisingly, Boutique cited cost increases related to Covid when submitting its 2022 termination notices. Department of Treasury databases state, however, that the company received a total of $18,985,020 in Payroll Support Program funds from May 2020 through April 2021. This amount was greater than several of its EAS competitors, including Southern Airways Express ($18,022,514), Contour Air ($15,875,253), Denver Air Connections ($10,884,984), and Advanced Air ($6,024,671). It should be noted that according to the BTS database, Southern Airways flew 324,634 scheduled passengers in 2021, or more than three times Boutique’s total for that year while receiving almost $1 million less in Covid-related support.