FAA Warns BlackBird, Pilots of Possible Rule Violations

 - December 20, 2019, 10:42 AM

The FAA sent a letter on December 17 warning charter broker BlackBird Air that pilots using the company’s online platform and app to fly passengers under Part 91 “are holding out and thus are engaged in common carriage.” The agency said it is planning to investigate BlackBird’s activities and possibly also pilots flying for BlackBird. In response, BlackBird has “paused” this feature of its offerings.

San Francisco-based BlackBird Air is primarily a charter broker, but also offers customers the option to hire a commercial pilot and lease an airplane to travel to a destination, all under Part 91. According to Crunchbase, BlackBird has raised $15 million in venture capital funding. BlackBird’s website homepage advertises: “Defy Gravity. Rent a plane and go anywhere. How it works: BlackBird helps you fly over traffic by connecting you with planes and pilots, bringing you true freedom of flight.”

The FAA doesn’t agree with BlackBird that this kind of operation is not a charter, and it said that the company and/or pilots must obtain a Part 119 certificate to transport people or property for hire or compensation.

According to an FAA spokesman, “We haven’t taken actions in relation to BlackBird per se, but we alerted pilots that they could be violating the regulations if they’re not operating under a certificate issued under Part 119.”

In the letter sent to BlackBird attorney Roy Goldberg, the agency’s Office of the Chief Counsel, Enforcement Division made a case that BlackBird’s pilot-hire and airplane-lease operation under Part 91 fits all the criteria that make an operation subject to requiring a Part 119 certificate and operating under Part 135 charter regulations.

For its part, BlackBird had sent a letter on June 10 to the FAA outlining its business plan, explaining that it facilitates its customers with “leasing an aircraft and…separately hiring a commercial pilot to fly the aircraft the user has leased.” Because, BlackBird wrote, it doesn’t “own, manage, or maintain the aircraft and does not employ pilots…” and the customer selects the aircraft and pilot separately, “operational control of the aircraft remains with the user at all times.” In the FAA letter, the agency wrote that “BlackBird represents that it only facilitates the agreements, processes payments, and provides customer support to all three parties (user, i.e., person leasing the aircraft and hiring the pilot; pilot; and aircraft lessee).”

According to the FAA, BlackBird, itself, outlined the agency's criteria for determining whether an operator must hold Part 119 certification. From the December 17 FAA letter: “As BlackBird noted in its [June 10] letter, to determine whether common carriage is present, the FAA assesses whether there is: (1) a holding out of a willingness to (2) transport persons or property (3) from place to place (4) for compensation.”

The FAA explained that BlackBird easily met the last three criteria, but “holding out” was subject to more discussion. The FAA letter went on: “We have little trouble concluding that the pilots listed on BlackBird’s pilot database selected by the user are transporting persons or property, from place to place, for compensation. Despite BlackBird’s assertion that the pilots are not transporting persons or property, it is clear that they are being hired for that very purpose. In addition, as BlackBird concedes, the pilots are being compensated for the flight service (whether the money comes directly from the lessee or through the BlackBird platform). That leaves only the issue of holding out.”

That BlackBird and its pilots are holding out is supported, the FAA claimed, by two legal interpretations involving aviation ride-sharing providers AirPooler and FlyteNow.

Essentially, because BlackBird’s online and app platform is available to anyone and pilots on the platform [from the FAA letter] “are available and willing to transport passengers who solicit pilot services through the platform…A pilot's participation in the BlackBird platform amounts to holding out a willingness to transport persons from place to place for compensation and requires certification under part 119 prior to conducting the operation.”

BlackBird doesn’t agree with the FAA’s interpretation. In its June 10 letter, the company had explained its operation thusly: “[u]nlike air carriers, BlackBird is not building an operation based on crews, aircraft, or routes. BlackBird is building an infrastructure that supports all of general aviation, which includes air carriers and operators." In the December 17 letter, the FAA elaborated, "BlackBird manages two databases: one for aircraft available for lease and a second one for commercial pilots (described as ‘independent person[s] with a specific skill set [pilot]).’ BlackBird uses the databases as part of a marketplace service that serves as an aggregator of information and connects third-party service providers (the pilots) with users seeking to charter an aircraft or purchase a ticket on a direct air carrier. BlackBird asserts, ‘the ultimate business goal is to create an online platform that surfaces the many options available to users; [and] NOT to provide air transportation.’”

Asked about the FAA’s warning in the December 17 letter, BlackBird founder and CEO Rudd Davis told AIN that the company is pausing its Part 91 pilot-hire, airplane-lease operations. Davis sent this statement to AIN: “We disagree with the FAA’s interpretation and look forward to continued discussions on this topic, given that their guidance isn’t law. BlackBird is the largest digital aviation marketplace in the world and the one place travelers can find and instantly book all private flight options. [Part] 91 operations are the minority of our business and for the moment we will pause that aspect of the marketplace and continue to provide charter flights and individual seats on private [Part 135] aircraft.”

The National Air Transportation Association has focused increasingly on the illegal charter issue, and NATA COO Timothy Obitts sent this statement to AIN: “We thank the Federal Aviation Administration’s Office of General Counsel, Enforcement Division for the well thought out and articulate letter to BlackBird Air regarding non-part 135 operators' use of their platform. This letter is clear guidance from the FAA and confirms NATA’s understanding of the regulations. We hope that pilots pay heed to the FAA’s guidance. NATA, along with its Illegal Charter Task Force, will continue to work with the FAA on this very important safety issue.”

The FAA letter concluded that BlackBird pilots are holding out and “engaged in common carriage. Because these operations are subject to Part 119 certification, a pilot who holds an airline transport pilot or commercial pilot certificate must obtain and hold a certificate issued under part 135 or the pilot must be employed by a company operating the flight that is certificated under part 119. Accordingly, please expect further investigative activity into BlackBird's operations, particularly regarding its pilot database. In addition, we would be interested in learning of any action you intend to take in view of the jeopardy facing pilots who participate in BlackBird’s service.”

The BlackBird website no longer promotes the original pilot-hire, airplane-lease concept and now offers potential customers the opportunity to book flights with certified Part 135 providers, to “... fly over traffic by connecting you with charter operators.”