I’m fairly certain the first rule of gripping headline-writing is to not cite sections of the federal code. But, well, here we are. There’s been a lot of discussion lately over the legality of what airlines like JSX have been doing and what SkyWest Charter wants to do. I imagine many of you are wondering what this all means, as was I until I did some research. Let’s break it down.
There is a distinction in the federal code between scheduled and charter operations on the one hand and air service operated by air carriers and commuter carriers on the other. A flight is either scheduled or charter AND it’s either operated by an air carrier or a commuter carrier. The thing is, the rules for charters on commuter carriers are different than scheduled flights on commuter carriers. That creates a loophole which airlines like JSX and SkyWest Charter are exploiting.
Just about all scheduled air carrier service in the US is operating under Title 14 of the Code of Federal Regulations, Chapter I, Subchapter G, Part 121. It’s usually just called Part 121 for short, because, well, nobody is going to say that whole thing.
Part 121 governs just about everything around how an airline operates, and it sets a high bar for compliance. It used to apply to aircraft flying in scheduled operations with more than 30 seats, but for the last 25+ years it has applied to any scheduled flying with more than 9 seats. (This, for the record, is one of the big reasons that 19-seater commuters basically don’t exist anymore.)
Those airplanes with 9 seats or less in scheduled service can operate under the commuter carrier rules, Part 135. These rules are far less onerous than Part 121.
These same Part 135 rules apply to on-demand charters, but the seat limit never changed on charters. That means charters on aircraft with up to 30 seats can still fly under Part 135 rules, and that is where JSX and SkyWest Charter saw opportunity.
The problem for JSX or anyone else is that when a carrier is operating an on-demand charter, it can’t specify the times or cities. It also can’t sell single seats on that charter directly. It just has to take that request from the company that is chartering the airplane and let them do the work. This was supposed to cut a clear line between scheduled and charter operations, but that line has been blurred thanks to this new way of using Part 380 rules.
Part 380 sets the rules for those who arrange so-called public charters. A public charter operator can arrange for an on-demand charter from an airline and then sell individual seats on that charter to the public. There are other rules around how public charters operate in terms of how the money exchanges hands and all that, but this two-step arrangement is how JSX figured out it could circumvent the rules on scheduled service. Here’s a visual of how the two processes differ:
There are plenty of examples of companies that have done public charters using regular Part 121 airlines. I remember my family buying tickets to Hawai’i via SunTrips which used an ex-United DC-10 operated by Leisure Air. (Yeah, this was awhile ago.) Apple Vacations has flights on Frontier. (And before that, anyone remember USA 3000?) Sun Country and Allegiant regularly operate casino charters. This is how the system was supposed to work, but then, companies realized that combining Part 380 with Part 135 created a huge opportunity.
Using Part 380, one company can create a flight schedule. It then just has to contract with an operating airline to fly that schedule on the first company’s terms. Then that first company can sell seats directly to the public since it is a public charter. And if the airplane has 30 seats or less, that different airline can operate under those tantalizing Part 135 rules.
JSX originally did this to skirt traditional security and terminal rules, so it could fly from fixed based operators and make it feel like a private jet experience for customers. It worked, but it does result in a blizzard of fine print.
When you go to the JSX website, you’ll see this in mice-type at the bottom of the page:
Flights are operated with E135 or E145 aircraft by Delux Public Charter, LLC (dba JSX Air or Taos Air), which holds an FAA Air Carrier Certificate (4DPA097O) and DOT commuter air carrier authorization. Flights are public charters sold by JetSuiteX, Inc. as the charter operator and Delux Public Charter, LLC as the direct air carrier, subject to DOT Public Charter Regulations at 14 C.F.R. Part 380. PC# 21-125 and PC# 22-146.
So, the flights are sold by JetSuiteX, Inc. which technically arranges the charter to be operated by Delux Public Charter, LLC. But in this case, it’s all the same overarching company pulling the strings which was most certainly not how this was envisioned to work. But work it does.
Taking advantage of this loophole, JSX can sell 30 seats on an airplane operated under Part 135 instead of just 9 under regular scheduled service. Having only 9 passengers would not be an economically feasible model.
While JSX was a big fan of this model for being able to create a private jet-like experience, it also has another big benefit.
Fast forward to post-pandemic times and small airlines are very short on pilots. There are a number of differences between Part 121 and Part 135, but the big one that matters today is the fact that under Part 121, pilots need to have 1,500 hours to get in the cockpit (for the most part). Under Part 135 rules, they only need 250 hours to get in the right seat. This makes it a whole lot easier to find pilots for smaller carriers, so the model has attracted the attention of other operators.
SkyWest is the most prominent right now, and some are not pleased. The regional had been flying 50-seaters to a whole bunch of small cities under the Essential Air Service (EAS) program using government-subsidized money. It had to walk away from many of them, because it just didn’t have the pilots. So, it invented SkyWest Charter to step in and pick up the slack.
SkyWest’s plan is to refit its 50-seaters with only 30 seats and move them to a subsidiary called SkyWest Charter, LLC. That will be the commuter on-demand charter operator. Then SkyWest itself (or whoever else, United maybe?) will charter the aircraft from Skywest Charter, LLC and then sell individual seats on those flights.
With this, SkyWest thinks it can get back into the EAS game in a big way. It will be able to operate those old 50-seat CRJs with 30 seats under Part 135 rules, so it will be able to find enough pilots. And it couldn’t have filled 50 seats most of the time anyway.
There’s little question that this is technically legal, but the question is whether it should be. You can browse through the docket and see who doesn’t like this plan. Basically, it’s anyone who would rather not have to compete with this SkyWest service on an uneven playing field. But it goes beyond SkyWest. Several airlines don’t like competing with JSX either. This is about whether the model gives an unfair advantage and whether the rules should change.
Now that you’re caught up on what’s happening, we will wait and see how it plays out. I would imagine SkyWest Charter may get the go-ahead, but there could be political winds that might shift and close this loophole at some point in the future.
