The federal government has been hemming and hawing for a long time, and now it appears poised to take action. Specifically, I’m talking about the Part 135/380 loophole that has allowed companies like JSX, Aero, and Contour to flourish. This may sound like bad news for those airlines, and for some it will be. But this isn’t as straightforward as it may seem.
Before we even start, a brief tangent. I have to defend my use of the word “loophole.” This is clearly a loophole, but that doesn’t mean it’s not absolutely, completely legal. See, up until the mid-1990s, any flight with 30 seats or less could operate under the less restrictive Part 135 regulations instead of Part 121 rules the big guys must follow. In the 1990s, they lowered that number to 9 seats for scheduled flights, but it did not get changed for public charters.
What has happened is companies like JSX have found very clever ways to take advantage of this. JSX is just a marketing company that actually charters planes from Delux Public Charter, LLC. Both of these companies are under the same ownership. It’s just a game that has to be played for it to be considered a charter. JSX can then sell seats on that charter to the public. Except for those who pay attention to the fine print, it looks exactly the same.
Why bother going through this silliness? Each airline has a different reason. For JSX, it’s primarily about having the ability to operate out of private terminal areas, not in the passenger terminal at any given airport. It can also serve airports that don’t have passenger terminals, like Scottsdale (AZ) or Boulder (CO).
For Contour, it’s more about being able to hire pilots under less strict rules. The minimum number of hours to fly as a first officer drops in Part 135, and the Part 121 mandatory retirement at age 65 doesn’t exist.
This is what led SkyWest to try to start SkyWest Charter so it could get more pilots and operate to small cities. So far, the feds have failed to act on that application, and it’s pretty ridiculous that it has been held up so long.
The most threatened big airlines have put up a fight against this, most notably American and Southwest. And it appears they’ve gotten traction. I don’t think the safety arguments are good or fair here, but there is something to be said for consistent regulation.
The reality of the situation is that it is rather stupid to say that it’s perfectly safe for a passenger to fly on a 30 seat airplane under one set of rules if it’s a public charter and another if it’s a regular scheduled airline. To the passenger, it seems no different at all. This loophole is confusing and should be closed.
Now, if I had my way, I’d rather see it closed by actually returning to the 30 passenger limit on charter and scheduled service, because that market is virtually dead except for these loophole airlines. But it would seem that the feds are going with a more complex approach.
The FAA says it is looking into this in a two-part way. First, it wants to close the loophole. Then, it wants to possibly open it back up.
On closing the loophole, the FAA says it is going to initiate a rulemaking. On this “…the effect of this proposed rule change would be that public charters will be subject to operating rules based on the same safety parameters as other non-public charter operations.”
So this goes in the other direction and would force everything down to 9 seats. I’m not a fan. But it wants to offset this with the second part.
Additionally, because of our dedication to expanding air service to small and rural communities, we will explore opportunities to align aircraft size and certification standards with operational needs for small community and rural air service. Specifically, the FAA will convene a Safety Risk Management Panel (SRMP) to assess the feasibility of a new operating authority for scheduled part 135 operations in 10-30 seat aircraft.
Talk about tying yourself in knots. It’s not safe to have this loophole for public charters, but then again, maybe it’s safe enough if there’s no other option? What a weird way to approach this, but that’s politics for you. After all, those small cities have votes, and just shutting off the loophole could be very problematic. For example, here’s a map I put together showing the SkyWest markets that had been abandoned during the pandemic due to the pilot shortage.
ap generated by the Great Circle Mapper – copyright © Karl L. Swartz.
See all those routes picked up by Contour? It’s because that airline uses the Part 380/135 loophole and can get pilots because of it. Southern Airways Express only flies 9 seaters, so it has the same ability to hire pilots. Is it better to serve those cities or not? On the other hand, there’s Denver Air Connection which operates Part 121, and it has its own Part 135 operation to feed its pilot pipeline. There are a lot of ways to tackle this, but none solves every problem. That’s what the feds have to balance.
You would think this would be very bad news for JSX, but it is trying to keep a stiff upper lip, ignoring the first part and focusing on the second. The airline gave me this lengthy statement:
JSX supports the Federal Aviation Administration’s efforts to maintain the safety of civil aviation and applauds FAA Administrator Whitaker’s plans to evaluate a new operating authority for certain Part 135 operations. More than half of JSX’s public charter markets operate in airports that are not served by large network airlines, yet there are thousands more airports – funded by the American taxpayer – that remain inaccessible to the vast majority of Americans unless they have the means to afford private jets. As the country’s largest public charter air carrier, JSX has modeled the way forward for safe, secure, and reliable regional operations under Part 135 since inception and, with intent to take delivery of up to 332 hybrid-electric airplanes from 2028, aligns with the Biden Administration’s call to encourage competition and innovation in air travel. We eagerly look forward to collaborating with our regulators to cement the importance of public charters and expand access to vital air connectivity in the future.
So, there’s that. Now this is a bit of a trick, because yes, it does operate to a lot of airports not served by other airlines, but they happen to be very close to big city airports. For example, Concord is 30 miles from Oakland, Boulder is 30 miles west of Denver, Scottsdale is 20 miles north of Phoenix, Destin is 25 miles south of Fort Walton Beach, and Opa Locka is a mere 8 miles north of Miami.
Would the FAA look at that as providing valuable regional service? It’s a far cry from places like Fort Leonard Wood or Joplin, Dodge City, or any number of other places that are nowhere near a big airport. Clearly JSX will be trying hard to argue in favor of a broader definition.
At this point, nothing has been decided, and it’ll take some time to go through the regular government process. But the general path appears to be set. The question is now surrounding how much leeway the feds will provide in the end.
