Revitalizing General Aviation By Overhauling Federal Aviation Regulations Part 2 – Air Charter

by Jim Hanson

In the October/November 2012 issue of Midwest Flyer Magazine, I began a discussion of how most people first experience general aviation, and noted that they either get a ride with a friend, or take a charter flight. In both of these cases, well-meaning “regulators” have helped kill off the industry they are charged with “regulating.”

Despite the fact that air rides rarely end up in disaster (after all, they are usually conducted within sight of the airport!), the FAA saw a possibility of danger, and predictably, over-reacted. Essentially, pilots would have to meet the same standards as charter flights or commercial air tour companies, like those that fly over the Grand Canyon. That meant listed and vetted pilots, charter-like rules on aircraft, and drug testing for pilots, just to donate their aircraft and time to fly around the airport on a nice day. Predictably, air rides — the very way most people were introduced to aviation — became virtually extinct. There is a happy ending to the story, though. After several years, the FAA finally recognized the damage done, and actually changed the law. Introducing people to general aviation through “air charter flights,” is another story.

There is hardly a week that goes by that someone doesn’t call our airport for a charter flight. Many of them don’t make sense (“I’d like to charter an airplane to go to a town 40 miles away”), or they think that because an airplane can be small, that fares will be less than for commercial airlines. (Years ago, we quoted an elderly lady $1965 for an aeromedical flight to Chicago. On arrival, she handed the pilot a $20 bill and told him to “keep the change…that it was a real nice flight.” She thought the cost was under $20, and when he told her that it was nearly $2000, she said “I just wanted to ride in the airplane – not buy it!”)

The good news is that people are actually considering the charter option for convenience, saving time, and privacy. For many people, this is their initial involvement with general aviation. They don’t want to fly the airplane…they just want to use the airplane. If they have a positive experience, many will become frequent customers, and many will go on to buy their own airplanes. This is a valuable introduction to business aviation, and a source of new aircraft owners.

Years ago, the local FBO was often a “mom and pop” operation. They fueled airplanes, fixed airplanes, gave some flight instruction, and took someone on the occasional charter flight. Most aircraft and pilots weren’t certified for IFR, so business people couldn’t depend on a light airplane to keep a schedule. Single-engine IFR was a rarity, and even most light twins had no weather capability.

In the late 1960s and early ‘70s, aviation hardware opened up new possibilities. Digital avionics came of age, aircraft were being fitted with de-ice equipment and radar, and capable autopilots became available. Aircraft manufacturers responded by designing very capable aircraft to accommodate these (almost) all-weather improvements: cabin-class airplanes, pressurized airplanes, turboprops, and jets.  Pilots responded by getting instrument ratings, and government initiated new instrument approaches to hundreds of airports. Business aircraft were purchased by many individuals and corporations. It was the “high water mark” for manufacturers of light aircraft as far as models available and number of aircraft delivered.

Many of the purchasers of these aircraft made them available for charter flight to offset the fixed costs of the aircraft. Spreading the cost of the aircraft, hangar, insurance, and even the pilot over more hours made the cost to own the aircraft more affordable, or to justify a more capable aircraft than an owner could justify exclusively for their own use. Non-owners in the community could reap the benefits of general aviation as well…they had access to many very capable aircraft. Some of these customers went on to buy their own aircraft, often turning to “aircraft management companies” that not only managed and crewed the aircraft, but actively campaigned the aircraft to charter customers. It was a good time for general aviation charter flights.

Predictably, it was too good to last. The government “regulators” viewed this unregulated activity as potentially dangerous, and to be sure, there were some operators that pushed the limits of the capabilities of aircraft and pilots. Rather than focus on the problem, government painted with a broad brush, and cracked down on all charter operators.

At the same time, commuter airlines were using light aircraft (under 12,500 pound gross weight), and these could be regulated under the same FAR Part 135 rules that were applicable to charter aircraft. A series of commuter airline accidents caused sensationalism in the news media as they trumpeted, “Why are there two levels of safety — one for big airplanes and another for small airplanes?” The result: the FAA got out that broad paintbrush yet again, and essentially mandated that commuter airlines and the air taxi operators adhere to substantially the same regulations as the large scheduled airlines. The commuter operators, unable to sustain the cost of regulation through the small number of seats available on 19-seat aircraft, purchased larger aircraft and largely abandoned the service to small communities. Thank you, FAA…you’ve protected us to death! As was often said about their Civil Aviation Authority (CAA) counterparts in Great Britain, “They are looking for perfect air safety and they consider themselves failures every time an aircraft is allowed to take off!”

Charter operators, most of whom used business aircraft, couldn’t stand the cost of over-regulation, either. At one time, my own operation had three King Air turboprops, a Piper Navajo, two Piper Chieftans, two Beech Baron Model 58s, and a Piper Lance on charter. These aircraft were owned by businesses…we crewed the aircraft for the owners and also made them available for charter. We employed 44 people as pilots, dispatchers, mechanics, and linemen.

My own “Road to Damascus Conversion” came during an FAA King Air six-month checkride shortly after the new rules were initiated. The FAA inspector, during the oral exam, asked “What if you took your King Air to New Orleans, and blew a tire on landing?” I replied “It depends on whether we were flying the aircraft for the owner, or on charter. If it is for the owner, it is Part 91. I would find a mechanic and have him fix it. If it was being used for charter, that’s Part 135, I would call my Director of Maintenance.” The rest of the conversation went like a “Burns and Allen” comedy routine (for the benefit of those who don’t recall George Burns and Gracie Allen, poor old George would have to try to make sense of Gracie’s warped sense of reality). It went something like this (see cartoon on page 42):

Inspector: “So you’ll call your Director of Maintenance. Who would that be?”

Hanson: “Why, that would be ME.”

Inspector: “And THEN what would you do?”

Hanson: “I would tell the pilot (me) to find a mechanic to change it. I would have the mechanic converse with the director of maintenance (me) to ascertain that he had the tools and procedures to perform the work.”

Inspector: “And THEN what would you do?”

Hanson: “As director of maintenance (me), I’d give the pilot (me) authority to inspect the aircraft to see if it was airworthy.”

Inspector: “RIGHT!  And THEN what would you do?”

Hanson: “I would call my dispatcher, and get re-dispatched.”

Inspector: “And WHO is your dispatcher?”

Hanson: “That would be me. I would give myself permission to return home.”

Inspector: “And what would you do when you returned home?”

Hanson: “I would contact the director of maintenance (me) and have myself look over the tire and the paperwork. I would note the repair away from home, and sign off my approval. Then, I would congratulate the dispatcher (me) and the pilot (me, again) for the fine way they handled the situation, in full compliance with good government procedures!”

Inspector: “Hey, are you making fun of me?”

Hanson: “No…just these foolish, one-size-fits all (nobody) rules.”

It wasn’t long after that I decided that there was no money in the air taxi business…we would simply crew the aircraft for the owners, and operate under the much simpler Part 91. It didn’t take long for the rest of the charter industry to come to the same realization. We cut the number of employees in half, and made more money. People that used to hire the airplanes, had to go elsewhere. There is a lesson here for the U.S. economy today: get rid of ridiculous and hamstringing regulations, and the economy will respond favorably.

The Result of This Over-Regulation

There are far fewer charter operators today to serve the needs of non-aircraft owners.

Those operators that do exist tend to be big operators like Netjets — able to utilize the economy of scale to take care of burdensome regulation.

Because big operators tend to utilize only jets and turboprops, there are very few operators that offer entry-level aircraft any more for charter customers. A check on the FAA website of Minnesota passenger air taxi operators revealed only nine (9) piston twins available for charter, and 10 singles. In Wisconsin, the numbers are somewhat better…only 34 piston twins, and 10 singles.

The price of charter — driven by over-regulation — is often high enough that customers will simply ride the airlines or drive to their destination.

Instead of being available at most general aviation airports, charter flights must now stage at rural airports, further increasing costs and making them uncompetitive.

General aviation gets a black eye as being too high-priced or non-competitive with other forms of transportation due to regulatory costs.

Businesses no longer buy an airplane and put it out on charter due to over-regulation, cutting the number of businesses that own or lease aircraft.

Manufacturers no longer produce light and medium piston-powered twins to fill the market because those businesses aren’t buying.

The aviation charter industry is in the doldrums.

Pilot employment in the charter industry — traditionally a “bridge” for pilots between flight instructing and airline jobs — is down, with a concurrent loss in pilot-in-command experience.

It is indeed a sad commentary on the shape of the regulatory side of this industry that we have all of these business airplanes out there — most of them paid for — and we hardly have a charter industry anymore because there is no money to be made due to regulatory costs.

Then there are the “unintended consequences.” Rather than improve the safety record in the charter industry, this over-regulation makes it worse.

Because of the cost of charter regulation compliance, there is an entire illegal industry out there doing “bootleg” illegal charters, making it even harder for legal operators.

Because of the cost of complying with these regulations, charter operators sometimes cut corners in pilot training and maintenance in order to remain profitable.

Because of the onerous regulatory environment, turnover at charter operators tends to be high as charter pilots move on to corporate work (do you ever see a corporate pilot that expresses a desire to become a charter pilot?), taking the most experienced crews out of the business.

HERE’S THE DISCONNECT:  The most regulated operator of business airplanes — the charter operator — has a much poorer safety record than the least regulated section of the industry — business aircraft operators — using virtually the same aircraft. Professionally flown turbine business aircraft have a record equal to or better than the scheduled airlines, despite going into varied airstrips and random routings. So much for the value of government regulation!

What To Do About Restoring The Air Charter Industry

We got ourselves into this mess through the regulatory pen…the cure for it also lies with the regulatory pen.

A long-overdue, complete overhaul of charter regulations is needed. Make them closer to Part 91 operations (or, as a compromise, fractional regulations). After all, the aircraft are closer to corporate aircraft than airline aircraft, as are most trips. Eliminate the airline-like procedures.

Instead of “IFR and VFR” charter regulations, recognize the differing capabilities of different classes of aircraft. There are very few VFR charter operations conducted in the U.S. any more. Consider eliminating it and mandating IFR operations for charter, or an approved flight following system. Set a minimum standard for charter aircraft, perhaps more than 200 horsepower as the initial benchmark. There are very few Skyhawks or Warriors used for charter anyway, and absent the need to “protect the non-flying public,” restricting the use of simple airplanes to certificated pilots who should know the risk (the legal doctrine of “apparent risk”) will result in:

(a) The lowering of insurance premiums for manufacturers of aircraft that can only be used for personal enjoyment and flight instruction, and cannot be used for charter.

(b) Lowering acquisition costs of those aircraft for non-charter private operators. Think about it…if product liability insurance for the protection of the non-flying public is the driving cost of high new aircraft prices (that’s what the manufacturers tell us, and it must be true because product design and tooling costs on these aircraft were amortized years ago), then the cost of a new simple airplane should be little more than the cost of an LSA. How cheap could Cessna produce Skyhawks if they didn’t have to worry about large product liability claims from the non-flying public? How many more would they sell at this lower price?

A Cirrus or Skylane is capable of doing good light charter…the FARs should reflect that, and we should deregulate the anti-single-engine bias in the FARs where possible. Give credit for lower IFR minimums for equipment, much like we already see in approach minimums. Basic single-engine operations might require one set of minimums. Icing-certificated and weather-equipped singles might be another, and light twins might be another class, able to fly worse weather. Pressurized piston twins or single-engine turboprops might be yet another class, eligible for even lower weather minimums. It will cause operators to “upgrade” and install the equipment to get better utilization. This would also take the pressure off the pilot to complete the flight in marginal weather with a marginal aircraft The pilot could tell the passengers, “If you HAVE to be there, you’ll have to spend the money for an aircraft with more capability.” Another thought, it has been said, “that adding a second pilot to the aircraft increases safety more than adding another engine.” Consider approving lower minimums for a second qualified crewmember.

Each of these classes should have appropriate authorization and restrictions on their use, not a “one size fits all” certification. I believe it will result in a much-improved safety record for charter, and as an incentive for people to move up to more capable airplanes, similar as adding new equipment and avionics increases aircraft utilization and safety.

Make it easier (not harder) for businesses to acquire aircraft and place them on a charter certificate. It will open the floodgates to aircraft ownership.

The FAA should encourage professionally flown and managed single, twin, and turboprop aircraft management companies. Already available in some large markets, this service should be encouraged in smaller markets. It not only provides more charter aircraft (encouraging new prospects to try out the service), but provides an improved level of safety. If it works for jets (jet cards, fractional ownership), why wouldn’t it work for singles and light twins?

We need a concurrent change in commercial pilot training regulations. It does little good to teach commercial pilots how to do chandelles, lazy 8s, and 1080 overhead spirals* (I have a 1939 CAA government flight training handbook with the same maneuvers in it!). We have far better things for our commercial pilots to learn. Have them learn operations of technically advanced aircraft, turbine ops, weather avoidance, icing conditions, crew coordination, long-distance operations, and self-dispatch procedures for charter, corporate, and airline operations. These are the things that they will be dealing with for the rest of their working lives. Ask corporate operators, charter operators, and the airlines what they would like to see in their commercial pilots, not what is dictated by the FAA.

The FAA — perhaps spurred by Congressional desire to roll back regulations and cut spending — seems more receptive than at any other time I can remember in my 49 years of flying. Let’s get back to real-world regulations…keep what has proven to work, and throw out what doesn’t. Make big changes…not incremental changes. Keep the pressure on your aviation organizations (EAA and AOPA are coordinating and joining forces on many regulatory issues), FAA, and Congress to make needed changes. One thing is certain, if we don’t put proposals on the table, there will be no change.

* The commercial maneuver is a “1080-degree overhead spiral” — three 360-degree consecutive turns. The maneuver started in the 1920s and 30s as a way to get below a cloud deck. A pilot might have to spiral down through a hole in the clouds to get beneath them. By keeping a constant radius around a fixed point by changing the angle of bank (the steepest bank would be with the wind on the tail), the pilot could discern the direction of the wind for the potential forced landing at cloud base. That might have been useful for a commercial pilot 80 years ago, but it is hardly relevant to someone flying for hire today, and there are much better ways to occupy the training time for a commercial pilot in an era of fast equipment, glass cockpits, and congested airspace. The fact that the maneuver is still on the books after all these years is — like the one-size-fits-all conversation with the FAA inspector — indicative of how out-of-touch with reality the FAA has become. A top-to-bottom, clean-sheet overhaul of training standards is needed. The same can be said for many other government regulations.

EDITOR’S NOTE: Jim Hanson has been flying since 1962, and is the long-time fixed-base operator at the Albert Lea, Minnesota airport. He has seen a lot of expansions and contractions in this industry, but says “I’ve never seen government get any smaller!” If you’d like to bend his ear, he can be reached at his airport office at 507-373-0608, or via email at jimhanson@deskmedia.com. Jim welcomes any comments that agree with him, but says “If you disagree, you have to tell me what you think is better.

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