Order 2010-9-23 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the 21st day of September, 2010

Craig Air Center, Inc. Docket OST 2010-0005

Violations of 49 U.S.C. §§ 41101, 41712, and Served September 21, 2010

41738 and 14 CFR Part 298 

CONSENT ORDER

This consent order concerns unauthorized scheduled passenger service as a commuter air 

carrier by Craig Air Center, Inc., (CAC) in violation of 49 U.S.C. §§ 41101, 41712, and 

41738 and 14 CFR Part 298, the Department’s commuter air carrier requirements. It

directs CAC to cease and desist from further violations of these statutory provisions and 

federal regulation and assesses the carrier a compromise civil penalty of $25,000.

Applicable Law

Pursuant to 49 U.S.C. § 41101, citizens of the United States1 must have a certificate of 

public convenience and necessity from the Department prior to engaging in air 

transportation. Part 298 creates an exemption from the certificate requirement in section 

41101 for a class of carriers called air taxi operators, which are carriers that use only 

small aircraft2 and perform either on-demand service or no more than four round-trips 

per week in any single market according to a published schedule.3

 1

 A “citizen of the United States” includes a corporation organized in the United States that (1) meets 

certain specified standards regarding the citizenship of its president, officers and directors, and holders of 

its voting interest and (2) is under the actual control of citizens of the United States. 49 U.S.C. 

§ 40102(a)(15).

 Scheduled service in 

2 Small aircraft are aircraft originally designed to have a maximum passenger capacity of 60 seats or 

fewer or a maximum payload capacity of 18,000 pounds or less. 14 CFR 298.2.

3

 The economic licensing requirements of section 41101 and Part 298 are separate and distinct from the 

safety-related licensing requirements of the Federal Aviation Administration (FAA), and the FAA’s rules 

regarding scheduled service differ. 
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excess of this level renders the air taxi operator a “commuter air carrier” for purposes of 

Part 298. Under 49 U.S.C. § 41738, the Department must find a commuter air carrier 

“fit, willing, and able” prior to commencing such scheduled service. Section 298.21(d) 

implements this statutory fitness requirement with respect to air taxi operators seeking to 

provide service as commuter air carriers. Operating, advertising, or otherwise holding 

out commuter air service without having first been found fit violates 14 CFR 298.21(d), 

as well as 49 U.S.C. §§ 41101 and 41738. In addition, violations of this regulation and 

these statutory provisions also constitute violations of 49 U.S.C. § 41712, which 

prohibits carriers from engaging in unfair and deceptive practices and unfair methods of 

competition.

Facts and Conclusion

CAC is a Florida-based air taxi registered under 14 CFR Part 298. At all times relevant 

to this mater, CAC did not hold commuter air carrier authority from the Department. At 

least as early as May 2009, CAC published on its website a schedule advertising more 

than four flights between Saint Augustine, Florida, and Marsh Harbor, Bahamas, a level 

of service that required it to be found fit as a commuter air carrier. For a period of time 

thereafter, CAC performed the advertised round-trip scheduled services five times per 

week, thus exceeding the scope of its exemption authority under 14 CFR Part 298 and 

violating 49 U.S.C. §§ 41101, 41712, and 41738.

Mitigation

In mitigation, CAC states that it did not intentionally advertise and operate services in 

violation of the Department’s economic licensing requirements. CAC states that as soon 

as it was notified of the possible violations, it immediately ceased holding out and 

operating round-trip scheduled services in excess of the four-flight-per-route weekly 

maximum allowed for air taxis. CAC notes that it has been open and forthright with the 

Department throughout the investigation, and that it is now in compliance with the 

Department’s economic licensing requirements.

Decision

The Office of Aviation Enforcement and Proceedings (the Enforcement Office) has 

carefully considered the information provided by Craig Air Center, Inc., but continues to 

believe that enforcement action is warranted. The Enforcement Office and Craig Air 

Center, Inc., have reached a settlement of this matter in order to avoid litigation. Craig 

Air Center, Inc., consents to the issuance of an order to cease and desist from future 

violations of 49 U.S.C. §§ 41101, 41712, and 41738 and 14 CFR Part 298 of the 

Department’s regulations, and to the assessment of $25,000 in compromise of potential 

civil penalties otherwise due and payable pursuant to 49 U.S.C. § 46301. 

This compromise assessment is appropriate considering the nature and extent of the 

violations described herein and serves the public interest. It represents a strong deterrent
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to future noncompliance with the Department’s economic licensing requirements by 

Craig Air Center, Inc., as well as by other carriers. 

This order is issued under the authority contained in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY,

1. Based on the above discussion, we approve this settlement and the provisions of 

this order as being in the public interest;

2. We find that Craig Air Center, Inc., violated 14 CFR 298.21(d) and 

49 U.S.C. §§ 41101 and 41738 by holding out and operating commuter air service 

without having first been found fit as a commuter air carrier;

3. We find that by violating 14 CFR 298.21(d) and 49 U.S.C. §§ 41101 and 41738 

as described in ordering paragraph 2, above, Craig Air Center, Inc., has engaged 

in an unfair and deceptive practice and unfair method of competition in violation 

of 49 U.S.C. § 41712;

4. We order Craig Air Center, Inc., and all other entities owned or controlled by or 

under the common ownership of Craig Air Center, Inc., and its successors and 

assignees, to cease and desist from violations of 49 U.S.C. §§ 41101, 41712, and

41738 and 14 CFR Part 298;

5. We assess Craig Air Center, Inc., a compromise civil penalty of $25,000 in lieu of 

civil penalties that might otherwise be assessed for the violations found in 

ordering paragraphs 2 and 3, above;

a. Of this total penalty amount, $12,500 shall be due and payable in four 

equal installments;

i. The first payment of $3,125 shall be due and payable within 30 

days after the date of issuance of this order; 

ii. The second payment of $3,125 shall be due and payable 60 days 

after the date of issuance of this order; 

iii. The third payment of $3,125 shall be due and payable 90 days after 

the date of issuance of this order; and

iv. The fourth payment of $3,125 shall be due and payable 120 days 

after the date of issuance of this order; and

b. The remaining $12,500 shall be due and payable if Craig Air Center, Inc.,

violates this order’s cease and desist or payment provisions within one 

year following the date of issuance of this order, in which case the entire 
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unpaid portion of the civil penalty shall be due and payable immediately, 

and Craig Air Center, Inc., may be subject to additional enforcement 

action for failure to comply with this order; 

6. Failure to pay the penalty as ordered shall also subject Craig Air Center, Inc., to 

the assessment of interest, penalty, and collection charges under the Debt 

Collection Act; and

7. Payments shall be made by wire transfer through the Federal Reserve 

Communication System, commonly known as “Fed Wire,” to the account of the 

U.S. Treasury in accordance with the attached instructions.

This order will become a final order of the Department 10 days after its service date 

unless a timely petition for review is filed or the Department takes review on its own 

motion.

BY:

SAMUEL PODBERESKY

Assistant General Counsel for

 Aviation Enforcement and Proceedings

(SEAL)

An electronic version of this document is available at

www.regulations.gov