2012-4-17

 UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Thirteenth day of April, 2012

Private Air, Inc. Docket OST 2012-0002

Violations of 49 U.S.C. §§ 41301 and 41712 Served April 13, 2012

 

CONSENT ORDER

This consent order concerns unlawful conduct by Private Air, Inc., (Private Air) in which 

the company held itself out as a direct air carrier,

1 when it was not, and engaged in foreign 

air transportation as an indirect air carrier2 without the economic authority to do so, in 

contravention of 49 U.S.C. § 41301. These violations also constituted unfair and deceptive 

trade practices and unfair methods of competition in violation of 49 U.S.C. § 41712. This 

order directs Private Air to cease and desist from further violations of these statutory 

provisions and it assesses a compromise civil penalty of $25,000.

As background, in addition to applicable Federal Aviation Administration (FAA) safety 

requirements, in order to engage in foreign air transportation3 as a direct or an indirect air 

carrier, a foreign air carrier4 must hold economic authority from the Department. This 

authority can either be in the form of a foreign air carrier permit issued pursuant to 

 

1 A “direct air carrier” is a person or other entity that provides air transportation and that has control over the 

operational functions involved in providing that transportation.

2 An “indirect air carrier” is a person or other entity that engages indirectly in air transportation operations 

and who uses for such transportation the services of a direct air carrier.

3 “Foreign air transportation” means the transportation of passengers or property by aircraft as a common 

carrier for compensation, or the transportation of mail by aircraft, between a place in the United States and a 

place outside the United States when any part of the transportation is by aircraft. 49 U.S.C. § 40102(a)(23).

4 A “foreign air carrier'' means a person, not a citizen of the United States, undertaking by any means, 

directly or indirectly, to provide foreign air transportation. 49 U.S.C. § 40102(a)(21).
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49 U.S.C. § 41301 or an exemption from section 41301, such as that available to direct air 

carriers under 14 CFR Part 2945 or to public charter operators functioning as indirect air 

carriers pursuant to14 CFR Part 380.

Private Air was incorporated in Canada in 2008 to provide marketing, aircraft 

management, and other support services to Pilatus PC-12 Centre of Canada, Inc., (PCC)

(formerly known as V. Kelner Pilatus Center). PCC is a foreign air carrier within the 

meaning of 49 U.S.C. § 40102(a)(21) that holds FAA-issued Part 129 operations

specifications and economic authority from the Department pursuant to 14 CFR Part 294 to 

engage in trans-border charter air transportation with small aircraft. According to Private 

Air, it was to function as an agent of PCC to market and arrange for charter flights 

operated by PCC until such time as Private Air would be financially able to operate as a 

direct air carrier and obtain its own licenses from U.S. and Canadian aviation authorities. 

At no time relevant to this matter did Private Air hold the economic authority from the 

Department to engage in direct or indirect foreign air transportation.

The Office of Aviation Enforcement and Proceedings (Enforcement Office) initiated an 

investigation of Private Air in response to information from the FAA indicating that 

Private Air had operated charter flights into the U.S. from Canada on aircraft registered to 

PCC. The FAA’s records showed that neither PCC’s operations specifications nor its Part 

294 registration listed “Private Air” as a “doing-business-as” (d/b/a) name. Although PCC

apparently was the actual aircraft operator on these occasions, the Enforcement Office 

subsequently learned that from January 2009 until March 2010, Private Air had entered as 

a principal into contracts with charterers for a significant number of trans-border flights 

between Canada and the U.S. In addition, the Enforcement Office found statements on 

Private Air’s printed brochures and on its web site, such as “Private Air operates the 

Pilatus PC-12 aircraft,” that could have misled readers into believing that Private Air was a 

direct air carrier operating aircraft when, in fact, it did not. By holding itself out as a direct 

air carrier when it was not and by engaging in foreign air transportation without economic 

authority, Private Air violated 49 U.S.C. §§ 41301 and 41712.

In mitigation, Private Air asserts that any alleged violation was completely inadvertent and 

states that since its formation, it has been the sales and marketing arm of its sister 

company, PCC. Indeed, the two companies’ relationship was so close in its view, that 

Private Air believed it needed no U.S. authority of its own to conduct its sales and 

marketing activities as PCC was, and remains, a fully licensed air carrier in both Canada 

and the United States. Private Air also notes that it cooperated fully with the Department’s 

investigation and took quick action to remedy the Department’s concerns. Specifically, 

Private Air states that it immediately revised its website and formalized its relationship 

with PCC with a written Marketing Agency Agreement. Private Air also undertook to 

 

5 Part 294 provides an exemption for “Canadian charter air taxi operators” from the permit requirements of 

49 U.S.C. § 41301, provided that such carriers register with the Department and have the requisite level of 

liability insurance. The exemption authority conferred under Part 294 is available only to carriers that 

operate "small aircraft,” which is defined in section 294.2(i) as "any aircraft designed to have a maximum 

passenger capacity of not more than 30 seats and a maximum payload capacity of 7,500 pounds, and/or a 

maximum authorized takeoff weight on wheels not greater than 35,000 pounds.”
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obtain its Canadian air carrier licenses, which it recently received, and anticipates applying 

for its foreign air carrier authority from the Department and FAA in the near future.

The Enforcement Office has carefully considered all of the information available to it, 

including that provided by Private Air, but continues to believe that enforcement action is 

warranted. In order to avoid litigation, the Enforcement Office and Private Air have 

reached a settlement of this matter. Without admitting or denying the violations described 

above, Private Air agrees to the issuance of this order to cease and desist from future 

violations of 49 U.S.C. §§ 41301 and 41712. Private Air further agrees to the assessment 

of $25,000 in compromise of potential civil penalties otherwise assessable against it. This 

compromise assessment is appropriate in view of the nature and extent of the violations in 

question, serves the public interest, and establishes a deterrent to future similar unlawful 

practices by Private Air and other indirect air 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 the 

order as being in the public interest.

2. We find that Private Air, Inc., violated 49 U.S.C. § 41301, as described above, by 

holding itself out as a direct air carrier when it was not and by engaging in foreign air 

transportation without economic authority. 

3. We find that by engaging in the conduct described in paragraph 2 above, Private Air, 

Inc., engaged in an unfair and deceptive practice and an unfair method of competition in

violation of 49 U.S.C. § 41712.

4. We order Private Air, Inc., and all other entities owned and controlled by or under 

common ownership with Private Air, Inc., and its successors and assignees, to cease and

desist from further violations of 49 U.S.C. §§ 41301 and 41712.

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

penalties that might otherwise be assessed for the violations described in ordering 

paragraphs 2 and 3, above. Of this total amount, $12,500 shall become due and payable 30 

days after the issuance date of this order. The remaining $12,500 shall become due and 

payable if Private Air, Inc., violates the payment or the cease and desist provisions of this 

order within one year following the issuance date of this order, in which case the entire 

unpaid portion of the civil penalty shall become due and payable immediately, and Private 

Air, Inc., may be subject to additional enforcement action for failure to comply with this 

order. If Private Air, Inc., fails to comply with the payment provision of this order, Private 

Air, Inc., shall be subject to the assessment of interest, penalty, and collection charges 

under the Debt Collection Act.
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6. Payment shall be made within 15 days of the issuance date of this order by wire 

transfer through the Federal Reserve Communications System, commonly known as "Fed 

Wire," to the account of the U.S. Treasury as described in 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 initiative.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL) 

An electronic version of this document is available at www.regulations.gov