Order 2011-8-22

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty-Fifth day of August, 2011

The Craig Evan Corporation d/b/a Flightexec Docket OST 2011-0003

Violations of 49 U.S.C. §§ 41301, 41703,

and 41712 Served August 25, 2011

CONSENT ORDER

This order concerns unauthorized passenger air service between points in the United States by 

The Craig Evan Corporation doing business as Flightexec (Flightexec), a Canadian air carrier 

authorized by the Department to engage in foreign air transportation1 pursuant to an exemption2

from the permit requirement in 49 U.S.C. § 41301. The carriage of local traffic for 

compensation or hire by foreign air carriers between two points in the United States, a practice 

commonly referred to as cabotage, violates 49 U.S.C. § 41703, which prohibits cabotage except 

under very limited circumstances that do not apply here.3 In addition, a foreign air carrier that 

holds out to the public without authorization, either expressly or by course of conduct, that it 

provides cabotage service violates 49 U.S.C. § 41301. Violations of sections 41301 and 41703 

also constitute an unfair and deceptive trade practice and unfair method of competition in 

violation of 49 U.S.C. §41712. This consent order directs Flightexec to cease and desist from 

such further violations and assesses the carrier a compromise civil penalty of $10,000.

Background

The violations that are the subject of this order occurred between February 11, 2011, and 

February 14, 2011, when a Flightexec-operated Beech BE200 aircraft (registration C-GCET) 

transported a passenger for compensation or hire between Fulton County, Georgia, and 

 1

 Foreign air transportation is “the transportation of passengers or property by aircraft as a common carrier for 

compensation... between a place in the United States and a place outside the United States... .” 49 U.S.C. 

§ 40102(a)(23).

2

 See Docket DOT-OST-2004-17388 re The Craig Evan Corporation d/b/a Flightexec.

3

 The pertinent language of 49 U.S.C. § 41703 states that foreign aircraft may “take on for compensation, at a place 

in the United States, passengers or cargo destined for another place in the United States only if – (1) specifically 

authorized under section 40109(g) of this title... .” 
Thomasville, Georgia, without having carried that passenger between the United States and a 

foreign point. 

On February 11, 2011, the chartered aircraft entered the United States at Fulton County from 

Toronto, carrying two crewmembers and five passengers. At Fulton County, a sixth passenger 

boarded the aircraft and accompanied the party to Thomasville. On February 14, 2011, those 

same six passengers boarded the aircraft in Thomasville and returned to Fulton County, where 

the sixth passenger terminated her journey. The flights were performed pursuant to a singleentity charter4 contract between Flightexec and the charterer, a Canadian company. All of the 

passengers were guests of the charterer.

For purposes of determining whether a violation of 49 U.S.C. § 41703 occurred, the relevant 

analytical perspective here is not that of the charterer, i.e., the entity that contracted and paid for 

the air transportation provided by Flightexec, but that of each individual passenger and his or her 

particular journey, as discussed below. If, for the purposes of such analysis, the movements of 

individual passengers were deemed as collectively comprising a single continuous international 

journey of the charterer, then foreign air carriers could transport potentially large numbers of 

passengers on journeys solely between United States points pursuant to “stopovers” by the 

charterer at those points, so long as the aircraft being used were operated pursuant to a singleentity charter agreements for operations that began and/or ended outside the United States. As a 

consequence, foreign air carriers could circumvent the cabotage prohibition simply by styling 

their charter contracts as being international in character when, in fact, the actual movement of 

most or all of the passengers resulting from those contracts occurred entirely within the United 

States. Such a result would eviscerate the statutory prohibition against cabotage and permit the 

diversion of domestic traffic to foreign air carriers.

In the instant case, there was a single charterer contracting in Canada for air transportation for its 

guests. The resulting movements involved six passengers to, from, or between points in the 

United States. We will look at each in turn. With respect to the Toronto-originating passengers, 

their movements did not constitute cabotage. Rather, each passenger’s transport constituted that 

passenger’s single continuous international journey originating and terminating in Canada with 

three stopovers in the United States (Toronto, Fulton County, Thomasville, Fulton County, 

Toronto). Since Flightexec flew these passengers into the United States from Canada, it could 

lawfully transport them to other United States points, provided that there was no break in each 

passenger’s journey at any point prior to the terminal point. However, with respect to the 

passenger who boarded the flight from Fulton County to Thomasville and then returned to Fulton 

County, her transport constituted cabotage because she was carried only between points in the 

United States on flights operated by Flightexec for compensation.

5

 4

 A single-entity charter is a charter in which the cost is borne by the charterer and not directly or indirectly by the 

individual passengers.

5

 Other foreign air carriers have been found to have engaged in cabotage under circumstances similar to those of 

the instant case, i.e., the carrier moved a number of passengers on journeys entirely between United States points 

pursuant to single-entity charters that began or ended in foreign countries. See, e.g., 926724 Ontario Ltd., d/b/a 

President Air Charter, Violations of 49 U.S.C. §§ 41703 and 41712 and 14 CFR Parts 205 and 294, Order 

2010-10-9 (Oct. 18, 2010); I.M.P. Group Ltd. d/b/a Execaire, Violations of 49 U.S.C. §§ 41301, 41712 and 14 CFR 

Part 294, Order 2006-1-17 (Jan. 1, 2006).
For purposes of its future operations, Flightexec should take care to ensure that any passenger it 

enplanes at a point in the United States, regardless of the reason for the passenger’s journey (e.g., 

business or pleasure), his or her country of citizenship, whether the passenger or another party 

(e.g., the passenger’s host or employer) paid for the transportation, or whether the transportation 

was arranged or paid for in Canada, is transported by Flightexec to Canada or another country6

as part of a single continuous international journey.

In mitigation, Flightexec states that it makes every effort to adhere to the relevant statutes and 

Department regulations and had no intention to circumvent or disregard those statutes or 

regulations. Flightexec explains that the flight in question resulted from a combination of 

circumstances including an unplanned flight involving transport of a medical team and the 

resulting unavailability of another aircraft. Although Flightexec believed at the time of the flight

in question that it was a permissible flight, it now has a better understanding of the relevant 

statutes and Department regulations. Flightexec further states that it has obtained legal counsel

to provide guidance should similar circumstances arise in the future.

Decision

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

considered all of the information provided by Flightexec, but continues to believe that 

enforcement action is warranted. In this connection and in order to avoid litigation, the 

Enforcement Office and Flightexec have reached a settlement of this matter. Without admitting 

or denying the violations described above, Flightexec agrees to the issuance of this order to cease 

and desist from future violations of 49 U.S.C. §§ 41301, 41703, and 41712 and to the assessment 

of US$10,000 in compromise of potential civil penalties otherwise assessable. The Enforcement 

Office believes this compromise is appropriate in view of the nature and extent of the violations 

in question, serves the public interest, and creates an incentive for all foreign air carriers to 

comply fully with the requirements of sections 41301, 41703, and 41712.

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 The Craig Evan Corporation d/b/a Flightexec violated 49 U.S.C. §§ 41301 

and 41703 by holding out and performing air transportation for compensation or hire on 

journeys between points entirely within the United States.

 

6

 Transportation from the United States to a third country may be provided to the extent that transportation is 

permissible under the aviation agreement between the United States and Canada then in effect.
3. We find that, by engaging in the conduct and violations described in paragraph 2, above, 

The Craig Evan Corporation d/b/a Flightexec, engaged in an unfair and deceptive 

practice and unfair method of competition in violation of 49 U.S.C. 41712.

4. We order that The Craig Evan Corporation and all other entities owned and controlled by, 

or under common ownership and control with, The Craig Evan Corporation and their 

successors and assignees, cease and desist from future violations of 49 U.S.C. §§ 41301, 

41703, and 41712.

5. We assess The Craig Evan Corporation d/b/a Flightexec a civil penalty of US$10,000 in 

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

paragraphs 2 and 3 above. Of this total amount, $5,000 is due and payable within 30

days after the service date of this order. The remaining $5,000 shall become due and 

payable if The Craig Evan Corporation d/b/a Flightexec violates this order’s cease and 

desist provisions or the payment provisions within one year following the date of the 

issuance of this order, in which case the entire unpaid portion of this civil penalty shall 

become due and payable immediately. Failure to pay as ordered shall subject The Craig 

Evan Corporation d/b/a Flightexec to the assessment of interest, penalty, and collection 

charges under the Debt Collection Act and to possible enforcement action for failure to 

comply with this order.

6. We order The Craig Evan Corporation d/b/a Flightexec to make the payment set forth in 

ordering paragraph 5, above, by wire transfer through the Federal Reserve 

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

States Treasury. The wire transfer shall be executed in accordance with the instructions 

contained in the Attachment to this order.

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

http://www.regulations.gov