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Exemption No. 615 8 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 20591 

********* • + * * + *** * + + * 

In the matter of the petition of * 

EXECUTIVE AIR FLEET, INC. * 

for an exemption from * 

Sections 135.25(b} and (c) of * 

Title 14, Code of Federal Regulations * 

Regulatory Docket 

No. 28223 

GRANT OF EXEMPTION 

By letter dated May 1, 1995, Mr. Randolph M. Kennedy, 

Executive Vice President and Chief Operating Officer, Executive 

Air Fleet, Inc. (EAF), 90 Moonachie Avenue, Teterboro, New Jersey 

07608, petitioned on behalf of EAF for an exemption from Sections 

135.25(b) and (c) of Title 14, Code of Federal Regulations 

(14 CFR), to the extent necessary.to permit EAF to operate its 

aircraft without having the exclusive use of at least one 

aircraft that meets the requirements for at least one kind of 

operation authorized by EAF's Operations Specifications. 

The petitioner requests relief from the following regulations: 

Section 135.25(b) prescribes, in pertinent part, that each 

certificate holder have the exclusive use of at least one 

aircraft that meets the'requirements for' at least'one kind 

of operation authorized in the certificate holder's 

Operations Specifications. In addition,- for each kind of 

operation for which the certificate holder does not have the 

exclusive use of an aircraft, the certificate holder must 

have available for use under a-written agreement (including 

arrangements for performing required maintenance) at least 

one aircraft that meets the requirements for that kind of 

operation. 

Section 135.25(c} prescribes, in pertinent part, that for 

the purposes of paragraph (b) of this section, a person have 

exclusive use of an aircraft if that person has the sole 

possession, control, and use of it for flight, as owner, or 

-••• has a written agreement (including arrangements for 

AFS-95-387-E 
performing required maintenance), in effect when the 

aircraft is operated, giving the person that possession, 

control, and use for at least 6 consecutive months. 

The petitioner supports its request with the•following 

information: 

The petitioner states that it- is a Delaware corporation and 

•' ;- that its principal place of business is at Teterboro 

Airport, in Teterboro, New Jersey. The petitioner is a 14 

CFR part 135 -certificate holder, and its Operations 

Specifications permit it tp conduct on-demand airplane and 

rotorcraft operations. The petitioner's principal business 

is the contractual placement of client-owners' aircraft on 

its operating certificate so that the aircraft can be 

chartered to third parties. 

The petitioner states that under its contracts, it has 

complete operational control of an aircraft when the 

aircraft is being operated under charter. However, the 

owner of the aircraft has complete operational control when 

the owner is using the aircraft for its own account. The 

petitioner has complete maintenance control at all times 

because the Federal Aviation Regulations do not permit 

operators to alternate their operations between 14 CFR parts 

91 and 135. 

The petitioner states that the relief it-now requests has 

previously been granted to EAF by the Federal Aviation 

Administration (FAA). The petitioner states that Exemption 

No. 3438, as amended, was issued to-EAF"on July 7, 1982 

•';::- (Public-Docket No. 22270)' The petitioner states that it 

allowed this exemption to expire on June 30, 1989,^ due to 

changed business capabilities. 

The petitioner states that since the expiration of Exemption 

No. 3438, as amended, it has purchased and maintained a 

single-engine Cessna 172 aircraft solely to comply with the 

requirements of the affected sections. The petitioner now 

requests a renewal of Exemption No. 3438, as amended, or a 

grant of a new exemption. 

The petitioner states that the proposed exemption would be 

in the public interest because the Cessna 172 aircraft, 

which is never flown, is an economic waste because its only 

function is to comply with Section 135.25(b) and (c). The 

petitioner states that money spent on this aircraft could be 

allocated to more beneficial areas, such as safety and 

efficiency improvements, which the petitioner states would 

be in the public interest. 

The petitioner states that if its proposed exemption were 

granted, safety would not be affected.' The petitioner 
believes that the safety justification for Section 135.25 is 

not relevant to its operations because its procedures for 

aircraft management provide a higher degree of safety than 

the implementation of that section. The petitioner also 

states that through its charter contracts,, it has authority 

over the'maintenance and equipment of all its clients' 

aircraft, and maintains them continuously in accordance with' 

the stringent provisions of part 135. Thus, the petitioner 

believes that its operations maintain a level of safety that 

is higher than that which is possible under the affected 

section. 

A summary of this petition was published in the Federal 

Register on July 17, 1995 (60 FR 36454). No comments were 

received. 

The FAA's analysis/summary is as follows: 

Exemption No. 3438, as amended, was-first issued to EAF on 

December 31, 1981, as a denial. 

In that petition, EAF stated that it had also submitted a 

petition for rulemaking that would abolish the part 135 

exclusive-use requirement. EAF's petition for rulemaking 

was published in the Federal Register on September 28, 1981 

(46 FR 47465}. In its-petition,•EAF relied on the FAA's 

abolition in July 1981, of the analogous exclusive-use rule 

of 14 CFR part 121 on the basis that it was an economic 

burden ... that cannot be justified on safety grounds. EAF 

further pointed out that the situations"that exclusive use. 

rules were intended to address (namely, the plethora of 

nonscheduled operators that emerged after World War II) no 

longer existed and that the Civil Aeronautics Board no 

longer had any enforcement interest in the area. The 

petitioner argued that the rule did not even accomplish its 

intended purpose because requiring each part 135 operator to 

have exclusive use of one aircraft hardly constituted 

"positive control" - the ostensible purpose of exclusiveuse rules. 

'"•'• In support of its request for exemption, the petitioner 

further stated that its unique and highly respected 

timesharing and aircraft management business did not, of 

itself, give EAF the exclusive use of one aircraft. 

Therefore, the company had been compelled to purchase, own, 

and maintain' a single-engine Cessna 152 solely in order to 

satisfy the requirements of Section 135.25 . 

A summary of EAF's petition for exemption was published in 

the Federal Register on November 5, 1981 (46 FR 55051). One 

comment was received. The commenter stated, in pertinent 

part, that the air taxi industry had been plagued with 

temporary operators who decided to help defray their 

aircraft expenses or provide employment for out-of-work 
Ti. pilots by getting into the air taxi business for short 

periods of time. According to the commenter, requiring an 

air taxi operator to have at least one aircraft exclusively 

available for charter acted as a means of requiring 

commitment to the air taxi business, which undoubtedly has 

prevented the existence of greater numbers of short-term air 

taxi operators. 

The level of inspection and surveillance of an operator 

temporarily in the air taxi business cannot be as 

comprehensive as it is for full-time operators with whom the 

local FAA offices have dealt with over a period of time. 

Therefore, the possibility exists that those operators will 

maintain a lower level of safety. 

While other means undoubtedly exist to require the 

commitment mentioned above, the FAA notes that no other 

method is currently in effect that would replace the 

aircraft requirement. Therefore, the requirements of 

Section 135.25(b) and (c) should not be deleted at this 

time. 

In issuing Denial of Exemption No. 3438, the FAA reviewed 

the facts presented and the comment received. The FAA found 

that - the aircraft requirement in part 135 provides a stable 

base for certification. At that time, as many as 100 

operators were going out of business monthly, with about the 

same number applying for new certificates. 

The FAA stated that the exclusive-use aircraft requirement 

had been in existence since 1949, and that the industry had 

voiced no objection to the rule. .In response to a proposal 

to revise part 135 in 1977; only a few of the commenters 

requested a change. 

The FAA further stated that from a safety standpoint,-the 

rule provided proper control oyer operations and maintenance 

for one aircraft. While the petitioner argued that this 

does not accomplish that purpose, the F7y\ maintained that by 

requesting ov.-nership or lease of one aircraft, an applicant 

will hesitate before making an application because it must 

commit itself to controlling one aircraft. Without such a 

commitment, the operator might be tempted to reduce aircraft 

maintenance and crew training, and then sell or lease the 

aircraft before routine FAA surveillance reveals possible 

irregularities. Such a situation is not in the public 

interest and could' result in operations conducted at a 

decreased level of safety. 

On February 2, 1982, EAF petitioned for reconsideration of 

Denial of Exemption No. 3438. The petitioner stated that it 

filed its original petition for exemption as a corollary to 

its earlier petition for rulemaking to abolish the part 135 

exclusive-use requirements. The petitioner stated that 
Section 135.25 was irrelevant to the safety of its 

operations in view of its management contracts, which 

provide for the continuous maintenance of all its managed 

aircraft under part 135. In addition, the petitioner noted 

that an outrageous economic waste resulted from EAF's having 

to own and maintain a small airplane, which never was flov.Ti, 

simply to comply with the rule. 

The petitioner stated that Denial of Exemption No. 3438 was 

erroneously based on a public comment opposing a petition 

for rulemaking, and that the comment was not directed toward 

the particular situation that the petitioner cited in 

support of its request for exemption. Also, the petitioner 

stated that the FAA failed to note that three favorable 

comments were submitted to support its petition for 

rulemaking. The petitioner stated that the denial of 

exemption was fundamentally inadequate because the FAA 

failed to address EAF's unique aircraft management 

arrangements and that forcing EAF to own and maintain an 

aircraft that never was flown purely to comply with Section 

135.25 was an outrageous economic waste. EAF stated that, 

accordingly, a grant of exemption would result in an 

increase in aviation safety and a reduction in the economic 

burden of government regulation. 

In response to EAF's petition for reconsideration, the FAA 

issued Grant of Exemption No. 3438A to the petitioner on 

July 7, 1982. The FAA found that the petitioner 'was unique 

with respect to its part 135 operation. This is because EAF 

was primarily responsible for performing management and 

consultant services for certain business aircraft owners. 

Among its contractual obligations, the petitioner performs 

aircraft maintenance and recordkeeping, as well as the 

recruiting and training of flight crewmembers. The 

petitioner had operational control of these business 

aircraft during charter flights conducted in accordance with 

its part 135 certificate and Operations Specifications. For 

example, the aircraft may be operated by EAF under part 135 

for a few days, followed by a period of days during which 

the same aircraft is operated by the owner for private 

operations under part 91.' 

The FAA found that the uniqueness of EAF's operations 

warranted a grant of exemption subject to the condition that 

EAF should not operate under part 135 any U.S.-registered 

civil airplane which had a seating capacity of 20 or more 

passengers, or a payload capacity that exceeded 6,000 

pounds, and was used to conduct non-common carriage 

operations under part 125. Section 125.11(b) states that no 

part 125 certificate holder may conduct any operation that 

results directly or indirectly from any persons' holding out 

to the public an offer to furnish air transportation. Thus, 

to preclude any possible mixing of part 135 common carriage 

operations with part 125•non-common carriage operations for 
compensation and hire,, the FAA found that the petitioner 

should not operate, or list on its part 135 Operations 

Specifications, any airplane which was listed on•the 

Operations Specifications of any part 125 certificate 

holder. The FAA found that this condition was necessary in 

the public interest to provide the highest level of safety 

for persons being transported by the petitioner under its 

part 135 certificate and Operations Specifications. 

Exemption Nos. 3438B and 3438C were, issued as- extensions, 

without any changes being made to the original exemption. 

The FAA finds that, subject to conditions and limitations, 

the petitioner has operated successfully under Exemption No 

343 8, as amended. The FAA further finds that the reasons 

that warranted the previous grant of exemption continue to 

be valid and serve as the basis for a grant of exemption. 

In consideration of the foregoing, I find that a grant of 

exemption is in the public interest. Therefore, pursuant to the 

authority contained in 49 U.S.C. Sections 40113 and 44701, . 

formerly Sections' 313(a) and 601(c) of .the Federal Aviation Act 

of 1958, as amended, delegated to me by the Administrator 

(14 CFR Section 11.53), Executive Air Fleet, Inc., is hereby 

granted an exemption from 14 CFR Sections 135.25(b) and (c) to 

the extent necessary to allow EAF to operate under 14 CFR part 

135, without having the exclusive use of at least one aircraft 

that meets the requirements for at least one kind of operation 

authorized by EAF's Operations Specifications. This exemption is 

subject to the following conditions. EAF shall not operate any 

airplane under part 135 which: 

1. Has a seating capacity of 20 or more passengers, or 

2. Has a payload capacity that exceeds 6,000 pounds, and 

3. Is listed on any part 125 Operations Specifications. 

This exemption terminates on' August 31, 1997, unless sooner 

superseded or rescinded. 

/s/ William J. White 

Acting Director, Flight Standards Service 

Issued in- Washington, D.C. on September 11, 1995.