Order 2010-12-22

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twentieth day of December, 2010

Docket OST 2010-0005

National Air Cargo Group, Inc., d/b/a National

Airlines

Served December 20, 2010

Violations of 49 U.S.C. §§ 41101 and 41712 and 

14 CFR 201.5(a) 

CONSENT ORDER

This consent order concerns unauthorized air transportation by National Air Cargo 

Group, Inc., d/b/a National Airlines (National) in violation 49 U.S.C. §§ 41101 and 

41712 and 14 CFR 201.5(a). It directs National to cease and desist from future violations 

of these provisions and assesses the carrier a compromise civil penalty of $20,000.

Applicable Law

In addition to applicable Federal Aviation Administration (FAA) safety-related 

requirements, to engage legally in air transportation, a citizen of the United States1

 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).

is 

required to hold economic authority from the Department pursuant to 49 U.S.C. 

§ 41101 or an exemption from that provision. Operating, advertising, or otherwise 

holding out air transportation services to the public without having such authority is a 

violation of 49 U.S.C. § 41101. In addition, 14 CFR 201.5(a) provides that U.S. 

applicants for certificate authority may not advertise, list schedules, or accept 
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reservations or accept payment or issue tickets for their proposed service until the 

relevant application has been approved by the Department. Violations of section 41101

and section 201.5 also constitute “unfair or deceptive practices” in violation of 49 U.S.C. 

§ 41712.

Background

National is a Michigan-based air carrier that since October 22, 2004, has held a certificate 

from the Department to provide all-cargo air transportation. On July 9, 2010, and August 

13, 2010, National applied for authority to engage in interstate and foreign charter 

transportation of persons, property, and mail. During the pendency of its application, 

National advertised its ability to transport passengers by air. By advertising passenger air 

transportation before it received effective economic authority for that service, National 

violated section 201.5 and engaged in an unfair and deceptive practice and unfair method 

of competition in violation of 49 U.S.C. § 41712.

Mitigation

In mitigation, National states that the information regarding the passenger aircraft was

put on its website by marketing staff that were not aware of the prohibition on holding

out prior to grant of authority. National asserts that its senior management was unaware

that this material was on the company’s website until Department staff called it to the 

company’s attention. The carrier’s management immediately took down the entire 

website until the relevant portions had been expunged. The carrier states that the 

information was available to the public only a short time, and it generated no inquiries 

from the public concerning passenger service. Further, National states that it did not 

engage in any discussions with potential customers, nor did it disseminate any other 

information concerning the availability of passenger charter capacity.

Decision

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

considered the information provided by National, but continues to believe that 

enforcement action is warranted. The Enforcement Office and National have reached a 

settlement of this matter in order to avoid litigation. Without admitting or denying the 

violations described above, National consents to the issuance of this order to cease and 

desist from future violations of 49 U.S.C. §§ 41101 and 41712 and 14 CFR Part 201, and 

to the assessment of $20,000 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 is a strong deterrent against 

future noncompliance with the Department’s requirements governing the conduct of 

applicants for economic authority.
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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 National Air Cargo Group, Inc., d/b/a National Airlines violated 

49 U.S.C. § 41101 and 14 CFR 201.5(a) by advertising passenger air 

transportation without having first been granted the authority to engage in 

passenger air services;

3. We find that by violating 49 U.S.C. § 41101 and 14 CFR 201.5(a) as described in 

ordering paragraph 2, above, National Air Cargo Group, Inc., d/b/a National 

Airlines has engaged in an unfair and deceptive practice and unfair method of 

competition in violation of 49 U.S.C. § 41712; 

4. We order National Air Cargo Group, Inc., d/b/a National Airlines and all other 

entities owned or controlled by or under common ownership National Air Cargo 

Group, Inc., d/b/a National Airlines and their successors and assignees, to 

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

14 CFR 201.5(a). Failure to comply with this cease and desist provision shall 

subject National Air Cargo Group, Inc., d/b/a National Airlines and their 

successors and assignees to further enforcement action;

5. We assess National Air Cargo Group, Inc., d/b/a National Airlines a compromise 

civil penalty of $20,000 in lieu of civil penalties that might otherwise be assessed 

for the violations described in ordering paragraphs 2 and 3, above. Of this total 

penalty amount, $10,000 shall be due and payable within twenty (20) days of the 

date of the issuance of this order. The remaining $10,000 shall be due and 

payable immediately if National Air Cargo Group, Inc., d/b/a National Airlines

violates this order’s cease and desist or payment provisions during the twelve (12) 

months following the service date of this order; and 

6. We order National Air Cargo Group, Inc., d/b/a National Airlines to pay the 

compromise civil penalty assessed in ordering paragraph 5, above, by wire 

transfer through the Federal Reserve Communications System, commonly known 

as “Fed Wire,” to the account of the U.S. Treasury. The wire transfer shall be 

executed in accordance with the instructions contained in the Attachment to this 

order. Failure to pay the compromise penalty as ordered shall subject National 

Air Cargo Group, Inc., d/b/a National Airlines 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.
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This order will become a final order of the Department ten (10) days after its service date 

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

motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov