Order 2011-8-16

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twelfth day of August, 2011

Air Charter, Inc., d/b/a Air Flamenco Docket OST 2011-0003

Violations of 49 U.S.C. §§ 41101, 41712, and Served August 12, 2011

41738 and 14 CFR Part 298 

CONSENT ORDER

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

carrier by Air Charter, Inc., d/b/a Air Flamenco (Air Flamenco) 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 Air Flamenco to cease and desist from further violations 

of these statutory provisions and federal regulation and assesses the carrier a compromise 

civil penalty of $30,000.

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. 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). 

Scheduled service in 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 

 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).

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.
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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

Air Flamenco is a Puerto Rico-based air taxi registered under 14 CFR Part 298. Air 

Flamenco advertises air-taxi operations between points within Puerto Rico and other 

destinations in the Caribbean area. At all times relevant to this mater, Air Flamenco did 

not hold a commuter air carrier authorization from the Department. At least as early as 

August 2010, Air Flamenco regularly operated more than four flights per week between 

Culebra, Puerto Rico, and various other points including Vieques, Puerto Rico, Ceiba, 

Puerto Rico, and Isla Grande, Puerto Rico. Additionally, Air Flamenco held out a 

schedule for these flights to investigators who inquired via telephone, email, and in 

person at the airport about scheduled service to these destinations. Air Flamenco

performed the marketed round-trip scheduled services more than four times times per 

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

thereby also violating 49 U.S.C. §§ 41101, 41712, and 41738, and constituting a level of 

service that required it to be found fit as a commuter air carrier.

Mitigation

In October 2007, Air Flamenco states that a Federal Aviation Administration (FAA) 

review of the carrier’s operations that are the subject of this order found no violations of 

Federal Aviation Regulations. Air Flamenco asserts that it conducted its subsequent 

operations relying on the results of this review.

Department’s Response

While Air Flamenco may have believed that it was in compliance with FAA safety

regulations in 2007, it remains clear that Air Flamenco exceeded its authority under the 

Department’s economic regulatory requirements under 49 U.S.C. § 41101 and 14 CFR 

Part 298 when it operated more than four flights per week according to a published 

schedule between Culebra, Puerto Rico, and various other points including Vieques, 

Puerto Rico, Ceiba, Puerto Rico, and Isla Grande, Puerto Rico.

Decision

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

carefully considered the information provided by Air Flamenco but continues to believe 

that enforcement action is warranted. The Enforcement Office and Air Flamenco have 
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reached a settlement of this matter in order to avoid litigation. Air Flamenco 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 $30,000 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

to future noncompliance with the Department’s economic licensing requirements by Air 

Flamenco 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 Air Charter, Inc., d/b/a Air Flamenco 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, Air Charter, Inc., d/b/a Air Flamenco

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

in violation of 49 U.S.C. § 41712;

4. We order Air Charter, Inc., d/b/a Air Flamenco and all other entities owned or 

controlled by or under the common ownership of Air Charter, Inc., d/b/a Air 

Flamenco 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 Air Charter, Inc., d/b/a Air Flamenco a compromise civil penalty of 

$30,000 in lieu of civil penalties that might otherwise be assessed for the 

violations found in ordering paragraphs 2 and 3, above. Of this total amount, 

$15,000 will become due and payable in two equal installments of $7,500. The 

first installment of $7,500 is due and payable within 15 days of the issuance date 

of this order and the second and final $7,500 is due and payable within 180 days 

of the issuance date of this order. The remaining $15,000 shall become due and 

payable if Air Charter, Inc., d/b/a Air Flamenco 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 the civil 

penalty shall become due and payable immediately; and

6. We order Air Charter, Inc., d/b/a Air Flamenco to remit the payment assessed in 

paragraph 5 above by wire transfer through the Federal Reserve Communications 
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System, commonly known as "Fed Wire," to the account of the U.S. Treasury in 

accordance with the instructions contained in the attachment to this order. Failure 

to pay the penalty as ordered shall subject Air Charter, Inc., d/b/a Air Flamenco to 

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

Collection Act, and to possible additional enforcement action for failure to 

comply with this order.

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:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov