Air carriers, foreign air carriers, and certain aircraft operators must comply with the Department of Transportation’s (“DOT”) licensing and citizenship rules before operating flights in the United States. DOT citizenship rules and licensing requirements are economic in nature and are designed to protect U.S. operators from being undercut by foreign operators in the U.S. market.
Jetlaw represents operators that require DOT licenses, economic authority, and permits for aviation operations.
DOT Citizenship Requirements for U.S. Air Carriers
Part 121 and Part 135 Citizenship Requirements
The DOT regulates investment into U.S. certificated air carriers, including part 135 on-demand passenger and cargo carriers and part 121 airlines. Air carriers must be majority owned and controlled by U.S. citizens and must comply with the statutory definition of U.S. citizen in 49 U.S.C. §40102(a)(15). The statute is straightforward on its face but highly complex to apply in practice as few corporate structures fit neatly into the citizenship definition.
The DOT has also interpreted the statute to require the air carrier to be under the actual control of U.S. citizens, and so the DOT looks beyond the entity’s legal structure to evaluate control items such as branding agreements, long-term contracts, and even personal relationships. Jetlaw counsels private equity on how to structure their investments to comply with DOT citizenship requirements.
Economic Authority, Permitting, and Compliance
Part 121 / Part 125
Air Carrier Fitness
The DOT’s Air Carrier Fitness Division analyzes and evaluates all applications for new economic authority to determine if an airline (part 121) or part 125 operator applicant is “fit, willing, and able” to conduct operations. The DOT also evaluates whether the applicant is a U.S. citizen as defined in 49 USC § 40102(a)(15).
The DOT monitors the operations and financial conditions of all licensed U.S. airlines to ensure that they continue to be fit to hold their operating authority and to serve the U.S. public. Jetlaw works with clients to prepare and review applications for economic authority, file updates after substantial changes in operations, ownership, or management, and transfer economic authority.
Part 129
Foreign Air Carriers
Foreign air carriers and foreign operators that plan to conduct passenger or cargo operations to, from, or transiting the United States, must obtain a permit from the Department of Transportation. The foreign air carrier or operator must also obtain the foreign air carrier operation specification (OpSpecs) from the FAA. Jetlaw works with clients to prepare and review applications for Part 129 permits and works with the FAA to obtain foreign air carrier OpSpecs.
Part 375
Foreign Civil Aircraft Operations & Permits
The DOT regulates the navigation of foreign civil aircraft in the United States. Foreign civil aircraft are (a) aircraft of foreign registry that are not part of the armed forces of a foreign nation, or (b) U.S.-registered aircraft owned, controlled or operated by persons who are not citizens or permanent residents of the United States.
Foreign civil aircraft rules also apply to drones and other autonomous aircraft. Operators may petition DOT for a permit to conduct planeload charter flights and agricultural and industrial operations. Jetlaw works with clients to prepare and review applications for part 375 permits.
Part 295
Air Charter Brokers
The DOT regulates air charter brokers that arrange single-entity charter flights using direct air carriers, such as part 135 charter operators. Jetlaw’s attorneys help clients comply with DOT’s consumer protection rules and define the roles and responsibilities of the broker, the direct air carrier (charter operator), and the ultimate customer.
Part 380
Public Charter Operators
The DOT regulates the sale of individual seats on charter flights under part 380. Public charter operators that comply with part 380 may arrange part 135 charter flights and sell single seats on the flights to third parties. Jetlaw represents public charter operators in complying with part 380 DOT prospectus filing requirements.
Jetlaw’s attorneys help part 380 operators develop document sets that meet their business and customer needs while complying with DOT’s complex part 380 regulations.