On February 14th, 2019, the US Department of Transportation brought in new rules to regulate air charter brokers under Part 295.
Brokers are responsible for selling flights on private jets and other aircraft. Because there are so many variables when flying privately, it’s tough to have a fixed price. This means that clients place a lot of trust in brokers to be honest with them, and find them the best deal.
But, before Part 295 came into action, brokerages were not regulated by the FAA or DOT at all. This made it simple for any individual to sell flights without set guidelines or licensing. And, given how much prices can vary, this left a lot of opportunities for some unreliable brokers to bend the truth.
But, luckily, this has begun to change with Part 295.
Read our guide to Part 295 below.
What Can a Broker do?
Air charter brokers can act in three different capacities:
- As a bonafide Agent of the charterer
- As a bonafide Agent of the direct air carrier
- An indirect air carrier or an indirect foreign air carrier
What Rules Must Air Charter Brokers Follow with Part 295?
One of the key ideas behind Part 295 was an emphasis on transparency. Brokers need to make it clear they don’t own or operate the aircraft themselves, and are simply acting as an intermediary.
- They must not misrepresent themselves as direct air carriers.
- They must verify that the air carriers they contract are authorized to hold out, sell, or operate the charter.
- All advertisements should clearly state that the air charter broker is just that - a broker. They must be clear that they’re not an air carrier in operational control of the aircraft.
- They may only display their name and logo on the aircraft if the direct air carrier’s logo is displayed clearly on the aircraft. They must ensure consumers are not misled into thinking that the broker is the direct air carrier.
Disclosures Required in Part 295
Brokers are required to make three compulsory and three voluntary disclosures to the charterer. Voluntary disclosures are only required upon request. If these disclosures aren’t received within a reasonable amount of time, the charterer has the right to cancel. This includes a full refund for the flight and any services in connection with it.
Essentially, this means brokers have to provide transparent information. If they don’t, they’ll be held accountable and shoulder the financial burden.
Here are the compulsory and voluntary disclosures in Part 295:
- The corporate name of the direct air carrier in operational control of the aircraft. Plus, any other names which the direct air carrier uses.
- The capacity in which the air charter broker is acting when contracting the air transportation. Are they acting as an indirect air carrier, an agent of the charterer, or as an agent of the air carrier?
- The existence, or absence of, liability insurance held by the air charter broker. And any limits it may have. This can include coverage for:
- The charterer
- Other passengers
- On-board property
Brokers are required to provide these upon request by the charterer.
- If acting as an agent of the charterer, the air charter broker must disclose the existence of any relationship with the direct air carrier. This includes anything which could have a bearing on the selection of the direct air carrier in control of the flight.
- The total cost of the air transportation paid by the charterer, including all taxes and fees.
- Any fees collected by third parties. Here, a third party is defined as a person or entity other than the air charter broker or direct air carrier.
Air charter brokers must refund clients promptly if they can’t provide air transportation as arranged. For credit card purchases, brokers must follow the requirements of 14 CFR 374.3 and 12 CFR Part 226. For cash and checks, refunds must be made within 20 days of receiving a request.
Unfair & Deceptive Practices
Part 295 states that an air charter broker shall not engage in any unfair practices.
- Misrepresentations that lead the public to believe the air charter broker is a direct (or direct foreign) air carrier when they’re not.
- Misrepresentations of the quality or kind of service. Or the type of aircraft.
- Misrepresentations of the time of departure or arrival, points served, route, stops, or total trip-time from point of departure to destination.
- Misrepresentations of the qualifications of pilots. Or the safety records and certification of pilots, aircraft, or air carriers.
- Misrepresentations that passengers are directly insured when they aren’t.
- Misrepresentations of fares or charges for air transportation or related services.
- Misrepresentations of involvement (including membership) with an organization that audits air charter brokers or carriers. Or misrepresentations that the brokers or carriers for a particular flight meet a standard set by an auditing organization.
- Misrepresentations that a contract for a specified carrier, aircraft, or flight – including specific times – has been arranged, without a binding commitment with a carrier.
- Selling or contracting for air transportation while knowing, or having reason to believe, that it can’t be legally performed by the arranged carrier.
- Misrepresentations of the requirements that must be met by charterers to qualify for charter flights.
- Misleading customers regarding the status of the air charter broker. This includes the use of an air charter broker’s name in association with a carrier’s name. It must be clear that the two are separate.
In Conclusion: The New Part 295 Regulations Hold Charter Brokers to a Higher Standard
A private jet charter broker’s most important duty is to ensure that their clients’ travel needs are met. However, not all brokers approach this mission with the same commitment to trust, transparency, and safety as others.
In fact, it may be surprising to learn that until quite recently, there were no regulations at all governing the practices of aircraft charter broker companies. This, unfortunately, led too many brokers to misrepresent their business practices, taking advantage of their clients and compromising their safety – which, of course, led to negative perceptions of the aircraft charter industry.
The U.S. Department of Transportation took a significant step last year toward eliminating such unscrupulous practices by enacting Part 295 of the Federal Aviation Regulations, a set of commonsense rules governing the business practices of charter aircraft brokers that also provide several protections for clients chartering private aircraft.
What does that mean for you when chartering a private jet? First and foremost, Part 295 requires that your aircraft charter broker clearly states they act solely as an agent between you, their client, and the operator actually performing the flight, and not in any way represent their own company as the owner or operator of the aircraft.
That seems a reasonable expectation; however, some charter brokers may claim to fly their own aircraft in an attempt to gain a competitive advantage. In other words, they lie… deliberately misrepresenting the nature of their business by concealing information about the actual operator, deceiving their clients and even risking their safety.
Safety is also the reason that Part 295 requires aircraft charter brokers to provide their clients with the name of the operator performing their flight, including any DBA (doing business as) identities. Brokers must also disclose any pre-existing contracts they may have with the operator, providing an additional measure of transparency.
Brokers must also declare the terms and limits of any liability coverage the broker holds, and disclose the total cost of the flight, including all third-party charges. They must also promptly refund their clients.
Your Broker is Your Advocate
In short, these new regulations help ensure that private jet charter brokers remain focused on their most important responsibility: that their customers’ experience will be safe, transparent, efficient, and without undue costs.
Learn more about Part 295 by contacting PBJ’s team of experienced air charter brokers professionals at +1-877-727-2538.