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61684 Federal Register / Vol. 70, No.

205 / Tuesday, October 25, 2005 / Notices

In addition, one copy of any removal equipment building, new DOT Docket Web site: Go to http://
comments submitted to the FAA must airfield sand & deicer storage building, dms.dot.gov and follow the instructions
be mailed or delivered to Mr. Mark triturator and garbage facility, fuel farm for sending your comments
VanLoh, Director of Aviation of the relocation—MKC. electronically.
Kansas City Aviation Department at the Class or classes of air carriers which Government-wide rulemaking Web
following address: 601 Brasilia Avenue, the public agency has requested not to site: Go to http://www.regulations.gov
Kansas City, Missouri 64153. be required to collect PFCs: and follow the instructions for sending
Air carriers and foreign air carriers Nonscheduled/On-Demand Air Carriers your comments electronically.
may submit copies of written comments filing FAA Form 1800–31. Mail: Docket Management Facility;
previously provided to the Kansas City Any person may inspect the U.S. Department of Transportation, 400
Aviation Department under § 158.23 of application in person at the FAA office Seventh Street, SW., Nassif Building,
Part 158. listed above under FOR FURTHER Room PL–401, Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: INFORMATION CONTACT and at the FAA Fax: 1–202–493–2251.
regional Airports office located at: 901 Hand Delivery: Room PL–401 on the
Lorna K. Sandridge, PFC Program
Locust, Kansas City, Missouri 64106. plaza level of the Nassif Building, 400
Manager, 901 Locust, Kansas City,
In addition, any person may, upon Seventh Street, SW., Washington, DC,
Missouri 64106, (816) 329–2641. The
request, inspect the application, notice between 9 a.m. and 5 p.m., Monday
application may be reviewed in person
and other documents germane to the through Friday, except Federal holidays.
at this same location.
application in person at the Kansas City FOR FURTHER INFORMATION CONTACT: Kent
SUPPLEMENTARY INFORMATION: The FAA
Aviation Department. Stephens, Aviation Safety Inspector, Air
proposes to rule and invites public Transportation Division, Flight
comment on the application to impose Issued in Kansas City, Missouri on October
Standards Service, Room 831, 800
a PFC at Kansas City International 17, 2005.
Independence Avenue, SW.,
Airport for use at Kansas City George A. Hendon, Washington, DC 20591, telephone: (202)
International Airport and Charles B. Manager, Airports Division, Central Region. 267–8166.
Wheeler Downtown Airport under the [FR Doc. 05–21227 Filed 10–24–05; 8:45 am]
provisions of the 49 U.S.C. 40117 and BILLING CODE 4910–13–M
Comments Invited
Part 158 of the Federal Aviation The FAA invites interested persons to
Regulations (14 CFR Part 158). submit written comments, data and
On April 27, 2005, the FAA DEPARTMENT OF TRANSPORTATION views on the draft guidance contained
determined that the application to in Section D below. The most helpful
impose and use the revenue from a PFC Federal Aviation Administration comments reference a specific portion of
submitted by the Kansas City Aviation the proposed guidance, explain the
Department was not substantially [Docket No. FAA–2005–22765] reason for any recommended change,
complete within the requirements of and include supporting data. We ask
§ 158.25 of Part 158. The following Wet Lease Policy Guidance that you send us two copies of written
items were required to complete the AGENCY: Federal Aviation comments.
application: Airspace determinations on Administration (FAA), DOT. We will file in the docket all
the new aircraft rescue fire fighting comments we receive, as well as a
ACTION: Notice; request for comments.
facility, perimeter fencing replacement report summarizing each substantive
at MKC, and the upgrade of the glycol SUMMARY: It has long been contrary to public contact with FAA personnel
collection system. The Kansas City Federal Aviation Regulations for an air concerning this proposed policy. The
Aviation Department has submitted the carrier to ‘‘wet lease’’ an aircraft from an docket is available for public inspection
supplemental information to complete individual or entity that is not before and after the comment closing
this application. The FAA will approve separately authorized to engage in date. If you wish to review the docket
or disapprove the application, in whole common carriage. By this notice, the in person, go to the address in the
or in part, not later than February 9, Federal Aviation Administration (FAA) ADDRESSES section of this notice
2006. seeks comment on proposed policy between 9 a.m. and 5 p.m., Monday
The following is a brief overview of guidance identifying those commercial through Friday, except Federal holidays.
the application. arrangements that would be considered You may also review the docket using
Proposed charge effective date: to be unlawful wet lease arrangements the Internet at the Web address in the
January 1, 2015. under these regulations as well as those ADDRESSES section.
Proposed charge expiration date: that would be permissible. Additionally, Privacy Act: Using the search function
February 1, 2017. we seek comment on our proposed of our docket Web site, anyone can find
Level of the proposed PFC: $4.50. treatment of certain other commercial and read the comments received into
Total estimated PFC revenue: arrangements between air carriers and any of our dockets, including the name
$56,946,228. aircraft owners that—while not of the individual sending the comment
Brief description of proposed amounting to illegal wet leases—could (or signing the comment on behalf of an
project(s): Two new aircraft rescue fire nevertheless result in the air carrier association, business, labor union, etc.).
fighting (ARFF) vehicles, extend impermissibly ceding operational You may review DOT’s complete
Taxiways B and D, rehabilitate control of flight to non-certificated Privacy Act Statement in the Federal
Taxiways M and L, update airport entities. Register published on April 11, 2000
master plan and Part 150 study, New (65 FR 19477–78) or you may visit
ARFF facility, inline baggage screening DATES: Send your comments on or http://dms.dot.gov. Before acting on this
system, rehabilitate Taxiway D, airfield before November 25, 2005. proposal, we will consider all comments
lighting rehabilitation, perimeter ADDRESSES: You may send comments we receive on or before the closing date
fencing replacement—MKC, terminal [identified by Docket No. FAA–2005– for comments. We will consider
improvements—holdrooms, upgrade 22765] using any of the following comments filed late if is possible to do
glycol collection system, airfield snow methods: so without incurring expense or delay.

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Federal Register / Vol. 70, No. 205 / Tuesday, October 25, 2005 / Notices 61685

We may change this proposal in light of and related agreements, are consistent duty status of its pilots, the means to
the comments we receive. with operational control requirements.1 communicate an order to the crew to
If you want the FAA to acknowledge delay, cancel, or divert a flight, or
B. Operational Control
receipt of your comments on this sufficient leverage or authority over its
In connection with its safety oversight crews to assure compliance with the
proposal, include with your comments and investigatory responsibilities, the carrier’s lawful instructions.2
a pre-addressed, stamped postcard on FAA must always be able to identify In each case in which there is a
which the docket number appears. We who is accountable for the safety of each question about operational control the
will stamp the date on the postcard and flight, whether commercial or not. FAA also must ultimately make a legal
mail it to you. Central to this inquiry is determining determination as to which person
SUPPLEMENTARY INFORMATION: which person or entity as a factual should have exercised such control. In
matter exercise operational control of some cases the FAA will determine that
A. Background any particular flight. Our regulations the operational control of a commercial
provide that operational control means flight was actually exercised—
Federal Aviation Regulations provide ‘‘with respect to a flight, * * * the unlawfully—by an uncertificated person
that only entities properly certificated exercise of authority over initiating, who did not comply with the more
by the FAA may maintain operational conducting or terminating a flight.’’ See demanding safety rules that apply to
control of any flight conducted for 14 CFR 1.1. We attempt to determine commercial operations. In other cases, a
commercial purposes under 14 CFR who has ‘‘real-world’’ control over an properly certificated air carrier or
parts 121 and 135. Recent information aircraft and its crew by evaluating all commercial operator has actively
obtained by the FAA regarding certain the facts and circumstances surrounding participated or acquiesced in
arrangements in the on-demand air that flight operation. The FAA, the commercial arrangements that allowed
carrier industry has highlighted existing National Transportation Safety Board, the illegal operator to hold itself out to
concern over whether the air carriers in the courts, and others look beyond the the public as a legitimate air carrier.
such arrangements are consistently written provisions of contracts and Sometimes unlawful arrangements
maintaining (as required) operational other commercial documents and the become apparent only after a review of
control of all flights purportedly parties’ assertions regarding the written contracts between the
conducted under the authority of their ‘‘operational control’’ to determine parties and other evidence reveals that
certificates. In some cases, air carriers who—as a factual matter—controlled a the relationship obfuscates which entity
have evidently allowed aircraft owners flight operation. or person has ‘‘operational control’’ of a
and lessees who hold no commercial For purposes of this guidance, a flight and, thus, which entity or
certificates to conduct operations under ‘‘surrender of operational control’’ by an individual should be held accountable
the auspices of the air carrier’s air carrier means a situation in which an for the overall safety of a flight. Where
certificate, and in a few cases, falsely air carrier has inappropriately allowed such operations end safely, it has been
holding themselves out to the public as an uncertificated person or entity to our experience that the carrier and the
air carriers themselves. As a result, engage in air carrier operations under aircraft owner typically assert that the
some members of the traveling public the carrier’s name. See e.g., commercial operation was lawfully
have paid for air transportation by Administrator v. Darby Aviation d/b/a conducted by the air carrier under our
Alphajet, Inc., NTSB Order Number E– regulations. Unfortunately for the
persons that do not hold proper FAA
5159 (2005). In FAA Notice N 8400.83 public, where such flights involve safety
certification and, just as important, do
(issued on June 10, 2005), the Director violations, the carriers under whose
not necessarily comply with the more
of the Flight Standards Service auspices the flights were conducted may
demanding safety rules for air carriers cautioned air carriers and other claim they were unaware that a
and other commercial operators. commercial operators who are commercial flight occurred under their
The FAA has taken several actions to certificated under part 119, that they certificate—even though that aircraft is
address this problem. We have begun may not franchise or lease out their on the part 135 operator’s specifications.
enforcement proceedings to halt the authority to engage in part 135 The carrier may point to the fact that it
effective franchising of air carrier operations to third parties, as this never had legal possession of the aircraft
certificates and the conduct of air carrier constitutes a surrender of operational that was illegally flown in commercial
operations by unqualified persons. On control. operations, and thus the carrier will
June 10, 2005 the FAA’s Flight A ‘‘loss of operational control’’ or disclaim responsibility for the
Standards Service issued a notice to all ‘‘inadquate operational control’’ operation. The FAA deems
inspectors directing them to contact includes those situations in which the arrangements that facilitate such
each air carrier they oversee to make carrier has not surrendered control to confusion to be wholly at odds with the
sure that these carriers understand their another person or entity, but has requirement that an air carrier must
obligations to maintain operational inadequately exercised the necessary
control of flights conducted under their supervisory actions over the 2 It is not considered a proper exercise of

maintenance of aircraft listed on its ‘‘operational control’’ for the carrier to delegate to
certificates. In addition, the FAA has the pilot in command the responsiblity for
sent out information request to air operations specifications or has not determining for the carrier whether the pilot in
carriers to ascertain the types of adequately supervised and directed its command and other flight crewmembers are
arrangements under which they conduct own pilots. A carrier has inadequate qualified for the flight that day. The safety benefit
operational control if it lacks either in the FAA rules of having ‘‘redundancy’’—here,
their business so as to assess whether the carrier verifying the qualifications of the pilots
those arrangements comply with these timely knowledge about the flight and for the flight—cannot be overstated. The carrier
obligations. itself has to determine, for example, whether the
1 This proposed guidance concerns requirements flight crew meets rest period requirements and
The guidance proposed in this notice related to safety regulation by the FAA. Carriers and whether the flight crewmember has exceeded flight
is intended to assist air carriers and others should note that it does not address time limits. The safety benefits of having a
economic regulatory requirements, which are redundant safety duty imposed—on both the carrier
others in evaluating whether certain separate and under the purview of the Office of the and the pilot—is lost if the carrier delegates its
arrangements, including aircraft leases Secretary of the Department of Transportation. independent responsibility to the pilot.

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61686 Federal Register / Vol. 70, No. 205 / Tuesday, October 25, 2005 / Notices

clearly retain operational control of all not be under the direction and control by the owner’s issuance of IRS Form W–
its flights, and we will, at a minimum, of the certificated air carrier. In a true 2’s) helps reduce any confusion as to
act promptly to remove aircraft used in dry lease, the lessee is fully accountable which party has the authority and the
such arrangements from the air carrier’s for the safety of the flight operations it responsibility to conduct a safe for-hire
operations specifications. conducts with the aircraft in its flight. We believe that such an
Finally, it should be without saying possession. In contrast to a dry lease acknowledgement may cause air carriers
that any air carrier must have in place situation, in a wet leasing arrangement, to exercise greater oversight of aircraft
personel who are knowledgeable about although the lessee nominally has legal placed on their operations specifications
aviation, including FAA safety possession of the aircraft, the actual and to take whatever steps are necessary
regulations, such that they can gather control of the aircraft is with the entity to ensure the aircraft owners do not
and review relevant information about directing the crewmembers. Where only hold themselves out as conducting
the airworthiness of the aircraft and the one of the parties has been certificated commercial flights under the auspices of
condition of the crewmembers. If the air to engage in common carriage the air carriers’ certificates.
carrier does not have knowledgeable operations, the other’s agreement to
people in place, it is highly unlikely 3. Other Arrangements
provide the crew raises significant
that the carrier will meet the stringent issues as to who really has control over Operational control issues do not
safety standards necessary to satisfy the the crew: the lessor or the air carrier. arise solely in the context of wet leases
statutory ‘‘duty * * * to provide service to air carriers from people not
with the highest possible degree of 2. Permissible Use of the Aircraft authorized to engage in common
safety in the public interest.’’ See 49 Owner’s Crew carriage. Even in situations where it is
USC Section 44701(d)(1). The FAA is well aware that many legal for a carrier to enter into a wet
aircraft owners lease their aircraft to lease (e.g., a U.S. carrier can wet lease
C. Affected Commercial Arrangement part 135 on-demand operators so as to from another U.S. carrier), operational
Commercial arrangements between recover overhead expenses when the control issues arise and thus the FAA
U.S. air carriers and others must ensure owner does not need to use the aircraft. requires that such leases be submitted to
effective operational control by an air Nothing in this guidance is intended to the FAA for an assessment as to which
carrier over its flights. Beyond avoiding bar these arrangements or to prohibit FAA-certificated carrier has operational
wet leases with non-certificated entities any air carrier from dry leasing an control. See 14 CFR 119.53(a) and
(discussed below), a carrier must aircraft from its owners or lessor. The 119.53(c). Typically, in such
generally ensure that all business FAA has no safety objections to this agreements, the wet lessor will have
arrangements provide its management practice so long as the air carrier—and operational control instead of the lessee
personnel with not only the contractual no one else—exercises actual primarily because of the former’s
authority to direct the crewmembers to operational control of the for-hire business relationship with the crew. We
terminate, delay, divert or modify the flights. To satisfy this requirement, the permit these arrangements because there
carrier’s flights, but also with effective carrier must have effective mechanisms is an assurance that all the parties know
authority by virtue of their relationship in place to make sure the crews will that the revenue flights must be flown
with the crewmembers. It is not enough adhere to the carrier’s instructions. under part 121 or 135, and both parties
simply to assert in a contract that the Moreover, the carrier cannot participate have been certificated for air carrier
carrier has ‘‘operational control’’ if other in an arrangement that allows the operations.
aspects of the parties’ agreements aircraft owner to interfere with the
undermine or otherwise nullify effective carrier’s ability to make and implement D. Proposed Guidance
means of control by the carrier. safety decisions needed to comply with When our Flight Standards Service
FAA air carrier safety rules. In discovers contractual language or other
1. Wet Leases particular, we think it inappropriate for evidence of wet leasing prohibited
The FAA prohibits ‘‘wet leases’’ an aircraft owner or other non- under section 119.53(b), our current
between a certificate holder under part certificated entity to determine who will policy is to take two actions. First, we
119 and a foreign air carrier or another be the pilots assigned to a part 135 will not add aircraft to a carrier’s
foreign person or any other person not flight. Thus, the carrier may not enter operations specifications to the extent
authorized to engage in common into any contract by which it agrees such aircraft are subject to wet leases.
carriage. See 14 CFR 119.53(b). To directly or indirectly to utilize only the Second, we will begin an investigation
understand a ‘‘wet lease,’’ one must first aircraft owner’s or lessor’s pilots when as to the carrier’s use of other aircraft
understand the meaning of a ‘‘dry conducting part 135 flights. already on its operations specifications
lease.’’ In aviation, a dry lease occurs By this notice the FAA does not to ascertain whether they involve an
when legal possession of an aircraft intend to prohibit air carriers from using improper wet lease under section
transfers from the owner to another a pilot in part 135 operations simply 119.53(b).
person (whether that person is the first because that pilot also is employed by
lessee or a sublessee). A ‘‘wet lease,’’ the owner of the aircraft. A key question 1. Wet Leases
under the Federal Aviation Regulations, in such commercial arrangements is a. If an air carrier and an aircraft
is any leasing arrangement whereby a whether the carrier is obligated directly owner (or someone having legal
person agrees to provide an entire or indirectly to use the aircraft owner’s possession of the aircraft) enter into an
aircraft and at least one crewmember. crew. In this regard, a critical factor agreement whereby legal possession of a
See 14 CFR 119.3 would be written acknowledgements by specific aircraft is transferred from the
The agency adopted the prohibition the carrier, the aircraft owner, and the owner (or first lessee) to the air carrier
on wet leases in § 119.53(b), in part, pilots that the crew serves as the agents and if the owner (or first lessee)
because we were concerned that the air of the air carrier during all part 135 provides a crewmember as part of the
carrier might not exercise operational operations. An acknowledgement that lease, then such an arrangement
control over the crew leased from the the pilots are the carrier’s agents (even constitutes a wet lease.
other (non-certificated) entity, with the where the pilots remain the employees b. If an air carrier and an aircraft
result that the entire operation would of the owner, as evidenced, for example, owner enter into an agreement

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Federal Register / Vol. 70, No. 205 / Tuesday, October 25, 2005 / Notices 61687

captioned as a ‘‘dry lease’’ of an aircraft 2. Other Arrangements Raising Serious FAA encourages carriers to consider
from the owner to the air carrier, and in Concern as to Operational Control of whether they have sufficient controls in
a separate document the same parties Flight place that they have timely knowledge
agree that the owner will provide a a. Operational control issues may to answer the following questions:
crewmember to the carrier, such an arise in situations where there are no 1. What is the actual location of each
arrangement would still constitute a wet leases whatsoever. On occasion an air aircraft listed on the carrier’s operations
lease. The FAA would evaluate the two carrier may make arrangements with an specifications?
documents together. Such an 2. Who has the carrier authorized to
aircraft owner to use its aircraft without
arrangement (assuming the owner is not fly the aircraft?
entering into a real lease, and thus, the
3. Does the carrier have mechanisms
a certified air carrier) also would be carrier never gets legal possession of the
in place to prevent unauthorized use of
contrary to section 119.53(b). An air aircraft. This sort of informal
the aircraft?
carrier does not have actual operational arrangement will raise significant legal 4. Who or what is being transported
control of the carrier flight operations if concerns over inadequate operational on the aircraft?
a person other than the air carrier can control when the carrier has no 5. Is a given flight for compensation
determine who the pilots of the aircraft contractual arrangements with the crew, or hire?
will be or can exercise control over does not directly pay the crew for their 6. If the flight is for compensation or
those pilots. service in air carrier operations, and hire, are the crewmembers properly
receives no direct compensation by the certificated and trained?
c. If an air carrier and an aircraft customers for transporting passengers or
owner enter into an arrangement labeled 7. Are the crewmembers loyal to the
property. air carrier (as opposed to the aircraft
as a ‘‘dry lease’’ of an aircraft from the b. Another arrangement raising
owner to the carrier but in a separate owner or some other entity) so that they
serious legal concern arises when a will adhere to the carrier’s instructions
document the parties give the owner the certificated air carrier receives a flat not to fly or to delay a flight or to divert
right to consent to or approve of the ‘‘certificate use’’ fee from the aircraft a flight?
selection of crew, then such an owner regardless of the number of 8. What procedures and mechanisms
arrangement might be treated as a wet commercial flights conducted per are in place so that the carrier can fulfill
lease depending on the particular month, and the transportation customer its duty to ensure that the aircraft is
circumstances. If in practice only the pays the aircraft owner directly. Absent airworthy and meets all of the carrier’s
owner’s pilots would be approved (as evidence to the contrary showing that maintenance programs?
shown, for example, by evidence that all the air carrier exercised actual and legal
Issued in Washington, DC on October 19,
other pilots had been vetoed for use by operational control of all flights, such 2005.
the owner), the FAA would deem this arrangements constitute an
James J. Ballough,
leasing arrangement to be a ‘‘wet lease’’ inappropriate franchising of an air
carrier certificate. Director, Flight Standards Service.
in contravention of § 119.53(b). A carrier
c. Some air carriers only occasionally Andrew B. Steinberg,
cannot be said to enjoy actual
lease aircraft from particular owners, Chief Counsel.
operational control of its flight
operations if an aircraft owner (non- who may enter into similar [FR Doc. 05–21226 Filed 10–19–05; 3:13 pm]
carrier) can effectively veto the carrier’s arrangements with multiple carriers. BILLING CODE 4910–13–M

proposed pilot assignments, where Although our rules do not forbid this
practice, each carrier must ensure in all
those pilots are otherwise qualified and DEPARTMENT OF TRANSPORTATION
of its leasing arrangements that there are
appropriately certificated and trained to
mechanisms in place to avoid confusion
conduct carrier flights. over who is using the aircraft and when. Federal Transit Administration
d. The following example would be Similarly, the carrier must have
considered a wet lease by the FAA. Preparation of Environmental Impact
procedures that ensure that the
Statement for the Downtown
Although the carrier is not formally crewmembers adhere to the instructions
Birmingham/University of Alabama
obligated to use the owner’s pilots, it is of the carrier, not the aircraft owner.
Birmingham Activity Centers (a.k.a. In-
clear from that business arrangement
E. Conclusion: Recommended Carrier town Transit Partnership Project)
between the carrier and the aircraft Review of Existing Leasing
owner that the aircraft owner’s pilots are AGENCY: Federal Transit Administration,
Arrangements
provided with the aircraft. Certain DOT.
aircraft leases contain penalty clauses The foregoing discussion is intended ACTION: Notice of Intent to prepare an
that provide that if the aircraft owner’s to provide the public, including air Alternatives Analysis (AA) and
pilots are not available to fly the aircraft carriers and aircraft owners, with a Environmental Impact Statement (EIS).
for the part 135 carrier, then the aircraft better understanding of the FAA’s
concerns about the key safety issues SUMMARY: The Federal Transit
owner must compensate the part 135
linked to operational control of flights Administration and the Regional
carrier for any costs the carrier incurs in
made under the authority of FAA Planning Commission of Greater
getting other pilots to fly the aircraft. certificates. The discussion is also Birmingham are conducting an
Because the parties contemplated that intended to encourage air carriers to alternatives analysis and preparing a
the owner would provide both the closely consider whether their business Draft Environmental Impact Statement
aircraft and crew, this too constitutes a arrangements comport with the (DEIS) for transit improvements in the
wet lease, even though the carrier requirements for maintaining Downtown Birmingham/University of
ultimately may use pilots who did not operational control. The FAA urges all Alabama Birmingham Activity Centers.
come from the aircraft owner. This type air carriers to review the leasing and The FTA is the lead federal agency and
of arrangement is contrary to the other arrangements they have with the DEIS will be prepared in accordance
provisions of section 119.53(b) of the aircraft owners to ensure compliance with National Environmental Policy Act
Federal Aviation Regulations. with the regulations. In this regard, the (NEPA) and the applicable regulations

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