A Record 75,000 Consumers Filed Complaints That Major Airlines Took Over DOT To Quash Competition

To the airline industry, safety is too important for political games playing. For nearly 100 years this was an inviolable norm. But it’s been broken. Airlines never used to argue that competitors were less safe, because shaking confidence in the safety of air travel without data to support it undermined confidence in the entire industry.

There’s no data to suggest that public charter operations like JSX’s are less safe, and the FAA did not seek to collect any, before American Airlines, the Air Line Pilots Association, and Southwest Airlines convinced them to consider banning the business model that allows carriers to operate planes with 30 or fewer seats from private terminals using recently-retired senior captains and co-pilots with fewer logged hours than required to fly for a major global airline.

The FAA’s docket on this issue has closed.

  • So far over 58,000 public comments have been posted to Regulations.gov. JSX says the number of submitted comments is 76,000 (there is a lag in posting comments to the web).
  • Already it’s the most comments ever received on a Department of Transportation or FAA proposed rule. Drones topped 50,000. Emotional support animals topped 15,000. Usually there are just a handful.
  • Over 99.8% of public comments oppose the FAA’s move to crack down on upstart air carriers, as advocated by American Airlines and Southwest.

You can tell that JSX is in a fight for its life because in their regulatory filing they do not pull any punches. They aren’t just offering an analysis of the FAA’s proposed rule. They are calling out the “shadowy origins of this rulemaking” as well as legally “impermissible bias” that major airline and union lobbying has created at FAA.

This rulemaking does not stem from any specifically identified safety problem about Part 135 operators of public charters. On the contrary, it is the product of a full-bore lobbying campaign of misinformation and innuendo by some of the most powerful, entrenched airline industry interests, including American Airlines, Inc. (“American”), Southwest Airlines Co. (“Southwest”), and the Air Line Pilots Association (“ALPA”)

They also point out that the FAA met with their opponents as it contemplated this action, that the agency’s own rules require them to provide equal access to both sides yet refused multiple requests to meet with JSX, and they call for a release of “[r]ecords of all meetings and communications between FAA/DOT officials and” airline and union lobbyists as it developed the plan.

There Are No Safety Concerns Justifying A Change In Longstanding Rules

American Airlines suggests that there are flights that shouldn’t operate because they aren’t safe, and they make this argument even when the alternative is non-flying transportation that’s even less safe. But American wanted to keep flying to Caracas, Venezuela until their own pilots started refusing the trips out of concern for their own safety. And American Airlines has partnered with BLADE helicopters, which they feel are safe enough. Even Travelers’ United, which wants to see the FAA take action, called out American’s hypocrisy in their comment submission.

JSX in its filing points out that the agency knows they don’t really have safety concerns over Part 135 scheduled charter operations, which is why three weeks after the notice of this proposed rulemaking was advanced they made a $20 million small community air service grant for public charter flights operated under Part 135, which they simultaneously propose to ban (“It is inconceivable that the DOT, the FAA’s parent agency, would have made the award if either agency had any legitimate safety concern with Part 135/Part 380 operations.”).

Three weeks after the FAA released its notice that it was considering ending a safe and successful part of the aviation industry, they released a notice for collecting data on the safety of these operation, underscoring that the proposed rulemaking was offered without first collecting information on the safety practices they proposed to change, and without justification for doing so. Oops. Indeed, the FAA has never issued safety alerts or recommendations to address deficiencies in this sector, and the NTSB has never expressed concerns or offered recommendations either.

JSX, for its part, doesn’t just point out that (1) existing rules have led to air travel just as safe as with Part 121 carriers and (2) that they exceed requirements in almost all dimensions, but that (3) they even pass IATA operational safety audits “that Part 121 airlines use to confirm the safety of their codeshare partner airlines” because JSX has codeshares. (They are part-owned by United and JetBlue.)

ALPA and the airlines who are piggy backing on their safety arguments say they want to promote ‘one level of safety’ but that is not true. They want to impose the same formulaic rules for all carriers rather than promoting safety.

  • A regional jet operating short flights doesn’t have the exact same requirements as a long haul flight with inflight rest requirements.
  • Imposing high costs and barriers to entry to becoming a pilot is why there’s a pilot shortage. And it means less air service, and many cities losing air service. That means more people drive (either to their destination or a farther away airport) and that is less safe. On net more people die in car accidents as a result.

In any reasonable observer’s view, ninety minute Embraer ERJ-145 trips, where 90% of pilots overnight at base and therefore don’t face the same fatigue issues as global airlines assigning multi-day long haul trips involving jet lag, don’t need the same rules they need to follow rules tailored to their form of flying in order to promote one level of actual safety.

This Merely Distracts The FAA From Addressing Real Safety Problems

There are real safety challenges for the FAA to address. More than ever we’ve seen issues coming to light about deficiencies at the FAA’s Air Traffic Organization, with 300 near-collisions in a year and there are a steady stream of issues continually being discovered with Boeing 737 MAX and 787 aircraft. JSX suggests FAA focus should be on these, rather than being distracted by efforts to cynically use safety as a vehicle for corporate self-interest.

FAA’s Proposed Rules Change Hurts Women And Minorities In Aviation

JSX is circumspect in how they note that the overwhelmingly white Air Line Pilots Association seeks to preserve and expand barriers to entry into the pilot profession – keeping cockpits white – and shut down an airline where “approximately 24% are persons of color (more than twice the industry average) and more than 27% are women (nearly six times the industry average).”

Barriers to entry to the pilot profession are lobbied for to promote higher earnings for incumbent (white male) pilots.

The Biden Administration Is Pro-Competition, Everywhere Except Here

The Department of Transportation has been aggressively fighting against airline concentration – beating the combination of American Airlines and JetBlue in court, pursuing a trial to block JetBlue from acquiring Spirit – yet is acquiescing to the anti-competitive demands of American Airlines and Southwest Airlines which dominate the Dallas market to shut down a small Dallas-based airline.

Does A “Loophole” Need To Be Closed?

Other arguments against JSX are that they operate using a ‘loophole’ allowing public charter operators to sell regularly scheduled service for which tickets are booked by the public on set and advertised schedules because the definition of “scheduled operation” does not include public charter operations.

However it’s not a loophole, it’s an explicit carve-out. As JSX points out, the current rules have been in place for more than a quarter of a century, that the FAA has known about and has explicitly stated is legal and permits unlimited flight operations. And it’s one that’s nurtured competitive, safe products that consumers value – which is the actual reason major incumbent airlines want it shut down.

I’d further note that Congress expressly recognized that public charter operators may offer regularly scheduled service in this manner.

In 49 USC 41104(1) they state, “regularly scheduled charter air transportation, for which the public is provided in advance a schedule containing the departure location, departure time, and arrival location of the flight…” There are legislative definitions of regularly scheduled public charter transportation separate from both traditional charter transportation and traditional common carriage passenger-carrying operation for compensation by a traditional air carrier under Part 121.

My Submission To The FAA

Economist Stephen Jonesyoung and I submitted a comment to the regulatory docket.

The FAA suggests that the growth of public charters justifies expanding the scope of some regulations that currently apply to only large commercial airlines but looking at the actual data it doesn’t appear there’s been an increase in public charter travel since deregulation! (Growth in this area is actually meant to be encouraged in any case.)

Public Charter Operations 1976 to Present Show # Of Carriers And Passengers Has Not Grown, And The Number Of Carriers Has Fallen

Years Operators Carriers Flights Passengers (in Millions) Data Source
1976–1998 300 100 N/A 4.5 1991 NPRM
2010 81 57 2,030 1.4 2010 Charter Report
2022 62 73 41,841 5 2022 Charter Report

Changing these rules wouldn’t create a discernable safety benefit, while there are real costs to small communities, to Indian tribes, and to the consumers who value these services who would effectively be put out of business. It’s also not clear that the FAA has the statutory authority to make the changes that they’re contemplating.

We can only conclude from this regulatory history that the FAA’s intent from the commuter rule was not to apply Part 121 rules to public charter operators, because the FAA identified the 1995 text as mistaken.

From the FAA’s description, it sounds like the FAA concluded that the safety issues present for commuter carriers were not similarly present for public charter carriers and/or that the FAA did not have the legal authority to alter the regulations to public charters under the proposed rule. We elaborate on why the FAA may not have had the legal authority to do so…

49 USC 41104 seems to limit FAA’s authority to issue regulations on public air charters. It states,

The Secretary of Transportation may prescribe a regulation or issue an order restricting the marketability, flexibility, accessibility, or variety of charter air transportation provided under a certificate issued under section 41102 of this title only to the extent required by the public interest. A regulation prescribed or order issued under this subsection may not be more restrictive than a regulation related to charter air transportation that was in effect on October 1, 1978.

Since proposed regulations would limits the “marketability, flexibility, accessibility or variety of charter air transportation” in a manner that is more restrictive than regulation on charter transportation on October 1, 1978, the FAA seems to be prohibited from issuing this regulation. Congress created the law which led to current regulations under which JSX operates, and the DOT in doing incumbent interests’ dirty work would be acting against current law.

We also go into extensive detail on several ways in which the Department of Transportation has failed to comply with Executive Orders, from procedures for rules with significant economic impact, to those which will have detrimental impact on Native American communities (through loss of air service).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Every governmental regulatory body will eventually be captured by those it is supposed to regulate, and its regulations will inevitably turn to protecting incumbent market participants rather than fulfill it’s intended purposed. A free and unregulated market operates as a far better regulator than government bureaucrats.

  2. @Mak it seems to me that there are structural benefits to broad jurisdictional mandates (e.g., FTC) rather than narrow ones (FAA, FCC, etc.) because it’s less advantageous overall to invest in capturing the agency when any given agency action is less likely to impact your specific industry. By way of illustration, telcos may face certain regulatory actions by the FTC, but they’re much less likely to invest in capturing the FTC vs. the FCC, where a very high proportion of actions will directly impact them. The drawback is, of course, agency specialization and expertise, but there are ways to mitigate some of the downside here; and IMHO the resiliency to this kind of industry capture is worth the trade-off on specialization.

  3. You wrote “the Biden administration is pro competition everywhere except here”. I’m sorry but I just don’t see it. They are consistently anti competition in nearly everything they do.

  4. This is not about existing entrenched competitors having an advantage with the FAA, it’s about the Biden Administration’s weaponization of every aspect of the Federal Bureaucracy. The FAA doesn’t really have any reason to bias their rule-making in favor of American or Southwest, but add in the fact that JSX is Non-Union, and they’re like a raging pit bull out to destroy them. Literally everything done by the Biden NLRB is patently illegal and exceedingly biased toward unions, this is no different. The fact that they refused to include JSX input (as required by law) in the deliberation is a strong clue.

  5. thank you for staying on this issue, Gary.
    I suggest you submit an article to The Wall Street Journal and other business related publications on the issue.
    the comments above are relevant.
    The US pilot rules as they exist today are not solely about safety but about protecting a privileged class of employees through unionization.
    The people that argue about why these rules are necessary for safety can’t seem to be able to argue how other countries with well-develop aviation safety regulations and cultures manage to operate just as safely as the US with less onerous entry regulations for new pilots.

    The big airlines really would love to see these regulations relaxed and know there is no justification for the current rules but they aren’t willing to tick off their pilots

  6. Truly amusing to see tim talk about this issue
    When Jsx comes to Atlanta. We all know he’ll sing a different tune

  7. To be clear
    The issue over Jsx isn’t about their business product or pilot rules. Many people agree the pilot rules should be changed.

    It’s about whether the silly FAA rules apply to everyone flying scheduled service or whether the FAA wants to be toothless in enforcement and allow fake shell companies to render their congressional mandates useless

  8. @MaxPower – “It’s about whether the silly FAA rules apply to everyone flying scheduled service or whether the FAA wants to be toothless in enforcement”

    False, the FAA enforces the rules. The rules, consistent with current law, are intended to create carriers operating under public charter rules differently.

  9. JSX Is a Great Carrier Service and the Majors Know this , that’s why the Unions are having a field day, I believe that if JSX stays strong and wing this through our company will prevail..

  10. thank you, Gary.
    Of course it is MAXmouth that is babbling incoherently.
    The goal should be to create a single standard for safety but not to use false and unfounded data and assumptions to create economic hardships that harm and inhibit competition no matter where in the US aviation takes place.

  11. I don’t understand why if the law says they have to have JSX input, and they refuse to do that, why someone isn’t indicted for breaking the law? Or sued for breaking the law??? Why are laws not enforced any more when the lawbreakers are at the highest levels???

  12. You were doing well until you felt the need to bring race and gender into it. This issue has zero to do with it. You really think the objective is racial or misogynist? No, it’s obviously all about money and power, as are most issues today. Now I have to seriously question the validity of your other points if you need to resort to such emotional and red herring arguments.

  13. How do you justify describing docket comments as “consumer complaints” in the title of your predictably poorly written article?

Comments are closed.