DOT Proposes Rule to Require Air Charter Broker Disclosures

Press Release

The U.S. Department of Transportation (DOT) today proposed a rule that would require air charter brokers to disclose to their passengers information such as the name of the carrier operating their flights, the type of aircraft that would be used, and the total cost to the passenger.

"We believe that all consumers purchasing air transportation have a right to basic information about the flight they are taking, such as who is operating the flight and how much it will cost," said U.S. Transportation Secretary Anthony Foxx. "We will insist on transparency from air charter brokers, just as we do from major commercial airlines and public charter companies"

Air charter brokers are persons or companies who purchase the use of an aircraft operated by another company and make arrangements to carry customers. In today's marketplace, when arranging charter flights, most air charter brokers act as either an agent of the customer or as an agent of the company operating the aircraft. DOT's proposal would establish air charter brokers as a new class of "indirect" air carriers that provide air transportation to customers as principals in their own right.

If made final, the rule would require brokers to make a number of disclosures to passengers before selling them a charter flight. They would have to identify the name of the carrier and the type of aircraft providing the flight. They also would be required to disclose any corporate or business relationship between the broker and the carrier providing the flight, and whether the broker was acting on behalf of the consumer, the carrier or as a middleman. In addition, the broker would have to disclose the full price to be paid by the charterer for the transportation, including all taxes and fees, just as airlines must do. The broker also would be required to disclose whether it had liability insurance independent from the operator of the aircraft. The rule would also prohibit brokers from engaging in certain types of unfair and deceptive practices, such as advertising in a way that makes them appear to be the carrier on which a consumer is flying.

Similar rules regarding disclosure of information would also apply to small aircraft operators, known as air taxis, when they arrange to fly their passengers with other carriers due to lack of suitable aircraft or other reasons. This action is a response to a recommendation from the National Transportation Safety Board that DOT require air taxis to disclose information about the operator of the aircraft used for their flights, following the 2004 fatal crash of a charter flight in Montrose, Colo. that involved questions about the identity of the aircraft's operator.

Comments on the proposed rule are due (date). The proposed rule and public comments are available at www.regulations.gov, docket DOT-OST-2007-27057.

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