CJI Americas 2020: ‘New entrants present greater opportunity for illegal charter’

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First-time clients entering business aviation as a result of Covid-19 could create more opportunities for illegally chartered flights to operate, agreed CJI Americas’ panel of grey charter experts.

The near-destruction of commercial airline schedules and travellers’ fears about the risk of Covid-19 infection in airport terminal and on airliners, are forcing some wealthy individuals to consider private aviation for the first time. A side effect of this, according to the panellists, is the significant number of clients in the charter market with little or no idea about what is legal and what isn’t.

Currently there is about a 90/10 split between leisure and business travel in the US charter industry, said National Air Transport Association (NATA) Vice President, Ryan Waguespack, including a lot of new entrants.

However, Waguespack doesn’t think the full surge is in motion yet. “Now, it’s mainly leisure, getting people from point A to point B. When business returns [there will some operations with multiple flights in one day from a variety of airports] – that’s why we can’t let off the gas of getting out there and educating.”

David Norton, head of aviation practice and partner, Shackleford, Bowen, McKinley and Norton, said he is seeing the problem of illegal charter from two sides. Economic pressure due to the pandemic has meant some clients are in need of cash flow, and want to utilise an expensive asset sitting in the hangar, said Norton. They hear about dry leasing and wonder if it’s a possibility — it’s usually illegal.

On the other side, Norton said: “There’s definitely an uptick in people looking for alternative means of travel. When they do, nine out of 10 times, all they care about is they want to find an airplane and they’ll sign any paperwork you put in front of them.”

David Hernandez, shareholder and co-chairman of the business aviation practice group, Vedder Price, told delegates he has seen what he calls “informal illegal charter” and it’s widespread.

[It is] Where friends are allowing friends to operate their aircraft and pay direct operating costs plus a little extra. I mean they know [its a grey area], they just ask me if it’s okay and I say no you can’t do that. Then I never hear from them again.”

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