Violation of FAR 135.25(b) Requires Actual Operation While Air Carrier Did Not Have Exclusive Use Of At Least One Aircraft

In a recent civil penalty action, the FAA administrator actually reversed an administrative law judge's ("ALJ") assessment of civil penalty finding that the FAA had failed to prove its case. In The Matter of Helicopter Flite, Inc. the FAA alleged that an FAR Part 135 air carrier failed to have exclusive use of the only aircraft that it was authorized to operate under its operations specifications in violation of FAR 135.25(b) ("Each certificate holder must have the exclusive use of at least one aircraft that meets the requirements for at least one kind of operation authorized in the certificate holder's operations specifications."). The FAA issued an order assessing an $11,000.00 civil penalty against the air carrier. The air carrier appealed the order and requested a hearing before an ALJ. After a hearing, the ALJ held that the FAA proved by a preponderance of the evidence that for a period of at least seven months the air carrier lacked exclusive use and possession of the only aircraft listed in its operations specifications in violation of FAR 135.25(b). He then assessed the full $11,000.00 civil penalty against the air carrier. Not surprisingly, the air carrier appealed the decision to the FAA administrator. Initially, the Administrator agreed that the FAA did prove that the air carrier did not have exclusive use of the only aircraft listed on its operations specifications for approximately seven months. However, the Administrator went on to state that "it makes no sense to enforce this requirement by imposing a civil penalty unless there is evidence that the certificate holder continued to operate during the time period that it did not have exclusive use of at least one aircraft." The Administrator reasoned that FAR 135.25(b) must have an implicit operation requirement, otherwise the FAA could assess a civil penalty if an air carrier's exclusive use aircraft was destroyed by fire or natural disaster. Similarly, if the air carrier wanted to sell its exclusive use aircraft, it would have to sell the aircraft and simultaneously purchase another aircraft to avoid being in violation of Section 135.25(b). As a result, the Administrator concluded "[s]imply not having an exclusive use aircraft will not be considered as constituting a violation of Section 135.25(b), warranting the assessment of a civil penalty, absent evidence of operation under Part 135." Turning to the facts of the case, the Administrator observed that the FAA did not introduce any evidence at the hearing to show that the air carrier operated any aircraft while it did not have exclusive use of the only aircraft listed on its operations specifications. Consequently, the Administrator reversed the ALJ, finding that a civil penalty was not warranted in the case. The Administrator's legal analysis and reasoning in this case make sense. And, it is nice to now have some legal precedent for how FAR 135.25(b) should be interpreted and applied. This would be a good case for the Administrator to distribute to its aviation safety inspectors. But if that doesn't happen, at least this case is available to air carriers and their aviation attorneys should the need ever arise.

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