Air charter brokers play an important role in private aviation by connecting charter customers with properly authorized air carriers. Although brokers generally do not operate the aircraft, their advertising, contracts, disclosures, and business practices are regulated by the U.S. Department of Transportation (“DOT”).
The primary federal regulation governing these activities is 14 C.F.R. Part 295. Part 295 authorizes air charter brokers to arrange certain charter flights while establishing consumer-protection requirements intended to ensure that customers understand who is arranging the flight, who will operate it, and which party will exercise operational control.
What Is an Air Charter Broker?
Part 295 defines an “air charter broker” as a person or business that, as an indirect air carrier, foreign indirect air carrier, or bona fide agent, holds out, sells, or arranges single-entity charter air transportation using a direct air carrier.
A broker may act in different legal capacities:
- As an indirect air carrier and principal;
- As an agent of the charter customer; or
- As an agent of the direct air carrier operating the flight.
The capacity in which the broker is acting is important because it affects the broker’s contractual obligations and required disclosures. A broker acting as a principal contracts with the customer in its own name and separately contracts with a direct air carrier to perform the transportation. By contrast, a bona fide agent acts on behalf of a charterer or direct air carrier that has expressly authorized the agency relationship.
Part 295 applies to single-entity charter air transportation. Generally, a single-entity charter involves the charter of the aircraft’s entire capacity, with the charter cost borne by the charterer rather than separately by individual passengers. Selling transportation by the seat can implicate other regulatory frameworks, including DOT’s public-charter regulations under Part 380.
Must an Air Charter Broker Register with DOT?
No. A business operating solely as a Part 295 air charter broker is not required to register with the DOT Office of Aviation Analysis, submit an OST registration form, or obtain an individual DOT license.
When adopting Part 295, DOT expressly declined to create a registry for either U.S. or foreign air charter brokers. Instead, 14 C.F.R. § 295.10 grants qualifying air charter brokers economic authority through a regulatory exemption. That authority remains available only while the broker complies with Part 295.
This should not be confused with Part 298. Direct air carriers operating as air taxi operators generally must register with DOT under 14 C.F.R. § 298.21. The air carrier’s registration requirement does not create a corresponding registration requirement for a Part 295 broker.
Required Advertising Disclosures
Under 14 C.F.R. § 295.23, all solicitation materials and advertisements published by or on behalf of an air charter broker—including its website—must clearly and conspicuously state:
- That the business is an air charter broker;
- That it is not a direct air carrier or direct foreign air carrier exercising operational control over aircraft; and
- That the advertised air service will be provided by a properly licensed direct air carrier or direct foreign air carrier.
A broker must therefore avoid advertising or branding that could cause a customer to believe the broker owns the aircraft, operates the aircraft, employs the flight crew, or exercises operational control over the flight.
A broker may display its name or logo on an aircraft, but the direct air carrier’s name must also be prominently and clearly displayed, and the overall presentation must not mislead customers about which company is operating the flight.
Disclosures Required Before Contracting
Part 295 does not treat all disclosures the same. Some information must be disclosed automatically, while other information must be disclosed only if the charterer requests it.
Before entering into a contract for a specific flight or series of flights, the broker must disclose:
- Identity of the operating carrier. The corporate name of the direct air carrier or direct foreign air carrier that will be in operational control of the aircraft, together with any other names under which that carrier holds itself out to the public.
- The broker’s legal capacity. The broker must disclose whether it is acting as an indirect air carrier and principal, an indirect foreign air carrier, an agent of the charterer, or an agent of the direct air carrier.
- Broker liability insurance. The broker must disclose whether it maintains liability insurance covering the charterer, passengers, or property on the charter flight and, if it does, the monetary limits of that coverage.
These disclosures may be transmitted electronically. As a practical matter, brokers should include them in their charter agreements, booking confirmations, or separate disclosure forms so that the parties have a reliable record of what was disclosed.
Disclosures Required Upon Request
Before contracting, the broker must also provide the following information if the charterer requests it:
- Certain broker-carrier relationships. If the broker is acting as the charterer’s agent, it must disclose any corporate or business relationship—including a preexisting contract—with the proposed direct carrier that may have influenced the broker’s selection of that carrier.
- Total cost of the transportation. The broker must disclose the total amount paid by the charterer to or through the broker, including broker-imposed or carrier-imposed fees and government-imposed taxes and fees. Part 295 does not require each individual fee, tax, or cost to be separately itemized.
- Third-party charges. The broker must disclose any fees that the charterer will pay directly to third parties, including known fuel, landing, parking, or hangar charges. If the precise amount is unknown, the broker must provide a good-faith estimate.
A well-drafted charter agreement can provide all six categories of information automatically, even though Part 295 requires some of them only upon request. Doing so may reduce uncertainty and help establish that the broker gave the customer complete and accurate information.
What If the Information Is Unknown or Changes?
Sometimes the operating carrier or other required information is not known when the customer signs the contract. Part 295 permits the broker to provide the information later, but it must be disclosed within a reasonable time after it becomes available.
The disclosure must be made early enough to allow the charterer to make an informed decision about whether to accept the information or the change. In every case, all information that must be disclosed—or that the customer requested—must be provided before the transportation begins.
If the broker fails to provide the information within a reasonable time, the charterer must be given an opportunity to cancel and receive a full refund. Similar requirements apply when information changes after the transportation has begun, although the refund right then applies to the unperformed portion of the transportation and related services.
Brokers Must Use Properly Authorized Air Carriers
Under 14 C.F.R. § 295.20, a broker may arrange transportation only with a direct air carrier that possesses:
- The required DOT economic authority;
- Appropriate FAA safety authority; and
- Any applicable foreign authority.
The direct carrier must also be authorized to perform the particular transportation being sold. A broker cannot avoid responsibility by merely accepting a carrier’s general representation that it is authorized. The broker should conduct appropriate due diligence and obtain documentation confirming the carrier’s economic and safety authority.
Binding Carrier Commitments
A broker must not represent that a specific carrier, aircraft, flight, or departure time has been arranged unless the broker has obtained a binding commitment from the direct air carrier.
This is particularly important when issuing quotes or booking confirmations. A broker may describe a proposed aircraft or itinerary as subject to carrier availability, but it cannot represent that a specific arrangement is confirmed when no binding carrier commitment exists.
Prohibited Unfair or Deceptive Practices
Part 295 prohibits unfair or deceptive practices and specifically identifies several types of prohibited conduct. Among other things, a broker must not misrepresent:
- That it is a direct air carrier;
- The type or quality of aircraft or service;
- Departure or arrival times, routes, stops, or total travel time;
- The qualifications or certifications of pilots, aircraft, or carriers;
- The safety record of a pilot, aircraft, or carrier;
- The existence or scope of insurance coverage;
- Fares, fees, or other charges;
- Membership in or approval by an auditing or safety organization; or
- The requirements a customer must satisfy to qualify for a charter flight.
A broker also must not sell transportation when it knows or has reason to believe that the direct carrier cannot legally perform the flight.
Refund Requirements
Under 14 C.F.R. § 295.26, brokers must promptly refund amounts paid for charter transportation when the transportation cannot be performed or when a refund is otherwise due.
Refunds for cash or check purchases must be issued within 20 days after the broker receives a complete refund request. Credit-card refunds are governed by the applicable federal credit-card refund requirements.
A broker’s contract should clearly address cancellations, substitutions, delays, force-majeure events, and other circumstances affecting refunds. Those contractual provisions must remain consistent with Part 295 and cannot eliminate refund rights provided by federal law.
Recordkeeping and Compliance Practices
Part 295 does not currently prescribe a specific period for retaining contracts, disclosures, invoices, carrier commitments, or other transaction records. Nevertheless, maintaining complete records is an important compliance practice.
A broker should retain documentation showing:
- What was advertised or represented to the charterer;
- Which disclosures were provided and when;
- The capacity in which the broker acted;
- The operating carrier’s authority;
- The existence of a binding carrier commitment;
- Amounts charged or collected;
- Changes communicated to the charterer; and
- Refunds, cancellations, or customer complaints.
These records can be critical if a customer later disputes what was disclosed or if DOT investigates the transaction.
Consequences of Noncompliance
Violations of Part 295 constitute unfair or deceptive practices or unfair methods of competition under 49 U.S.C. § 41712. Depending upon the circumstances, a violation may result in:
- A DOT enforcement proceeding;
- Civil penalties;
- A court action to compel compliance;
- Suspension or revocation of the broker’s Part 295 exemption authority; or
- In the case of a willful violation, potential criminal penalties.
Part 295 compliance should therefore be incorporated into the broker’s advertising, sales procedures, customer contracts, carrier agreements, employee training, and recordkeeping practices.
How Dunaway Law Group Helps Air Charter Brokers
Dunaway Law Group assists air charter brokers with establishing and maintaining legally compliant operations. Our services include:
- Drafting customer-facing charter agreements;
- Drafting agreements between brokers and Part 135 air carriers;
- Preparing Part 295 disclosure forms and booking confirmations;
- Developing cancellation and refund provisions;
- Reviewing proposed business models for compliance with Parts 295, 298, and 380;
- Verifying that agreements properly allocate operational control; and
- Developing internal compliance procedures and employee training materials.
Part 295 does not require air charter brokers to register with DOT, but it does impose significant requirements concerning advertising, disclosures, authorized carriers, customer communications, and business practices. A carefully structured compliance system can protect both the broker and its customers while reducing the risk of costly disputes or regulatory enforcement.
To discuss establishing or reviewing an air charter brokerage, contact Dunaway Law Group at 480-702-1608 or send us a message through our website. We’ll help ensure you stay compliant, competitive, and trusted in the fast-growing charter market. Call us at 480-702-1608 or message us HERE.