3/13/20

 

8900.1 CHG 697

VOLUME 2  AIR OPERATOR AND AIR AGENCY CERTIFICATION AND APPLICATION PROCESS

CHAPTER 2  GENERAL INFORMATION FOR AIR CARRIER CERTIFICATION AND FRACTIONAL OWNERSHIP APPLICATION

Section 2  Air Carrier Commercial Operator Certificate Determinations, Types of Certificates, and Applicable Rules

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2-126    PURPOSE. This section provides direction and guidance for the issuance of Air Carrier Certificates and Operating Certificates. Title 14 of the Code of Federal Regulations (14 CFR) part 119 consolidates the certification and operations specifications (OpSpecs) requirements for persons who operate in common carriage under 14 CFR parts 121 and 135. Title 14 CFR part 110 also contains definitions pertinent to operations that do not involve common carriage. The following paragraphs are intended to enhance an inspector’s understanding of the basis for issuance of a particular type of certificate (air carrier or operating) and the kinds of operations authorized under those certificates and Federal Aviation Administration (FAA)-issued operational authority (OpSpecs, Letter of Authorization (LOA)/Letter of Deviation Authority (LODA)).

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2-127    COMMON CARRIAGE VS. OPERATIONS NOT INVOLVING COMMON CARRIAGE. Relevant definitions discussed in this section are contained in 14 CFR parts 1 and 110. Applicability of and exceptions to part 119 common carriage operations are contained in part 119, § 119.1.

A.    Common Carriage. The first step in evaluating an application for the type of Air Operator Certificate (AOC) is determining whether an applicant will be engaged in common carriage. An applicant is engaged in common carriage if the applicant “holds out” to the public (by advertising or other means) to transport persons or property from place to place for compensation or hire, as explained in the current edition of Advisory Circular (AC) 120-12, Private Carriage Versus Common Carriage of Persons or Property. Common carriage operations are conducted under either part 121 or part 135, depending on the type of aircraft, seating configuration, and payload capacity.

B.    Common Carriage Not Involved. An applicant is not engaged in common carriage if they do not meet the above conditions of common carriage. There are different types of operations not involving common carriage that include the following: non-common carriage, private carriage, operations in which persons or cargo are transported without compensation or hire, and operations not involving the transportation of persons or cargo (part 110, § 110.2).

NOTE:  AC 120-12 provides additional guidelines for determining whether or not a transportation operation is common carriage. If the Safety Assurance (SA) office cannot clearly determine whether an operation is common carriage or does not involve common carriage, the facts of the situation should be presented to the appropriate SA division manager. The division manager/SA office shall coordinate the matter with both the Office of the Chief Counsel (AGC) and the Air Transportation Division or General Aviation and Commercial Division (as applicable) for an appropriate determination.

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1)    Non-common carriage involves the carriage of persons or property for compensation or hire, but there is no holding out. Non-common carriage operations require the issuance of an Operating Certificate. Operations are conducted under 14 CFR part 125 or part 135, depending on the type of aircraft, seating configuration, and payload capacity.
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2)    Private carriage involves the carriage of persons or property for compensation or hire with limitations on the number of contracts. The carriage of persons or property for compensation or hire under a contractual business arrangement between the operator and another person or organization, which did not result from the operator’s holding out or offering service, is considered to be private carriage (in this situation, the customer seeks an operator to perform the desired service and enters into an exclusive, mutual agreement, as opposed to the operator seeking customers). Private carriage operations require the issuance of an Operating Certificate. Operations are conducted under part 125 or part 135, depending on the type of aircraft, seating configuration, and payload capacity.
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3)    Section 110.2 defines a direct air carrier as a person who provides or offers to provide air transportation and who has control over the operational functions performed in providing that transportation. The FAA issues certificates to these direct air carriers. Title 49 of the United States Code (49 U.S.C.) expands the definition of an air carrier to include a person who acts “indirectly.” The FAA does not issue certificates to indirect air carriers. An indirect air carrier is a company that contracts aircraft and crew services from an air carrier or commercial operator, but may not engage in control over the operational function of any flight. Examples of indirect air carriers include freight forwarders, brokers, or public charter operators. An indirect air carrier will act as an agent for either the customer or the air carrier, and their advertising must make it clear that a certificated air carrier or commercial operator provides the transportation.
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4)    Operations in which persons or cargo are transported without compensation or hire are conducted under 14 CFR part 91 and do not require a certificate. Operations in which persons or cargo are transported without compensation or hire may be conducted under part 91 or part 125, depending on the type of aircraft, seating configuration, and payload capacity. Large aircraft operators under part 125 will be issued LODA A125 identifying relief from specified sections of part 125 (see Volume 2, Chapter 6, Section 3).
5)    Exceptions from the certification requirements of part 119 and the operating rules of parts 121 and 135 are summarized in the following paragraphs. Refer to the cited regulations for the complete regulatory content.
a)    Part 91 subpart F applies to large and turbine-powered, multiengine airplanes and fractional ownership program aircraft. Part 91, § 91.501 lists certain operations not involving common carriage that may be conducted under part 91 instead of part 121 or part 135. These operations involve the transportation of persons or property and may involve compensation. Section 91.501 sets conditions on the amount and types of compensation for some of these operations. Examples include:

    Ferry or training flights.

    Aerial work operations.

    Sales demonstration flights (limited compensation for expenses).

    Personal transportation for operator or guests (no charge, assessment, or fee).

    Carriage of officials, employees, guests, and property of a company on an airplane operated by that company, parent, or subsidiary (carriage is incidental to business and limited compensation for ownership, operating, and maintenance costs or no charge for guests when not within the scope of business of company).

    Time shares, interchange agreements, and joint ownership.

    Carriage of property (except mail) incidental to business (limited compensation for expenses).

    Carriage of group (with common purpose) when there is no charge, assessment, or fee.

    Carriage of persons for purpose of selling land, goods, or property when there is no charge, assessment, or fee.

    Fractional ownership.

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b)    Section 119.1(d) states that part 119 certification requirements do not apply to part 91 subpart K (part 91K) (when common carriage is not involved), nor operations conducted under 14 CFR part 129, 133, 137, or 139.
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c)    Section 119.1(e) lists operations that do not require an air carrier or commercial Operating Certificate. These include:

1.    Student instruction.

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2.    Nonstop commercial air tours conducted in compliance with an LOA issued under § 91.147 (see Volume 3, Chapter 18, Section 3, LOA A049).

3.    Ferry or training flights.

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4.    Aerial work operations, including:

    Crop dusting, seeding, spraying, and bird chasing.

    Banner towing.

    Aerial photography or survey (see subparagraph C below).

    Firefighting.

    Helicopter operations in construction or repair work (but part 119 does apply to transportation to and from the site of operations).

    Powerline or pipeline patrol.

5.    Sightseeing flights conducted in hot air balloons.

6.    Nonstop flights within 25 statute mile (sm) radius of the airport of takeoff for intentional parachute operations.

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7.    Limited helicopter flights within a 25 sm radius of the airport of takeoff.

8.    Part 133 (rotorcraft external load) or 14 CFR part 375 (certain foreign civil aircraft operations within the United States).

9.    Emergency mail service (49 U.S.C. § 41906).

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10.    Operations conducted under the provisions of § 91.321.

11.    Small Unmanned Aircraft System (UAS) operations conducted under part 107.

NOTE:  It is important for the operator to understand that these § 119.1(e) exceptions are mutually exclusive. This means that although a particular flight could satisfy the requirements of multiple exceptions, the operator must know in advance how the flight is being conducted so that the correct operating rules for the exception chosen are followed throughout the flight.

C.    Aerial Work Operations. While 14 CFR does not define “aerial work,” the FAA has consistently interpreted the term to mean work done from the air where:

    The aircraft must depart and arrive at the same point,

    No property of another may be carried on the aircraft, and

    Only persons essential to the operation may be carried on board.

1)    The FAA interprets § 119.1(e)(4) as containing only a partial list of the exceptions meeting the definition of aerial work operations. The FAA determines whether or not an operation fits within an aerial work exception on a case-by-case basis by looking at the totality of the facts in the light of operator intent and passenger expectation. The FAA does not permit an operator to use the aerial work exception if the underlying purpose of the flight is something other than aerial work. If the aviation safety inspector (ASI) cannot determine if the operation falls within the aerial work exception of part 119, consult the General Aviation and Commercial Division or the Air Transportation Division, Part 135 Air Carrier Operations Branch.
2)    What the FAA has always been concerned about are dual-purpose flights. In other words, in addition to the aerial work (work done from the air), the flight may involve another purpose, such as landing to drop off photographs (including digital) or the photographer at a TV station, or landing so that forestry workers can examine trees up close to determine where to continue the aerial survey. Therefore, generally, when an aerial work flight involves a landing at another point other than the departure point, the FAA believes there is another purpose other than the actual work from the air.
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3)    However, there is an exception to this general rule for landings. The FAA does allow interim stops for the limited purpose of meeting aircraft or human needs. Aerial work may involve work done over long distances, such as pipeline patrol or aerial surveying. Often, these distances require the pilot to land and refuel the aircraft and for the pilot and/or essential passengers to take a break to address human needs, including using the restroom and making overnight stops for meals and rest. It is important to understand, however, that the operator would be prohibited from dropping off passengers or property, picking up additional passengers or property, or conducting work such as pipeline inspection, photography, or filming while the aircraft is on the ground. Moreover, everyone and everything on the aircraft would have to return to the departure point using the same aircraft. Otherwise, the flight would have a dual purpose requiring, at a minimum, a Commercial Operating Certificate.
4)    The § 119.1(e)(4)(iii) exception for “aerial photography or survey” means the primary purpose of the flight is to conduct this work from the air and this work is for businesslike and work-related operations, such as news gathering, aerial mapping, aerial surveying, commercial photography, or commercial filming. When this work is the sole purpose of the flight, then the operator may operate under part 91 when:
a)    The operator’s employee performs the photographic or survey work;
b)    The operator hires a person to conduct the photographic or survey work; or
c)    The operator provides the aerial platform to enable an employee or person hired by the operator to conduct the photographic or survey work.
5)    An operator who is, or whose passengers are, taking photos or videos for the operator or passengers’ personal use, or for entertainment or leisure purposes, cannot use this § 119.1(e) exception to conduct air tour operations without complying with §§ 119.1(e)(2) and 91.147. In other words, if the primary purpose is sightseeing, then this “aerial photography and survey” exception does not apply.
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2-128    TYPES OF CERTIFICATES UNDER PART 119. There are two basic types of AOCs issued to U.S. applicants who will conduct operations in common carriage. See Table 2-4, Air Operator Certification, for a summary of certificate requirements.

A.    An Air Carrier Certificate. This certificate is issued to applicants who plan to conduct interstate, foreign, or overseas transportation, or to carry mail.

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B.    An Operating Certificate. This certificate is issued to:

1)    Applicants who plan to conduct intrastate common carriage operations; and
2)    Certain applicants who do not conduct common carriage operations (see paragraph 2-127 above and Table 2-4).

2-129    DETERMINING APPROPRIATE OPERATING RULE AND KIND OF OPERATION FOR PART 119.

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A.    Step One. Once the type of certificate required is determined, the next step is to determine the appropriate operating rule and kinds of operation. The two operating rules that are appropriate for air carriers and commercial operators engaged in common carriage are parts 121 and 135. An applicant will conduct operations under part 135, part 121, or both, depending on whether the operation is scheduled and the size and type of aircraft used. There are five kinds of operations: domestic, flag, and supplemental operations (these operations are conducted under part 121) and commuter and on-demand operations (these operations are conducted under part 135). To determine the appropriate operating rule and kind of operation, first determine if the applicant will conduct scheduled or nonscheduled operations.

1)    Scheduled operations include passenger operations in which the departure location and time and the arrival location are offered in advance by the operator. Scheduled operations can also carry cargo. However, an all-cargo operation is defined as nonscheduled.

NOTE:  Scheduled operations do not include public charter operations under 14 CFR part 380.

2)    Nonscheduled operations include:
a)    Passenger-carrying operations in which the departure time and the departure and arrival locations are specifically negotiated with the customer or the customer’s representative.
b)    All-cargo operations.
c)    Scheduled passenger operations in aircraft (other than turbojet-powered airplanes) that have nine or fewer passenger seats and a 7,500 lb payload or less that operate with a frequency of fewer than five round trips a week on at least one route between two or more points, according to a published flight schedule.
d)    Passenger operations conducted as a public charter under part 380.
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B.    Step Two. Once it is determined whether the operation is scheduled or nonscheduled, the next step is to determine the appropriate operating rule and kinds of operation. An operator can conduct operations under part 121, part 135, or both. However, the applicant will only be issued one certificate. The OpSpecs will detail the operating rules and kinds of operations. The definitions for kinds of operations are contained in § 110.2 and Volume 2, Chapter 2, Section 1, Paragraph 2-103, Definitions. Table 2-4 summarizes the appropriate operating rule and kinds of operation based on the aircraft type, size, seating configuration, and payload capacity, as well as the area of operations.

1)    Kinds of scheduled operations:
a)    Part 121 flag. An operator who has flag authority will also receive domestic and supplemental authority.
b)    Part 121 domestic. An operator who has domestic authority will also receive supplemental authority.
c)    Part 135 commuter. An operator who has commuter authority will also receive on-demand authority.
2)    Kinds of nonscheduled operations:
a)    Part 121 supplemental.
b)    Part 135 on-demand.

C.    Special Considerations for Aircraft With Modified Payload Capacities and/or Passenger Seat Configurations. There have been a number of instances where a Supplemental Type Certificate (STC) or other approved technical amendment to the type certification data results in a limitation or reduction of the maximum payload capacity for a particular make, model, and series (M/M/S) airplane. This reduction is achieved through a reduction of the maximum zero fuel weight (MZFW) or other means. One instance involves the Boeing Business Jet (BBJ), but other airplanes have also been modified.

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1)    Part 110 references passenger seat configuration and payload capacity to determine the kind of operation that the applicant is proposing. Part 119 specifies the kind of operation and which operating rule will apply to air carriers and commercial operators. In general, on-demand operation of airplanes having a passenger seat configuration of 30 seats or fewer, excluding each crewmember seat, and a payload capacity of 7,500 lb or less are conducted under part 135. Operations of multiengine airplanes with a passenger seat configuration of more than 30 seats or a payload capacity of more than 7,500 lb are conducted under part 121.
2)    Part 125 prescribes rules governing the operations of U.S.-registered airplanes that have a seating configuration of 20 or more passenger seats or a maximum payload capacity of 6,000 lb or more when common carriage is not involved.
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3)    Flight Standards Service (FS) policy requires that the passenger seat configuration and (maximum) payload capacity, as defined in parts 119, 121, 125, and 135, determine the applicable operating rule. If the passenger seating configuration or maximum payload capacity is modified, restricted, or limited through FAA-approved means (i.e., STC and Aircraft Flight Manual (AFM) revision), the amended passenger seat configuration and payload capacity can be used to determine the applicable operating rules.
4)    For example, a BBJ receives an FAA-approved reduction of the MZFW that results in a maximum payload capacity of 7,500 lb or less. This airplane also has a seating configuration of 30 or fewer passenger seats. Since it meets the applicability requirements of part 119, this airplane would be permitted to operate under part 135 instead of under part 121. The same logic would hold true if the payload capacity had been modified to 6,000 lb or less and a passenger seat configuration of 20 seats or fewer. In this instance, the airplane would be permitted certain operations under part 91 instead of under part 125.

Table 2-4.  Air Operator Certification.

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TYPE OF CERTIFICATE

SEATING CAPACITY/‌PAYLOAD CAPACITY

14 CFR OPERATING PART

KIND OF OPERATION

AIR CARRIER CERTIFICATE

§ 119.5(a)

Scheduled Operations (common carriage passenger operation; departure, location, and time and arrival location offered in advance by the operator).

Common Carriage (holding out to transport persons or property for compensation or hire):

   Interstate,

   Foreign,

   Overseas, or

   Carriage of mail.

   Turbojets.

   Multiengine airplanes with 10 or more passenger seats, OR more than a 7,500 lb payload capacity.

   Within or between the 48 contiguous U.S. states, entirely within a state, territory, or possession, or special authorizations.

121

Domestic

 

   Turbojets.

   Multiengine airplanes with 10 or more passenger seats, OR more than a 7,500 lb payload capacity.

   Entirely outside U.S., takeoff or landing outside the 48 contiguous states, or between Alaska, Hawaii, and U.S. territories.

121

Flag

 

Airplanes, other than turbojet‑powered airplanes, with nine or fewer passenger seats, excluding each crewmember seat, AND a 7,500 lb or less payload capacity, or any rotorcraft used in any scheduled operation with a frequency of operations of at least five round trips per week on at least one route between two or more points according to the published flight schedules.

135

Commuter

 

Airplanes, other than turbojets, with nine or fewer passenger seats AND a 7,500 lb or less payload capacity, or any rotorcraft used in scheduled passenger-carrying operations with a frequency less than five round trips per week on at least one route between two or more points according to the published flight schedules.

135

On-demand

AIR CARRIER CERTIFICATE

§ 119.5(a) (continued)

Nonscheduled operations (negotiated departure time, departure location, and arrival location; or all-cargo or 14 CFR part 380 public charter).

 

Passenger operations with multiengine airplanes with more than 30 passenger seats OR more than a 7,500 lb payload capacity.

NOTE: A multiengine airplane with 10 to 30 seats or a turbojet listed in OpSpecs for part 121 domestic or flag operations must be operated under part 121 supplemental for on‑demand operations.

121

Supplemental

 

Passenger operations with airplanes with 30 or fewer passenger seats AND a 7,500 lb or less payload capacity, or any rotorcraft.

NOTE: A multiengine airplane with 10 to 30 seats or a turbojet that is listed in OpSpecs for part 121 domestic or flag operations cannot be operated under part 135 on-demand rules, but that specific airplane must be operated under part 121 supplemental rules for nonscheduled operations.

135

On-demand

 

All-cargo operations with airplanes having a payload capacity of more than 7,500 lb.

121

Supplemental

 

All-cargo operations with airplanes having a payload capacity of 7,500 lb or less, or with rotorcraft.

135

On-demand

OPERATING CERTIFICATE

Scheduled operations (common carriage passenger operation, departure, location, and time and arrival location offered in advance by the operator).

Common Carriage in intrastate operations (publicly offering to transport persons or property for compensation or hire)

§ 119.5(b)

   Turbojets.

   Multiengine airplanes with 10 or more passenger seats, OR more than a 7,500 lb payload capacity.

   Within or between the 48 contiguous U.S. states, entirely within a state, territory, possession, or special authorizations.

121

Domestic

OPERATING CERTIFICATE (continued)

Airplanes with nine or fewer passenger seats AND a 7,500 lb or less payload capacity, or any rotorcraft.

135

Commuter

 

Nonscheduled operations (negotiated departure time, departure location, and arrival location; or all-cargo or part 380 public charter).

 

Multiengine airplanes with more than 30 passenger seats OR more than a 7,500 lb payload capacity.

NOTE: A multiengine airplane with 10 to 30 seats or a turbojet listed in OpSpecs for part 121 domestic or flag operations must be operated under part 121 supplemental for on‑demand operations.

121

Supplemental

 

Airplanes with 30 or fewer passenger seats AND a 7,500 lb or less payload capacity, or any rotorcraft.

NOTE: A multiengine airplane with 10 to 30 seats or a turbojet that is listed in OpSpecs for part 121 domestic or flag operations cannot be operated under part 135 on-demand rules, but that specific airplane must be operated under part 121 supplemental rules for nonscheduled operations.

135

On-demand

Operations not involving common carriage (non‑common carriage or private carriage; see part 119 definition).

Airplanes with 20 or more passenger seats and a 6,000 lb or more payload capacity.

125

N/A

 

Airplanes with less than 20 seats and less than a 6,000 lb payload capacity and any rotorcraft.

135

On-demand

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2-130    ECONOMIC AUTHORITY FOR PART 119 DEPARTMENT OF TRANSPORTATION (DOT) CERTIFICATES AND EXEMPTIONS. Section 119.5(i) requires anyone who wants to provide air transportation service as a direct air carrier to hold appropriate economic authority from the DOT. Economic authority types issued by the DOT to U.S. carriers include:

    Certificate for interstate or foreign passengers and/or cargo and mail authority,

    Authorization as a commuter air carrier, or

    Registration as an air taxi operator.

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NOTE:  Additionally, all applicants, regardless of economic authority type, must be a U.S. citizen as defined by 49 U.S.C. § 40102 and must obtain and maintain current aircraft accident liability insurance on file with the FAA in accordance with 14 CFR part 205. Economic authority is not required for commercial operators conducting intrastate transportation under part 121 or 135 or for operators conducting private or non-common carriage under part 125 or 135. The type of economic authority is generally based on whether the operation is scheduled or charter, passenger or cargo, and the aircraft seating and payload capacity. The steps required by the operator to obtain DOT economic authority are summarized in Table 2-5, DOT Definitions of and Actions to Obtain Economic Authority. It should be noted that the DOT definitions and terminology are not identical to those contained in part 110 and used for FAA certification.

A.    DOT Inquiries. In determining initial fitness and for a carrier to continue to hold its economic authority to provide air transportation services, the DOT will assess changes in ownership, management, financial condition, and operations that may affect an air carrier’s fitness. DOT staff, in support of fitness determinations, may occasionally query the responsible inspectors concerning accident, incident, and enforcement histories and qualifications of an applicant or applicant’s management personnel.

B.    Obtaining DOT Economic Authority. It is the sole responsibility of an applicant to obtain DOT economic authority. However, inspectors must not issue an FAA Air Carrier Certificate unless an applicant can show proof that appropriate DOT economic authority has been obtained. See Table 2-5.

1)    For a DOT Certificated Air Carrier, a Certificate of Public Convenience and Necessity is required.
2)    For a DOT Commuter Air Carrier, a Commuter Air Carrier Authorization is required.
3)    For a DOT Air Taxi, an Air Taxi Operator Registration (Office of the Secretary of Transportation (OST) Form 4507, Air Taxi Operator Registration and Amendments Under Part 298 of the Regulations of The Department of Transportation) is required.
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C.    Verification of DOT Certificates, Authorizations, Exemptions. DOT certificates, authorizations, or registrations are written evidence of official economic authority issued by the DOT. If an inspector is unsure of the type of operations authorized by the registration, certificate, or exemption evidence presented by an air carrier, the inspector should contact the DOT’s Air Carrier Fitness Division at 202-366-9721 to confirm the authority held. For more information about economic authority, consult the following websites.

1)    Certificated and Commuter Authority. For information about certificated and commuter air carrier fitness determinations and requirements and lists of current certificated and commuter air carriers, go to: https://www.transportation.gov/policy/aviation-policy/licensing/US-carriers.
2)    Air Taxi Operator Registration and Aircraft Accident Liability Insurance. For information about air taxi operator registration and amendments and aircraft accident liability insurance required for all air carriers for economic authority, go to: https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afx/afs/afs200/afs260/exemptions/.

D.    DOT Certificated Air Carrier. A DOT “Certificated” Air Carrier refers to those carriers obtaining a certificate of public convenience and necessity (CPCN) under 49 U.S.C. § 41102 to conduct interstate or foreign air transportation carrying passengers and/or cargo and mail. Applicants must be a U.S. citizen as defined by 49 U.S.C. § 40102 and found “fit, willing, and able” to conduct the operations before issuance of this certificate authority. The DOT’s final and effective orders provide evidence of this authority. Part 119 Air Carrier Certificate holders conducting domestic (§ 119.21(a)(1)) or flag (§ 119.21(a)(2)) passenger-carrying operations under part 121, and part 121 supplemental-only (§ 119.21(a)(3)) certificate holders operating large aircraft as defined by the DOT (i.e., originally designed to have a maximum passenger capacity of more than 60 passenger seats or a maximum payload capacity of more than 18,000 lb) must obtain certificated air carrier authority from the DOT.

E.    DOT Commuter Air Carrier. This DOT authorization is issued to air carriers that only utilize aircraft with 60 or fewer passenger seats or with a maximum payload capacity of 18,000 lb or less. This authorization could apply to part 135 commuter or part 121 domestic or flag operations. Per 14 CFR part 298 subpart E, an applicant seeking commuter air carrier economic authority must be a U.S. citizen, as defined in 49 U.S.C. § 40102, and found fit, willing, and able prior to being authorized to operate its scheduled service. Evidence of this authority consists of a commuter air carrier authorization with terms, conditions, and limitations. The DOT’s final and effective orders provide evidence of this authority. A commuter air carrier authorization also satisfies the economic authority requirements for charter operations, so a certificate holder that has a commuter air carrier authorization may also conduct charter operations without any additional economic authority required.

NOTE:  The DOT term “charter” includes on-demand (part 135) or supplemental (part 121) operations.

F.    DOT Air Taxi Operator. An air carrier that conducts operations in aircraft with 60 or fewer passenger seats and a maximum payload capacity of 18,000 lb or less; does not engage in scheduled passenger operations; and is not otherwise seeking economic authority as a certificated or commuter air carrier qualifies as an air taxi operator under part 298. To obtain economic authority as an air taxi operator, the applicant must be a U.S. citizen, as defined by 49 U.S.C. § 40102, and register as an air taxi operator according to the filing requirements of part 298 (OST Form 4507). The Air Transportation Division, Technical Programs Branch, processes all OST Form 4507 air taxi operator registrations and amendments. Evidence of air taxi economic authority is the approved OST Form 4507 air taxi operator registration (or most recent amendment). Every operator who plans to commence on-demand operations under part 135 and qualifies as an air taxi operator will register with the Technical Programs Branch no later than 30 days prior to commencement of such operations, per part 298, § 298.21. When the initial filing is made, the air taxi operator applicants must provide proof of aircraft accident liability insurance coverage in accordance with part 205 by filing OST Form 6410, U.S. Air Carriers Certificate of Insurance, along with its registration and filing fee for an initial registration. Whenever changes occur in the information reported on OST Form 4507 or 6410, such as the aircraft operated or insurance policy information, the operator must refile.

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NOTE:  An airplane for which the passenger seating configuration or maximum payload capacity is modified, restricted, or limited in order to operate under part 135 is subject to a DOT fitness determination if it was originally designed for more than 60 passenger seats or with a maximum payload capacity of more than 18,000 lb. OST Forms 4507 and 6410 are available at the Technical Programs Branch Part 205 Insurance and Part 298 Exemptions website: https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afx/afs/afs200/afs260/exemptions/.

G.    Aircraft Accident Liability Insurance. All U.S. Air Carrier Certificate holders must have, in effect, aircraft accident liability insurance coverage in accordance with part 205 to engage in air transportation. In order to obtain and maintain economic authority, each U.S. carrier must ensure that the evidence of aircraft accident liability insurance coverage is on file and correct at all times, according to the requirements of part 205, by filing OST Form 6410. The Technical Programs Branch processes and conducts verification of OST Form 6410 insurance filings. Part 205, § 205.4(b), states in part, “Aircraft shall not be listed in the carrier’s operations specifications with the FAA and shall not be operated unless liability insurance coverage is in force.” Inspectors are responsible for verifying that all aircraft have evidence of insurance on file with the Technical Programs Branch before adding any aircraft to the OpSpecs. The Web-based Operations Safety System (WebOPSS) offers several tools by which inspectors can verify aircraft insurance coverage, including the “Maintain Operator Data—Insurance” area of WebOPSS for a certificate holder and the standard Insurance Viewer report. Refer to the WebOPSS CHDO User Guide for instructions. Inspectors can also contact the Technical Programs Branch at AFS-260-Insurance@faa.gov with questions regarding an Air Carrier Certificate holder’s aircraft accident liability insurance status. For information about aircraft accident liability insurance certification filings, go to the Technical Programs Branch website at https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afx/afs/afs200/afs260/exemptions/.

H.    Exemption Authority. A certificate holder may request and the DOT may grant an exemption from the required economic authority. When requested the evidence of economic authority exemption should be provided to the SA office.

NOTE:  If an inspector is unsure of the type of operations authorized by the registration, certificate, or exemption evidence presented by an air carrier, the inspector should contact DOT’s Air Carrier Fitness Division at 202-366-9721 to confirm the authority held.

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Table 2-5.  DOT Definitions Of and Actions To Obtain Economic Authority

NOTE:  The chart below contains general guidelines. The DOT reviews each application separately and makes the economic authority determination. If the ASI has any questions on the appropriate economic authority, contact the DOT.

Table 2-5. DOT Definitions Of and Actions To Obtain Economic Authority

Air Taxi Operator

Basis of Economic Authority

Exemption from statute under 49 U.S.C. § 40109 governed by 14 CFR part 298.

Authorizing Document

Air Taxi Registration Form (OST Form 4507).

Analysis of Application

Verification of air taxi operator and aircraft registration (OST Form 4507) and insurance (OST Form 6410) for all aircraft on OpSpecs (delegated to the FAA Technical Programs Branch).

DOT Types of Operations

Charter Passenger

Charter Cargo

Charter Combination

Limited Scheduled Passenger

Limited Scheduled Cargo

Limited Scheduled Combination

FAA Kinds of Operations

On-demand (part 135)

Supplemental (part 121)

Operational Limitations

Scheduled operations limited to no more than 4 weekly round trip flights in a market.

Aircraft Limitations

Size limited to aircraft having 60 or fewer passenger seats or a maximum payload capacity of 18,000 lb. No limitation on quantity.

Conditions

Provided OST Form 4507 air taxi and Form 6410 insurance information on file with FAA remain current.

Commuter Air Carrier

Basis of Economic Authority

Exemption from statute under 49 U.S.C. § 40109 governed by 14 CFR part 298.

Authorizing Document

Commuter air carrier authorization from DOT.

Analysis of Application

Fitness evaluation by DOT.

DOT Types of Operations

Charter Passenger

Charter Cargo

Charter Combination

Scheduled Passenger

Scheduled Cargo

Scheduled Combination

FAA Kinds of Operations

Commuter (part 135)

Domestic/flag (part 121)

Operational Limitations

Depends on operating proposal and fitness evaluation.

Aircraft Limitations

Size limited to aircraft having 60 or fewer passenger seats or a maximum payload capacity of 18,000 lb. No limitation on quantity.

Conditions

Provided at all times commuter air carrier authority with DOT and OST Form 6410 insurance on file with FAA remain current.

Certificated Air Carrier

Basis of Economic Authority

Statute 49 U.S.C. § 41102.

Authorizing Document

Certificate of public convenience and necessity.

Analysis of Application

Fitness evaluation by DOT.

Types of Operations

Charter Passenger

Charter Cargo

Charter Combination (passenger and cargo)

Scheduled Passenger

Scheduled Cargo

Scheduled Combination (passenger and cargo)

FAA Kinds of Operations

Domestic, flag, and/or supplemental (part 121).

Operational Limitations

Depends on operating proposal and fitness evaluation.

Aircraft Limitations

Limitations on size and quantity depend on fitness evaluation.

Conditions

Provided at all times certificated air carrier authority and OST Form 6410 insurance on file with FAA remain current.

Indicates new/changed information.

RESERVED. Paragraphs 2-131 through 2-150.