RE: Docket Number DOT-OST ; RIN: 2105-AD66 Notice of proposed rulemaking, Enhanced Consumer Protections for Charter Air Transportation

Transcription

1 November 26, 2013 U.S. Department of Transportation Docket Management Facility West Building Ground Floor, Room W New Jersey Avenue, SE Washington, D.C RE: Docket Number DOT-OST ; RIN: 2105-AD66 Notice of proposed rulemaking, Enhanced Consumer Protections for Charter Air Transportation Sentient Jet, LLC. is the largest independent jet card company in the world; known for service excellence, product sensibility, and a superior approach to safety standards. We invented the private jet card business model ( Sentient Jet Card ) nearly 15 years ago and, along with the major fractional organizations, have evolved into an industry leading position with over 4,000 active Jet Card holders. The majority of our customers come through referrals due to our customer-centric emphasis. Sentient Jet Card s clientele are predominately businesses or high-net worth individuals who have a contractual relationship with the company to act as their agent for arranging transportation services. Customers seek to work with us because of our rigorous standards by which we select operators and aircraft participating in our program. As of this writing Sentient only works with the top 20% of Part 135 operators in the industry. The Sentient Jet Card, like fractional ownership programs, has a pre-negotiated and legally binding contract known as Terms and Conditions between the charterer and the company to set all operating rules and client expectations before any financial commitment is made. As outlined in the Terms and Conditions and acting as agent for the charterer, Sentient Jet Card arranges card member trips on a very select network of prescreened Direct Air Carriers in predefined categories or groupings of like aircraft defined as Light Jets, Mid Jets, Super Mid Jets and Heavy Jets. Sentient Jet has been an industry leader in jet card innovation and safety, from its Independent Safety Board with former key FAA and NTSB members to our involvement as a founding member of the Air Charter Safety Foundation ( ACSF ) and participation with the NATA Safety and Security Committee. Overall, and as outlined in our various answers below, we are in full support of many of the items/issues that have been raised and plan to cooperate with all governing bodies overseeing this regulation. DOT Question 1: Should DOT require confirmation that the Charterer received disclosure statements and, if so, what type of confirmation would be appropriate in any given situation, including oral contracts. (Please comment on both the Initial Disclosure as well as subsequent Disclosure Statements resulting from changes to the trip). It is Sentient Jet LLC s position that no confirmation be required for notifications of subsequent disclosure statements resulting from changes to the Charterer s trip. Due to the inherent nature of the air charter industry where itinerary changes can occur constantly, even right up to departure time, confirmation from the Charterer of notifications back to Sentient is many times simply Sentient Jet, LLC Comments to DOT-OST P a g e 1 26 November 2013

2 impracticable, if not impossible (e.g., Charterer has turned off their mobile phone in preparation for flight; lost cellular signal, etc.). All disclosures, including notifications, made by the Air Charter Broker to the Charterer should be governed by the Terms and Conditions in the contract between the Charterer and the Air Charter Broker. DOT Question 2: What, if any, Unfair and Deceptive Practices should be enumerated in the final rule. Sentient Jet LLC is of the opinion that areas regarding a company s collateral and advertising should be subject to rules prohibiting certain practices that are deemed unfair and deceptive. Such practices include Air Charter Brokers making statements in their advertising such as: our fleet, our flight crews, our Chief Pilot or the use of any word taken in the possessive tense that could be interpreted by the general public leading them to believe the Air Charter Broker is a certificated Direct Air Carrier. Furthermore, all flights are not created equal; some brokers make tactical implications in their collateral that they utilize a comprehensive safety program or they maintain protective levels of liability insurance on behalf of their clients, when in fact they do not which is clearly deceptive. DOT Question 3: Should the definition of Single Entity Charter be revised to allow individuals to self-aggregate to form a single entity, despite the fact that they may be bearing only a portion of the cost of the charter? Sentient Jet, LLC is not categorically in opposition to the revision which would permit the inclusion of self-aggregation under Single Entity Charters but raises the immediate concern that selfaggregation itself should be clearly defined with explicit boundaries as to what would and would not be permissible. Most importantly, it is Sentient Jet, LLC s opinion that self-aggregation should not permit companies whose business in whole or in part involves the formation of groups simply to fit the definition of Single Entity Charter thus allowing for potential instances of singleseat marketing and sales scenarios. DOT Question 4: Should DOT require Air Charter Brokers to Register? Sentient Jet, LLC agrees with the DOT s position that accurate, timely, and clearly presented information is essential so that consumers can make informed decisions about their flight choices. Furthermore, Sentient has long assimilated the Enforcement Office s suggestion that all of a company s advertisements, website and consumer-facing collateral should convey the fact that the Air Charter Broker is not a direct air carrier and that the air service advertised will be provided by a properly licensed direct air carrier. In short, the public deserves the right to gain access to accurate and verifiable information regarding the entity with which they are conducting business to ensure the decisions they make are sound and valid. To that end Sentient feels, in the best interest of the consumer, self-identification should be considered inadequate and an Air Charter Broker registry should indeed be instituted. Moreover, such a registry should be applicable to domestic as well as non-u.s. citizens and entities, and should also start to include domestic Air Freight Forwarders. Sentient Jet, LLC Comments to DOT-OST P a g e 2 26 November 2013

3 Lastly, said registry, in the best interest of the consumer, should be readily accessible to the general public for viewing and contain specific company information that the consumer can use for their own purposes of due diligence such as corporate ownership, names of key management team members, and the company s physical address. With regard to the DOT s request for comment regarding the costs to the government in order to administer the above-mentioned alternative, i.e., create a registry, Sentient feels that a fee, borne by the Air Charter Broker, be determined and be commensurate with the cost of implementing and maintaining the registry itself. DOT Question 5: Should DOT adopt a registration system applicable only to non-u.s. citizen Air Charter Brokers similar to that in place for foreign air freight forwarders, so that the Department can ensure that a grant of such authority to non-u.s. citizens is in the public interest, including consideration of whether there is effective reciprocity in the treatment of U.S. Air Charter Brokers in other countries? See Response to Question 4. DOT Question 6: DOT is requesting comment on whether there is additional information that should be provided to Charterers that is not in the NPRM or whether any of the aforementioned information is not essential and need not be provided Charterers. Sentient Jet, LLC beleives the DOT should register and regulate Air Charter Broker activities and require disclosures. However, any regulation needs to also allow for the alternate solution of the Charterer and the Air Charter Broker entering into a legally binding Terms and Conditions contract that clearly defines what will be initially disclosed, subsequent disclosures and any pertinent timelines. This gives the Charterer the best ability to negotiate specific terms while still offering superior consumer protection and allows for the Air Charter Broker to offer customized clientcentric programs. Sentient Jet, LLC feels that the following information is non-essential and need not be provided to the Charterer, and for various reasons including that such knowledge is either un-actionable, of little to no value to the consumer, or is already disclosed to the client prior to the fact within its Terms and Conditions with the Charterer: Name of aircraft owner The name of the Direct Air Carrier unless the Charterer requests it Specific make and model Total Cost (offer estimated cost until after the flight, defined process in pricing model) List of all direct air carrier doing-business-as names (some direct air carriers maintain a large number of d/b/a s which can be quite confusing to the consumer) DOT Question 7: DOT is proposing the requirement to disclose the total cost in writing prior to purchase would be considered met so long as the Air Charter Broker conspicuously identifies and discloses the existence of all items that may impact the total cost, including the range of fees associated for each Sentient Jet, LLC Comments to DOT-OST P a g e 3 26 November 2013

4 item, as well as any factors which would cause the fees to be in the high or low range. The fare advertising requirements in 14 CFR would not apply. DOT is requesting for comment on this approach. Sentient Jet, LLC does not agree with the use of the term Total Cost but does takes the stance that a transparent pricing model should be spelled out in advance through legally binding and mutually agreed upon Terms and Conditions. This allows for the Charterer to agree to the pricing model for adjusting for actual flight times and additional fees after the flight lands, and thus eliminates any room for deceptive practices while protecting the Charterer. This meets the intent of the NPRM without impacting the economics of the entire industry. When addressing the total cost, there cannot be a one-size-fits-all regulation. The Sentient Jet, LLC Jet Card is a program in which the Charterer and Agent agree in a legally binding contract to a preset hourly rate and all additional fees and taxes in advance of any financial obligation by the Charterer. On a flight by flight basis the Charterer is quoted an estimated total price including: - Flight time - Taxi time - Fuel Surcharge - Taxes - Additional fees (i.e. catering, handling, landing, etc.) After the flight is completed the estimated total price is then adjusted either up or down for actual flight times and additional fees as agreed upon in advance by the Charterer in the Terms and Conditions. This pricing model logic takes into consideration everyday extenuating circumstances that can either increase or decrease the cost of operating an aircraft versus locking in a Total Cost in advance and creating undue financial risk to aircraft owners, Direct Air Carriers and the Air Charter Broker. DOT Question 8: DOT is proposing to subject Air Charter Brokers to 14 CFR Part 374, which implements statutes and regulations governing credit transactions, including those requiring credit card refunds within seven business days of receiving complete documentation. The Department s longstanding policy on cash refunds, which recently was codified with regard to scheduled airlines, requires cash refunds within 20 days of receipt of full documentation of such a request. Should the Department impose similar cash refund requirements in this rule for Air Charter Brokers? If not, what distinguishes the business of Air Charter Brokers that supports their not being required to comply with such refund requirements? While Sentient Jet, LLC agrees with the DOT that a regulation around a refund policy is necessary, we take the stance that 14 CFR part 374 does not fit all Direct Air Carrier, Fractional and Air Charter Broker business models. At Sentient Jet, LLC the Sentient Jet Card refund policy, payment method and timeline is spelled out clearly in a legally binding contract (Terms and Conditions) and agreed to by both parties in advance of the Charterer making any financial commitment thus offering the most consumer protection. Sentient Jet, LLC Comments to DOT-OST P a g e 4 26 November 2013

5 Comments on Disclosure Statements: Timeliness for issuing disclosures DOT should not define reasonable to a specific number or time frame and allow for the Charterer and the Air Charter Broker (Agent) to enter into a legally binding agreement (Terms and Conditions) that clearly defines what will be initially disclosed, subsequent disclosures and any pertinent timelines. This process of using legally binding and mutually agreed upon Terms and Conditions allows for Sentient Jet, LLC to pre-disclose many areas covered by the current NPRM well in advance of any financial commitment by the Charterer offering a greater level of consumer protection. For example, at Sentient Jet, LLC, as the Agent, we agree to in the Sentient Jet Card Terms and Conditions that the Charterers will receive a Tail Communication giving them all pertinent flight information commonly night prior but always well within the 10 hour window which is currently the industry standard. This allows the Charterer the ability to still cancel for any reason with full refund. Disclosure Statement Content: 1. The corporate name of the direct air carrier in operational control of the aircraft on which the air transportation is to be performed and any other names in which that direct air carrier holds itself out to the public. Allowing the Charterer to have the most flexibility while still being informed, Sentient Jet, LLC takes the stance that it should have the flexibility to inform its clients that they will be flying on one of the pre-approved Sentient Certified Direct Air Carriers and aircraft without having to specifically name the Direct Air Carriers. As the chosen Agent for The Charterer, Sentient Jet, LLC and all of its aviation professionals have been entrusted to and contracted by the client to pre-screen and certify a very select number of Direct Air Carriers. The Sentient Certification process is based on a predetermined set of criteria that the Charterer agrees to in advance of joining the program and is outlined in the mutually agreed upon Terms and Conditions. The Charterer has the ability during the initial sales cycle to review and discuss any Direct Air Carrier or specific aircraft make and model concerns in advance of any financial commitment. If the Charterer requests specific information regarding the Direct Air Carriers, Sentient will disclose that information as it becomes available as outlined in the pre-agreed upon Terms and Conditions. 2. The capacity in which the Air Charter Brokers is acting in contracting for the air transportation, i.e., as an indirect air carrier, as an agent of the Charterer, or as an agent of the direct air carrier that will be in operational control of the flight. Within the Terms and Conditions agreement Sentient Jet, LLC executes with each of its Cardholders (Charterer), a disclosure statement makes it clear that: The Sentient Jet Card Cardholder (i.e. Sentient Jet, LLC Comments to DOT-OST P a g e 5 26 November 2013

6 Charterer) hereby appoints Sentient as its authorized agent to arrange for air transportation services on behalf of Cardholder and Cardholder s guests. Sentient shall be the authorized agent for Cardholder and shall not be acting or deemed to be acting as a Direct Air Carrier. 3. The existence of any corporate or business relationship between the air charter broker and the direct air carrier that will be used for the air transportation. As outlined in the Sentient Jet, LLC Jet Card Terms and Conditions, Sentient acts solely as the Agent for the Charterer (Sentient Jet Card Cardholder) and shall arrange for and contract transportation with the Direct Air Carrier on the Cardholder s behalf. 4. The make and model of the aircraft to be used for the transportation (e.g., Learjet 60 XR). Allowing for maximum client flexibility around changing their schedule, Sentient Jet, LLC does not agree that the disclosure of a specific aircraft make and model offer any more consumer protection then a system of pre-agreed upon groups of aircraft by cabin class and/or mission capability. At the time the Charterer contractually signs on as a Sentient Jet, LLC Jet Card client they acknowledge that the Sentient Jet Card product groups similar jet types into sentient-designated size categories (i.e. Light, Mid, Super Mid and Heavy) as outlined in the Terms and Conditions. The aircraft are assigned to the Charterer s trip not by specific make/model/type but, rather, a Charterer has agreed in advance to any one of the various models within the requested size categories. Upon request by the Charterer during any stage in the trip process, Sentient Jet, LLC will disclose the make/model, tail number, crew member information, Direct Air Carrier information and insurance as it becomes available. While Sentient Jet, LLC does agree that the make and model should be disclosed before departure it should be done on the timeline outlined in the agreed upon Terms and Conditions with the Charterer. 5. The total cost of the air transportation paid to the air charter broker, including any air charter broker or carrier-imposed fees, or government-imposed taxes and fees. See response to DOT Question 7 above. 6. The existence of any fees and their amounts, if known, including fuel, landing fees, and aircraft parking or hangar fees, charged by third parties for which the Charterer will be responsible for paying directly. See response to DOT Question 7 above. 7. The existence or absence of liability insurance held by the air charter broker covering the Charterer and passengers and property on the charter flight, and the monetary limits of any such insurance Sentient Jet, LLC Comments to DOT-OST P a g e 6 26 November 2013

7 Sentient Jet, LLC supports that stance that all Air Charter Brokers should carry a reasonable level of non-owned aircraft liability insurance and disclose not only the Air Charter Brokers coverage but also the Direct Air Carriers coverage in advance of any financial transaction. Based on litigation and adjudication surrounding general aviation accidents in the past ten years, there is ample precedent to define reasonable levels of required Non-Owned Aircraft Liability insurance as $75 to $100 million dollars. Sentient Jet, LLC maintains and pre-disclose in our Jet Card Terms and Conditions to the Sentient Jet, LLC Jet Card Cardholder a $100 million Non-Owned Aircraft Liability insurance policy. We also disclose in our Terms and Conditions the level of liability insurance a Direct Air Carrier must maintain to meet the Sentient Certified Operator Network requirement. Sincerely, Andrew Collins President Sentient Jet, LLC Adam Hohulin VP, Operations Sentient Jet, LLC Charles Starkowsky Chief Safety Officer Sentient Jet, LLC Sentient Jet, LLC Comments to DOT-OST P a g e 7 26 November 2013