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On-Demand v. Scheduled

On-Demand v. Scheduled

FAR PART 135 TODAY COVERS primarily on-demand charter, while most (but not all) scheduled operations fall under Part 121. "On-demand" means that "the departure time, departure location, and arrival location are specifically negotiated with the customer." In the halcyon days before the Internet, no one seemed to have difficulty knowing the difference between "on-demand" and "scheduled" operations.

It is a brave new world. On the Web today you can find a strange array of services that give some, if not all, of the elements of a "schedule" for what should be on-demand flights. What is legal?

The most black and white of the gray areas is sale of "empty legs." Charter operators that know they have a long repositioning flight would like to have some portion of the flight earn revenue. As long as any one or more of the elements of a true charter flight - i.e. departure time, departure location and arrival location -- are negotiated with the customer, the flight is "on-demand."

But the FAA is wary of empty leg sales that only appear to be negotiated. For example, Jet Linx Aviation asked the FAA to review a proposed Web site that included empty legs. The FAA´s response to the operator was published as an interpretation last year:

"A scheduled operation is one where three elements are offered in advance by a certificate holder or its representative. To the extent that Jet Linx holds out these elements, even if the holding out is through different medium, i.e. two elements are published in electronic or pager form, and the third is communicated by telephone, we would find this to be scheduled service.

"To the extent that Jet Linx simply notifies the public that it has an aircraft in a particular city available for hire, we might consider this an on-demand operation. However, this departure window ranged from several days to as little as 36 minutes, i.e. an airplane is scheduled to travel from point A to point B and is available to depart between 1:24 p.m. and 2:00 p.m. The shorter the departure window or in this case availability window, the more it looks as though this is a scheduled operation. We view these proposed operations as scheduled operations and not authorized by your operations specifications.

"One example we found on your Web site was a light jet available in a small airport in Utah for a total of 30 minutes. Such a short window indicates that the aircraft must be en-route or in a certain location, once the window expires and therefore, the aircraft is not idle. In fact, to the extent that Jet Linx needs to move the aircraft to point B after the 30-minute window and to the extent Jet Linx verbally tells a client where the aircraft is traveling, we would consider such communication to be a holding out of the destination airport. Such a holding out, in addition to a holding out of the departure airport and a time by which an aircraft must depart, is a scheduled operation."

The FAA has not indicated how much more time than 36 minutes would be needed to make the agency comfortable that the posting of an empty leg is an offer to negotiate a charter flight and not the posting of a schedule.

While empty leg sales may seem to have relative black and white clarity, putting on-demand passengers together on the same flight is sublimely gray.

In the response to Jet Linx, the FAA discussed a proposal by the operator to offer the departure time, location and arrival location for "requested flights." The company´s position was that such flights were not the result of its own scheduling, but rather schedules selected by customers. Only if enough people wanted a particular flight, the company said, would it then honor the request of the group. The FAA did not accept this arrangement, either, stating:

"It appears you contemplate also publishing on your Web site at least some of the same elements described above so that clients can find flights that match their itinerary. To the extent Jet Linx intends to publish these three elements for ´Requested Flight Itineraries,´ we have concerns that such flights are scheduled and not on-demand flights. We would not see a problem with a Jet Linx operation that matches a client´s unconfirmed shared flight while not holding out the three elements."

The last sentence is intriguing. If a customer calls and requests a flight, and gets matched to another customer, without being told about the request of the other customer, perhaps customers can share flights without any schedule ever being offered.

But then again, maybe not. Within the last month, an FAA region looked at an operation that allowed passengers to share charter flights and found that pricing can steer passengers toward an otherwise unpublished schedule.

Here´s the FAA´s comment: "The crux of the Agency´s concern is the manner in which the negotiations, or ´offers,´ occur for the first customer and for all subsequent customers under your ´fractional charter´ system. Specifically, under this system each passenger is still guided by [the operator] toward a given departure time because of the significant price discrepancy between the initially quoted $ 3,500 charter price versus the subsequently offered $ 285 round trip price - at a time and price established when the first passenger agrees to conduct their ´charter´. . . ."

And yet, in the same letter, the FAA offered a ray of hope, stating,

"This is not to say that the ´fractional charter´ model is without all merit. In reviewing variants of this model, a key factor that the Agency will examine is the bargaining roles of the various parties. Should the initial passenger be primarily responsible for the initial purchase of all of the tickets, the ´fractional charter´ model may well pass scrutiny."

There is no doubt that increasing the efficiency of on-demand operators by reducing their empty legs benefits the industry without impeding safety. It is also true that finding a method to allow on-demand passengers to "share the ride" will benefit both customers and charter operators. The trick will be to find a method that preserves the distinctions between on-demand and scheduled operations. After all, if the airlines feel threatened by these new business models, they may bring even more political might to bear against business aviation.

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