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Wed, Feb 15, 2023

Settlement Resolving Charter Violations Reached

Indiana Charter Outfit to Pay $187,500 Civil Penalty

On 08 February 2023, United States Attorney for the Southern District of Indiana Zachary A. Myers announced that Indy Jet Management, LLC and associated parties: Gary Aletto; GSA Investment, Inc.; AirXL, LLC; Excel 2, LLC; Excel 3, LLC; Excel 4, LLC; CJI, LLC; Indy Bravo, LLC; Bradley Cable; and Citation Management, LLC (“AirXL et al.”) had agreed to resolve allegations that they conducted illegal charter flights.

The settlement addresses allegations set forth by the FAA that Indy Jet Management, between March 2017 and February 2018, operated approximately 168 paid passenger-carrying flights in violation of Federal Aviation Administration (FAA) regulations.

The FAA recognizes two types of aircraft leases: wet leases, in which a charter concern provides an aircraft and crew, and dry leases, in which an aviation leasing company leases only an aircraft, and the lessee is responsible for obtaining its own pilots and services. The FAA requires entities seeking to contemporaneously provide aircraft, crew, fuel, and services to their customers via wet leases to obtain FAA Part 135 air carrier certification.

The strict provisions of Part 135 oblige certificate holders to maintain highly regimented and closely regulated operational and maintenance standards, to include the compilation of a master operations manual detailing pilot qualification and training, applicable insurance coverages, approved aircraft documentation and manuals, and rigorous record-keeping protocols.

The FAA alleges Indy Jet Management and its associated entities sold customers charter jet services under sham dry leases with one company purporting to lease aircraft without pilots, fuel, or services provided. Customers then simultaneously entered into contracts for pilot services with another Indy Jet Management-related company. Collectively, the contracts served as a package-deal providing piloted charter jet services while evading the requirements of Part 135. The FAA further alleged that the parties used unqualified pilots who did not complete the training, testing, and competency checks specified in Part 135.243, 135.245, 135.293, 135.297, 135.299, and 135.99C.

Under the terms of the settlement agreement, AirXL et al. agreed to forfeit its illegal business model and pay a $187,500 civil penalty.

U.S. Attorney Myers thanked Assistant United States Attorney Rachana Fischer, who represented the United States in this case.

It should be noted that the claims resolved by the aforementioned settlement are allegations only; determinations of guilt and/or liability have been neither made nor implied.

FMI: www.faa.gov

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