• Uber For The Flying Public?

    From Larry Dighera@21:1/5 to All on Wed Feb 26 12:29:04 2020

    Surf Air Acquires BlackBird
    Kate O'ConnorFebruary 25, 20200

    Image: Surf Air
    California-based Surf Air has acquired BlackBird, an “online aviation marketplace” that pairs passengers with private aircraft owners and
    charter operators via mobile app. The companies will form the new Surf
    Air Mobility Corporation, which will focus on 50- to 400-mile trips as
    an “alternative to commercial airlines and driving on short routes.”
    As part of the acquisition, BlackBird founder and CEO Rudd Davis has
    been named chief operating officer of Surf Air Mobility Corp.

    “Similar to the way that three-sided marketplaces have transformed the
    home and ride-sharing economies, Blackbird has unlocked the potential
    of general aviation with a simple consumer experience and by tapping
    into an existing underutilized asset base to create affordable
    on-demand flying,” said Surf Air CEO Sudhin Shahani. “Combining this
    with our scheduled membership platform will bring increased value and
    options to both of our customer bases and current and future operating partners.”

    Surf Air offers flights to its members via a network of Part 135
    operators. As previously reported by AVweb, the FAA sent a letter
    (PDF: https://www.faa.gov/about/initiatives/safe_charter_operations/media/Blackbird_Letter.pdf
    ) to BlackBird in December 2019 stating that its operations would be
    subject to Part 119 certification. According to BlackBird, all of its
    flights are now also conducted by Part 135 operators.


    U.S. Department of Transportation
    Federal Aviation Administration
    Office of the Chief Counsel
    Enforcement Division

    December 17, 2019
    Via Electronic Mail
    Roy Goldberg, Esq.
    1775 Pennsylvania Avenue N.W.
    Suite 800
    Washington, D.C. 20006

    Re: Your client, BlackBird Air

    Dear Mr. Goldberg:

    800 Independence Ave., SW.
    Washington, DC 20591

    We have considered the June 10, 2019 letter from BlackBird Air, Inc. (BlackBird), that set out many aspects of its business model and
    operating assumptions. The information that BlackBird has presented
    leads us to conclude that the pilots participating in BlackBird's
    platform and using its app are holding out and thus are engaged in
    common carriage. This conclusion does not apply to individual
    commercial pilots who are legally operating the flights for operators authorized to conduct operations under 14 C.F.R. part 135, or pilots
    who are legally operating under 14 C.F.R. §91.501.1

    In arriving at this conclusion, we considered BlackBird's position
    articulated in its June 10th letter. BlackBird stated that, "[u]nlike
    air carriers, BlackBird is not building an operation based on crews,
    aircraft, or routes. BlackBird is building an infrastructure that
    supports all of general aviation, which includes air carriers and
    operators."2 · BlackBird manages two databases: one for aircraft
    available for lease and a second one for commercial pilots ( described
    as "independent person[ s] with a specific skill set (pilot))."

    BlackBird uses the databases as part of a marketplace service that
    serves as an aggregator of information and connects third-party
    service providers (the pilots) with users seeking to charter an
    aircraft or purchase a ticket on a direct air carrier.

    BlackBird asserts, "the ultimate business goal is to create an online
    platform that surfaces the many options available to users; [and] NOT
    to provide air transportation."

    1 The exceptions from certification provided under 14 C.F.R. §91.501
    only apply to large airplanes of U.S. registry, turbojet-powered
    multiengine civil airplanes of U.S. registry, and fractional ownership
    program aircraft of U.S.

    registry that are operating under subpart K of part 91 in operations
    not involving common carriage. Most of the aircraft offered on
    BlackBird's app appear to be outside of those requirements.

    2 The FAA notes that, although not defmed in regulation, the term
    "general aviation" is commonly understood not to
    include air carriers or commercial operators engaged in scheduled air
    services or non-scheduled air transport
    operations for hire.

    BlackBird states it is a facilitator, in that it supports users with
    the process of(1) leasing an aircraft and (2) separately hiring a
    commercial pilot to fly the aircraft the user has leased.
    BlackBird states that it does not own, manage, or maintain the
    aircraft and does not employ pilots. BlackBird also states that,
    through the application, the user, not BlackBird, (1) selects and
    leases the aircraft and (2) chooses and hires the pilot. BlackBird
    asserts that operational control ofthe aircraft remains with the user
    at all times. BlackBird represents that it only facilitates the
    agreements, processes payments, and provides customer support to all
    three parties (user, i.e., person leasing the aircraft and hiring the
    pilot; pilot; and aircraft lessee).

    As a general rule, a party must obtain a part 119 certificate to
    engage in the transportation of passengers or property for
    compensation or hire.^ This applies to operations involving both noncommon/private carriage and common carriage. As BlackBird noted in
    its letter, to determine whether common carriage is present, the FAA
    assesses whether there is: (1) a holding out of a willingness to (2)
    transport persons or property (3) fiom place to place (4) for
    compensation."^ The courts have determined that these criteria are
    consistent with common law precepts and are appropriate within the
    aviation context.^

    We have little trouble concluding that the pilots listed on
    BlackBird’s pilot database selected by the user are transporting
    persons or property, from place to place, for compensation. Despite
    BlackBird’s assertion that the pilots are not transporting persons or
    property, it is clear that they are being hired for that very purpose.
    In addition, as BlackBird concedes, the pilots are being compensated
    for the flight service (whether the money comes directly from the
    lessee or through the BlackBird platform). That leaves only the issue
    ofholding out.

    With respect to whether the pilots are holding out, we believe the
    BlackBird database establishes that element. “Holding out” is a common
    law concept that the FAA has applied to aviation in a fimctionalist,
    pragmatic maimer. Holding out can be accomplished by any means that communicates to the public that a transportation service is
    indiscriminately available to the members ofthe segment ofthe public
    it is designed to attract. There is no specific rule or criteria
    as to how holding out is achieved. Holding out is determined on a
    case-by-case basis by assessing the specific facts ofthe situation.
    Advertising in any form raises the question of holding out.®
    “Holding out” can be done in many ways, including signs and
    advertising; the actions of agents,

    agencies, or sales people who may procure passenger traffic; and
    individual ticketing on known common carriers. In addition the
    expression to all customers with whom contact is made that the
    operator can and will perform the requested service is sufficient to
    conclude that a person is holding out.

    To date, the FAA has issued two legal interpretations in which the
    agency concluded thatpilots using companies with a web-based presence,
    similar to BlackBird, were common carriers.

    Legal Interpretation to MacPherson, dated August 13,2014, and Legal Interpretation to Winton ^ 14 C.F.R. 119.1(e) identifies certain
    operations not subject to certification. '‘FAA AC 120-12A.
    ^ See Woolsev v. National Transportation Safety Board. 993 F.2d 516
    (5* Cir. 1993).

    ® Legal Interpretation to Yodice (April 7, 1978); AC 120-12A.
    Aviation Law Firm, dated August 14, 2014. The legal interpretations
    discussed the expense sharing provision of 14 C.F.R. § 61.113(c) and
    addressed whether specific circumstances cause a pilot to become a
    common carrier.
    In the Legal Interpretation to MacPherson, the FAA concluded that the
    use of a website by pilots constituted common carriage because by
    posting specific flights to the AirPooler website, a pilot
    participating in the AirPooler service held out as willing to
    transport persons or property from place to place for compensation or
    hire. The FAA stated that, although the pilots chose the destinations,
    the pilots were holding out because they were willing to transport
    passengers for compensation. In the Legal Interpretation to Winton
    Aviation Law Firm, the FAA assessed a scenario in which a website
    called FlyteNow connected pilots and “general aviation enthusiasts”
    who paid a share ofthe flight expenses in exchange for travel on a
    route predetermined by the pilot. Only FlyteNow members could search
    for flights on the website, but anyone could become a member by
    filling out an online form. If a pilot carried one or more passengers,
    FlyteNow facilitated the sharing of expenses on a pro rata basis
    between the passenger(s) and the pilot. The FAA issued a legal
    interpretation to FlyteNow referring Mr. Winton to the Legal
    Interpretation to Ms. MacPherson for answers to the questions
    presented in his request, as it involved a similar web-based
    expense-sharing seheme.

    FlyteNow petitioned the United States Court of Appeals for the
    District ofColumbia Circuit for review ofthe FAA’s interpretation that thepilots would be considered common carriers, which meant that the
    pilots would be required to hold at least commereial pilot licenses
    and hold certificates issued under 14 C.F.R. part 119. In 2015, the
    court decided the case FlyteNow. Inc. V. Federal Aviation
    Administration.^ and the court upheld the FAA’s conclusion that the
    pilots’ partieipation on Flytenow.com would amoimt to holding out an
    offer oftransportation to the public. The court stated that the FAA
    uses “holding ouf’ as that concept is defined through common law and
    applies it in a functionalist and pragmatic manner. The court
    explained that, while Flytenow.com is a flight-sharing website limited
    to its members, membership requires nothing more than signing up to
    the website and any prospective passenger searching for flights
    could readily arrange for travel via the website. Furthermore, the
    court stated that there is no conclusive proofthat a pilot is not a
    common carrier based on the absence ofrate schedules or pilots
    occasionally refusing service. The court distinguished FlyteNow’s
    facts from other internet-based communications, such as emails among
    friends, which the court stated would not likely be deemed as holding
    out.® The court upheld the FAA’s determination that the pilots were
    holding out via the website, expense-sharing was a form of
    compensation, and all four elements of common carriage were met.
    Because these were common carriage operations, the pilots were
    required to hold a part 119 certificate to engage in them.
    The BlackBird platform is similar to the websites considered by the
    court in the FlyteNow case.® BlackBird stated in its June 10, 2019
    letter that its pilots are commercial pilots operating under
    part 91 or part 135. However, as previously stated, unless a specifie
    exception applies that allows * 808 F.3d 882 (Dec. 18,2015), rehearing
    en banc denied Feb. 24,2016.
    ® Part ofthe FlyteNow and Airpooler issues focused on the pilot
    databases involving private pilots and compliance
    with § 61.113. BlackBird’s pilot database only includes pilots holding commercial or airline transport pilot certificates.
    an operation for compensation or hire to occur in the absence of an
    operating certificate, certification under part 119 is required. Thus,
    if a pilot conducts an operation under only part 91 that is subject to
    the requirements of part 119, the pilot would be in violation of 14
    § 61.13 3 in that the person acting as pilot in command of an aircraft
    carrying persons or property for compensation or hire must be
    qualified in accordance with part 61 and must comply with the
    applicable parts of 14 C.F.R. that apply to the operation.
    The Black:Bird platform, like the FlyteNow website, is available to
    everyone. Anyone can readily search the BlackBird platform and boo.k a
    flight, and the pilots on BlackBird's website are available and
    willing to transport passengers who solicit pilot services through the platform.

    Much like the pilots participating on FlyteNow.com, commercial pilots
    utilizing the Black:Bird application express their willingness to
    transport people by posting their availability to conduct flights to
    the BlackBird platform. Although some exceptions from the part 119 certification requirement exist for certain, discrete types of
    operations, no exception applies in this case. A pilot's participation
    in the Black:Bird platform amounts to holding out a willingness to
    transport persons from place to place for compensation and requires certification under part 119 prior to conducting the operation.
    In sum, the FAA has concluded that pilots' use of the Black:Bird
    platform constitutes "holding out" and participating pilots are
    engaged in common carriage. Because these operations are
    subject to part 119 certification, a pilot who holds an airline
    transport pilot or commercial pilot certificate must obtain and hold a certificate issued under part 135 or the pilot must be employed
    by a company operating the flight that is certificated under part 119. Accordingly, please expect further investigative activity into
    BlackBird's operations, particularly regarding its pilot database. In
    addition, we would be interested in learning of any action you
    intend to take in view of the jeopardy facing pilots who participate
    in BlackBird' s service.

    Please let me know if you would like to present any additional
    information in response to this correspondence.

    Naomi Tsuda
    Assistant Chief Counsel for Enforcement
    Federal Aviation Administration


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