Christopher B. Stagg of Stagg & Associates, P.C. has authored an article that provides a general overview of the U.S. laws that relate to foreign air carriers who seek to offer air transportation services to or from the United States.

Here is the direct link to the article or, alternatively, the direct link to download the document in PDF.

Introduction to U.S. Aviation Law for Foreign Air Carriers

By Christopher B. Stagg

In the United States, federal law governs civil and commercial aviation to protect and regulate access to its airspace.  These laws include the powers to regulate economic, environmental, and safety matters.  The Federal Aviation Act and subsequent laws define the term “air transportation” broadly to encompass “interstate, overseas or foreign air transportation or the transportation of mail by aircraft.”

A foreign air carrier that seeks direct access to U.S. airspace confronts a number of stringent restrictions, including matters that involve strategic alliances between a foreign carrier and a U.S. air carrier.  In particular, foreign carriers must obtain air carrier operating authority by the U.S. Department of Transportation, and must comply with safety and other requirements by the Federal Aviation Administration.  It is possible in certain situations for a foreign air carrier to qualify for an exemption from these latter FAA requirements.

Some of the areas relating to the statutory or regulatory authority by the U.S. Department of Transportation and Federal Aviation Administration include:

• Air Carrier Certification – which includes the requirement for a foreign air carrier to obtain a certificate of public convenience and necessity from the U.S. Department of Transportation, as well as other applicable FAA certifications
• Anti-Competitive Practices – including the regulation of unfair or deceptive practices that involve matters addressing advertisements, competition and cooperative agreements
• Air Carrier Insurance – that establishes the standards for required minimum coverage for air carriers, as well as any possible bond requirements
• Air Carrier Records – which involves providing information as the Secretary of Transportation may require and allowing for any inspection of these records including any land or equipment

Similar to many countries, the U.S. imposes cabotage restrictions on foreign air carriers.  As such, foreign air carriers lack authorization to carry passengers or cargo only between U.S. destinations unless certain limited circumstances exist such as in the event of an emergency. The federal government imposes significant penalties for violations of these cabotage restrictions.  Even under the limited circumstances where an exemption authority exists, such authority is further limited to a short and fixed duration.

In addition to federal authorities, local authorities such as local port authorities may impose further restrictions on air carrier operations.  Foreign air carriers may also need to comply with certain rules and regulations by federal agencies and departments other than the U.S. Department of Transportation and Federal Aviation Administration.  Foreign air carriers must also simultaneously comply with their home country laws.

There are continuing developments, however, to allow foreign air carriers to operate in the U.S. as indirect air carriers, which would reduce the stringent rules and regulations associated with direct foreign air carriers.  Indirect foreign air carriers are still required to register with federal transportation authorities.  An indirect foreign air carrier is a person or entity that markets the air transportation services instead of the control aspects involved in operating the aircraft and airline. Cabotage restrictions do not apply to indirect foreign air carriers.

Among the number of international aviation conventions, the United States is a signatory to a number of conventions affecting liability for passengers and cargo (the Montreal Convention and Warsaw Convention), as well as conventions affecting air and property rights (the Chicago Convention, Cape Town Convention, Geneva Convention and Rome Convention).  U.S. federal, state, and local government authorities are required to act in accordance with these international conventions.

Foreign air carriers should also understand that other rules and regulations might apply to their operations by other government authorities, including:

• Animal, plant and health inspection service fees by the U.S. Department of Agriculture
• Security programs and passenger security fees by the Transportation Security Administration
• Customs bonds, immigration and user fees, visa waiver program, airport landing and overflight rights, and the Advance Passenger Information System by U.S. Customs & Border Protection
• Federal, state and local taxation issues involving foreign air carrier operations in the United States, such as excise tax

As this general overview demonstrates, there are many complex hurdles involved to lawfully providing air transportation services to or from the United States, and it is outside the scope of this article to provide an exhaustive discussion as to all of these matters.

For more information on foreign air carrier operation to or from the United States, or for other aviation regulatory or transactional matters, please contact Christopher B. Stagg directly at (212) 518-4854 or by e-mail at cbs@stagglaw.com.