II. HISTORY

Historically, the maximum certificated takeoff weight (MCTW) of

an airplane determined both an airplane's categorization and operating

requirements. Beginning in 1953, airplanes with an MCTW of 12,500

pounds or less were defined as "small airplanes" and were permitted to

carry fewer than 10 passengers in on-demand air taxi service. The

rules under which those operations were conducted were eventually

codified as part 135. Airplanes with an MCTW of more than 12,500

pounds were defined as "large airplanes," and most large airplanes

carried 20 or more passengers in scheduled air transportation. The

Civil Aeronautics Board (CAB) used the large/small dividing line to

separate major airline companies, who were required to obtain a

Certificate of Public Convenience and Necessity (CPCN) from the CAB in

order to operate in interstate commerce as a common carrier, from on-

demand air taxi operators, who were exempted from obtaining a CPCN.

During this time, the CAB issued only a small number of CPCN's to

major, publicly-recognized companies, such as Eastern, American,

Delta, Pan Am, TWA, etc. In contrast, on-demand air taxi operators

numbered in the thousands. These operators were typically fixed-base,

usually at small airports, and owned fewer than five airplanes. They

provided on-demand air transportation as well as other services, such

as training new pilots and selling and renting small airplanes.

Typically, the air taxi portion of such an operator's business was a

small part of that business and rarely involved any scheduled

operations.

Beginning in the late 1960's, airplane manufacturers began to

design and build small airplanes, that is, less than 12,500 pounds

maximum certified takeoff weight, that were capable of carrying more

than 10 passengers, often close to 20. Some air taxi operators began

to offer services that resembled the services of the major airlines,

given the economic opportunity to operate under the less restrictive

requirements of part 135. Though these scheduled commuter operators

began to overtake some air taxi operations, they still remained a

small percent of the thousands of air taxi operators.

In 1978, as a result of the Airline Deregulation Act, the airline

industry was deregulated economically and air carriers were given more

freedom to enter and exit markets without prior government economic

approval. One of the most significant effects of this deregulation

was that it allowed major carriers to eliminate service to smaller

communities, where such service proved to be uneconomical for the

large aircraft the carriers operated. Major carriers were replaced in

those communities by the commuter carriers. Under this "hub and

spoke" system, the major part 121 air carriers provided service to the

large metropolitan airports, while the growing class of scheduled part

135 air carriers provided service between smaller communities as well

as feeder service from the smaller communities to the larger cities to

connect with the major carriers' operations. With these changes, the

traditional two categories of operations became three categories of

operations - scheduled commuter operations, traditional air taxis, and

traditional major air carriers.

Also in 1978, in response to the Airline Deregulation Act, the

FAA reissued part 135 standards to upgrade commuter and air taxi

safety requirements and make them more like part 121. At that time

part 135 certificate holders were required to meet more stringent

requirements in several areas, including weather reporting, flightcrew

training, maintenance, and qualifications for management personnel.

Since 1978, the FAA has issued a number of separate rule changes

to further align part 135 safety requirements with those in part 121.

Despite this realignment, differences between the regulations still

exist. The economic incentive to operate under part 135 still exists

because the requirements in part 135 are still less restrictive than

the part 121 requirements in many instances.

For the remainder of this document the following terms are used

in the following ways. "Commuter," "commuter airline," and "commuter

operator" mean those operators conducting scheduled passenger-carrying

operations under part 135 in airplanes with a passenger-seating

capacity of 30 or fewer seats. This current use of the word

"commuter" does not include scheduled passenger-carrying operations

conducted under part 121 in airplanes with a seating capacity of 31 to

60 seats. The term "commuter category airplane" used in this document

refers to airplanes type certificated in that category under part 23

in contrast to airplanes type certificated under part 25 which are

transport category airplanes. The term "nontransport category

airplanes" is used for commuter category airplanes and SFAR 41 and

predecessor normal category airplanes to be operated under part 121,

as well as for some older airplanes certificated before the

predecessors of part 25 (parts 04 and 4b of the Civil Air Regulations)

came into existence. The Department of Transportation (DOT) uses the

term "commuter" more broadly to include all scheduled passenger-

carrying operations conducted in airplanes with a passenger-seating

capacity of 20 to 60 seats. (Note: The High Density Rule, 14 CFR

part 93 uses "scheduled commuters" differently. Its meaning under

that part is not relevant to its use in this document.) The term

"regional," which is used by industry to refer to short-haul,

passenger-carrying, scheduled operations conducted under part 121 or

part 135, is not generally used by the FAA.