DOT Fines Global Airline Services


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DOT Fines Global Airline Services

By Shane Nolan

June 3, 2011 - The U.S. Department of Transportation (DOT) fined Global Airline Services and its owner Harold J. Pareti a total of $120,000 for selling air transportation without DOT authority. 

The company has bid for and won contracts in its own right to provide charter flights to college sports teams, although it has no authority from DOT to sell air transportation in its own right. After winning a bid, it entered into separate contracts with direct air carriers to provide the charter air transportation.  

This violated DOT rules that require companies that sell air transportation to the public such as airlines and charter operators to obtain economic authority from the Department, which is separate from safety authority awarded by the Federal Aviation Administration. 

?When consumers buy air transportation, they have a right to know that the company selling the transportation is authorized to do so, and that the carrier operating the aircraft has been examined by DOT and has met appropriate fitness and safety requirements,? said U.S. Transportation Secretary Ray LaHood. ?Our licensing rules provide important protections for passengers, and we will continue to take enforcement action when they are violated.? 

The consent order also found that Global contracted with Capital Airways to provide transportation to college teams, even though Capital did not have authority to provide air transportation to the public. On Jan. 5, the Department fined Capital Airways $175,000 for operating without the required authority. 

Global is a Delaware corporation that specializes in arranging single-entity charter air transportation. It does not hold economic authority from the Department to engage directly or indirectly in air transportation.  

However, an investigation by the Department's Office of Aviation Enforcement and Proceedings (Enforcement Office) revealed that during 2010, Global engaged in unauthorized air transportation as an indirect air carrier.  Specifically, Global obtained a large portion of its business by bidding as a principal, acting in its own right, on solicitations from various charter customers, all of which were university athletic departments.

When Global won a bid, it would then sign what was usually styled as a "purchase order," provided by the university. Upon signing the order, Global then became contractually bound as a principal to provide charter air transportation to the university.'' 

Then, in order to fulfill its contractual obligation, Global would enter into separate agreements with direct air carriers, who would then become contractually responsible to Global, rather than to the university, for operating the charter flights. On all occasions relevant herein. Global was not authorized to act as an agent of the universities or the direct air carriers that provided the contracted service. Under these circumstances, Global unlawfully engaged in air transportation.

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