DB Air, Inc.

Order 04-02-21
OST-04-16943 - Violations of 49 USC 41101 and 41712

Issued and Served February 23, 2004

Consent Order

As of August 1, 2003, DB Air possessed two aircraft that it leased from Seven Two Capital Partners, LLC, the sole owner of which, David Bernstein, is also one of the two owners of DB Air. These two aircraft were in turn, sub‑leased to Miami Air International, Inc. (Miami Air), an air carrier that holds economic authority from the Department pursuant to 49 U.S.C. § 41101 and safety certification from the Federal Aviation Administration under 14 CFR Part 121. Miami Air in turn serviced the corporate charters that were arranged exclusively by DB Air on its aircraft. Under the companies' arrangement, DB Air paid all of the expenses incurred by Miami Air in placing the aircraft on Miami Air's Part 121 Operations Specifications. Furthermore, DB Air paid all of the expenses incurred by Miami Air in operating the aircraft, such as the loading and unloading fees, power carts, air startups, pushback fees, ramp charges, landing fees, all baggage fees, all taxes relating to operation of the aircraft, passenger facility charges, and all security fees. Under the arrangement, the aircraft were maintained for the exclusive use of DB Air and Miami Air was forbidden from using DB Air's aircraft without DB Air's permission.

We are particularly concerned about DB Air's operations because its scheme bypassed the protections put in place by the Department to afford the public a measure of financial protection where charter flights are involved. With respect to single-entity charters using large aircraft, Department rules require a direct air carrier that engages in charter air transportation to maintain a bond, in an unlimited amount, to guarantee performance of all charter flights for which it has contracted, or to maintain an escrow account into which it must deposit immediately all payments received for charter flights until after the flight has been operated. DB Air, however, entered into contracts for charter air transportation worth millions of dollars and as a principal it received payments for charter trips, none of which money was escrowed by DB Air or protected by a bond under Department rules while in DB Air's possession. Not only were DB Air's operations unlawful, but its conduct posed an unacceptable risk to the public's funds that 49 U.S.C. § 41101 and Department regulations, where followed, are designed to minimize.

DB Air, Ltd., is assessed $100,000 in compromise of civil penalties that might otherwise be assessed for the violations described in ordering paragraphs 2, 3, and 4, above. Of the assessed penalty, $50,000 is due and payable within 30 days of the date of the issuance of this order.

By: Rosalind Knapp