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Federal Economic Regulation

Generally, an air carrier, an air travel club, an airline corporation, a social club selling charter flights, a corporation that acts as an operator of charter flights, a corporation that acts as a study group chatterer, a corporation which sold affinity charter flights to individual members of the general public without complying with pertinent regulations, and a hotel operator selling package tours must obtain certification under the Federal Aviation Act, to carry out the air transportation[i].  Hence, to provide public air transportation services, a common carrier must obtain a certificate under the Act.

In addition, the following matters pertaining to air carriers are regulated by the Act:

  • the transportation of mail, records and reports;
  • the inspection of records and property by the secretary of transportation (secretary);
  • the airlift service;
  • the insurance and financial responsibility requirements of air carriers;
  • the unfair or deceptive practices, or unfair methods of competition, in air transportation or the sale thereof by an air carrier or a ticket agent;
  • the cooperative agreements between an air carrier or foreign air carrier and another air carrier, a foreign carrier, or another carrier;
  • the mutual aid agreements; and
  • the inquiries conducted by the secretary into air carrier management.


With regard to the certification for transportation, the application for certification must be submitted to the secretary in the form and must contain information as required by regulations issued by the secretary.  In addition, the application must be accompanied by proof of service on interested persons as required by regulations of the secretary[ii].

The certification issued by the secretary can be used to provide[iii]:

  • air transportation as an air carrier;
  • temporary air transportation as an air carrier for a limited period; and
  • charter air transportation as a charter air carrier.


However, the certificate must be issued only to those citizens who are fit, willing, and able to provide the transportation to be authorized by the certificate and to comply with statute and regulations of the secretary.  And, the certificate must be issued for transportation that is consistent with the public convenience and necessity[iv].

Further, the secretary is also authorized to require an air carrier or foreign air carrier[v]:

  • file annual, monthly, periodical, and special reports under oath with the secretary in the form and way prescribed by the secretary;
  • file with the secretary a copy of each agreement, arrangement, contract, or understanding between the carrier and another carrier or person related to transportation; and
  • provide specific answers to questions on which the secretary considers information to be necessary.


In addition to the above mentioned authorities, the secretary can:

  • prescribe the form of records to be kept by an air carrier, including records on the movement of traffic, receipts and expenditures of money, and the time period during which the records shall be kept[vi];
  • establish reasonable classifications for air carriers when required because of the nature of the transportation provided by them[vii]; and
  • establish reasonable requirements for each class in the interest of the public[viii].


However the secretary has no authority to prescribe terms for preventing an air carrier from adding or changing schedules, equipment, accommodations, and facilities for providing the authorized transportation to satisfy business development and public demand[ix].

[i] 49 USCS § 41101(a).

[ii] 49 USCS § 41108.

[iii] 49 USCS § 41102(a).

[iv] 49 USCS § 41102(b).

[v] 49 USCS § 41708(b).

[vi] 49 USCS § 41709.

[vii] 49 USCS § 41701.

[viii] Id.

[ix] 49 USCS § 41109.

Inside Federal Economic Regulation