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aircraft for profit (such as, for example, a jet owned by an
individual and used only by that individual and family) would
obtain a certificate under FAA rule 91, and a scheduled airline
would obtain a certificate under FAA rule 121.
The FAA requirements to maintain a rule 135 certificate are
more onerous than the FAA requirements for aircraft that are not
chartered to the general public. For example, the FAA requires
pilots to be trained to certain standards and also requires
higher maintenance standards than those specified for jets not
operated with a rule 135 certificate. The FAA also requires both
a maintenance manual and an operations manual to maintain a rule
135 certificate, and Federal excise tax must be charged on all
flights. Mr. Rabinowitz estimated that it cost approximately
several hundred thousand dollars per year to maintain a rule 135
certificate pursuant to the FAA standards, absent the excise tax.
Marketing of the Jet Charter Activity
Petitioners marketed their jet charter activity in several
ways. Mr. Rabinowitz understood from the industry that the most
likely charter customers were individuals or companies that
themselves owned private aircraft but whose jets were unavailable
to them for various reasons. Therefore, Mr. Rabinowitz contacted
other aircraft owners to inform them that he had the Falcon and a
rule 135 certificate, and that he would like their business. Mr.
Rabinowitz also asked the chief pilot to solicit business by
contacting other flight departments and pitching BHJ when he was
not flying the Falcon. Mr. Rabinowitz paid the chief pilot a
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Last modified: May 25, 2011