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Legislators warned that 'grey market' poses serious risk
Four senior aviation figures - Marwan Khalek of Gama Aviation, Aoife O'Sullivan of aviation law firm Gates and Partners, David Macdonald of Air Partner and Anne Seckington of the UK BBGA - have formed a panel to tackle the controversial subject of illegal operations and how serious the grey market has become.

Four senior aviation figures - Marwan Khalek of Gama Aviation, Aoife O'Sullivan of aviation law firm Gates and Partners, David Macdonald of Air Partner and Anne Seckington of the UK BBGA - have formed a panel to tackle the controversial subject of illegal operations and how serious the grey market has become.

The panel points out that any operator of aircraft offered for public transport must possess an AOC, and be approved by the relevant aviation authority to carry paying passengers.

Khalek says: "An apparent increase in the number of illegal charters is causing concern to the professional operators within the industry. We are happy to compete on an even playing field, but in many cases we are clearly not."

It appears the increase in operators flying illegally is partly driven, says Macdonald, by the difficult current economic cond-itions. "Owners see an opportunity to make some money to cover costs, passengers see a discounted charter available, but the gap between the benefits and consequences are wide," he argued.

"The implications are serious," says O'Sullivan, "many aircraft owners and charter passengers are simply unaware of the consequences."

An AOC holder takes all of the operational risk of public transport and is responsible if something goes wrong. For private owners who allow their aircraft to be used for illegal public charter, that risk, and therefore liability, remains with them. Stakeholder liability is a crucial, but misunderstood, issue.

Should an illegal charter incident occur it is possible insurance cover would be denied as the owner would be operating in contravention of insurance policy conditions, leaving them to foot the bill.

For aircraft owners, financial contracts are likely to include a clause stating the aircraft is not to be used for public transport. Financiers can recall financing or associated security if the owner is found to be in breach of the clause.

The panel concluded that there is also a worrying trend in Europe towards criminalisation of aircraft accidents, so in a worst case scenario the private owner could end up in jail as the onus sits with them to prove they have shown due care at all levels as the aircraft operator.

Passengers are increasingly requesting dry lease agreements to get round the AOC requirement. But the panel points out that what they often don't realise is that under dry lease terms, they in effect become the operator and are responsible for all compliance and liability.

Debate has centered on what the industry can do, and it was agreed that the panel represented a positive step towards raising awareness. The EBAA is preparing a campaign with the launch of a flyer which is being distributed to brokers, FBOs, airports and other interested parties. The leaflet which asks "Is my flight legal?" suggests passengers ask "is the aircraft on an AOC?", "is it possible to see the insurance documents", and "can I see the permit to fly?" in order to protect themselves.

A number of European countries have signed up to the Safety Assessment of Foreign Aircraft programme which sees ramp inspections made by member states assume a common format. Practically, this means for example if a German registered aircraft lands in the UK, local authorities can carry out checks. However, resources, as with most associations, remain an issue, and as yet the magnitude of the issue is not perceived to be that significant.

Khalek says: "We are getting frustrated as we don't want to wait until an accident happens for the serious implications of the grey market to receive the attention it would. We are a professional and well regulated industry, yet it may need a case going to court for any real awareness to be achieved. While there is a lack of understanding from consumers and providers, and regulators are under resourced, all we can do is continue to highlight the considerable risks and liabilities corporations and business travellers face if they do fly with a non- AOC operator."

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