The perennial issue of illegal or grey charter continues to infuriate established commercial operators around the Middle East.This practice – defined as when a private aircraft owner/ operator takes money for flying people when that owner and/or operator has no legal right to do so – is more active in the Middle East than in other parts of the world. Some estimates put the tally at between 20% and 40% of business aircraft flights at any given time, depending on the time of the year.

Ali Al Naqbi, founding chairman of the Middle East Business Aviation Association, says while there is no definitive number, “we all know it is very active in the region”.

These practices, he argues, are putting commercial operators at a distinct disadvantage. “Private owners don’t have the costly overheads associated with their commercial counterparts so they can rent out their aircraft at a much lower rate than the licensed operators,” Al Naqbi says.

“Not only do illegal flights create unfair competition and hinder the growth of legitimate operators, they invalidate insurance coverage,” he continues.

For these legitimate operators, grey charter is an anathema.

“Don’t call it grey charter. Call it the black market, because that is what it is,” says Mark Pierotti, chief operating officer of Abu Dhabi-based VIP charter and management company Al Jaber Aviation.

Pierotti’s disdain for the operators’ flagrant disregard of the rules is evident. “They aren’t hiding [their illegal activities]. They are flaunting it,” he argues. “We know who they are and where they are based. We just need the teeth to stamp it out once and for all,” Pierotti continues.

This widely felt frustration is justified, because despite the rampant abuse, no aircraft have been impounded and no prosecutions have been lodged to date.

This could be about to change, however. Jordan recently pledged to carry out unscheduled ramp checks at its airports and any aircraft found to be operating illegally will be impounded.

The aircraft and its owner/operator would also be banned from Jordanian airspace, the country has promised.

“I am not a great believer in punishment, much more in education and persuasion,” says Mohammad Amin Al-Quran, chief executive of Jordan’s Civil Aviation Regulatory Commission. “But enough is enough”.

For Patrick Gordon, chief executive of VIP charter operator Royal Jet, such fighting talk is nothing new. He says unless radical measures are taken to address the problem, this practice will persist.

“I have been in corporate and VIP aviation for decades, and I have been hearing the legal charter operators complain about this issue for my entire career,” says Gordon.

The most difficult grey market operators to identify, he suggests, are those who have an aircraft registered in one country, an air operator’s certificate (AOC) from another country and operate from a base in a third country.

“The multiple layers of accountability and responsibility are extremely difficult to monitor thoroughly to ensure enforcement of regulatory issues,” Gordon continues. “Such airplanes are like the tramp steamers that ply the world under flags of convenience, registered in countries that, too often, have no interest in anything but collecting the registration fees,” he says.

Gordon believes the most effective weapon in the fight against illegal operators is whistleblowing.

“In the Western world, whistleblowers have brought entire industries to their knees. Why not grey market chartering?” he asks.

“Investigations with the goal of prosecution would have to begin on the inside of the offending company. If [employees] are aware of illegal activities, they could begin a programme of collecting invoices, flight records and passenger lists and noting frequency of flights and specific passengers. This includes the time-honoured scam of invoices for so called ‘demo flights’”.

Gordon believes that given the risks involved, there would have to be a financial incentive for an employee to blow the whistle. “Absolutely nothing will be done about unscrupulous, grey market charter operators until their scams become financially beneficial to someone other than the seller and buyer of the product,” he says.

MEBAA meanwhile is hoping to clamp down on illegal charter by educating aircraft owners, operators and their customers on the pitfalls of the practice. It will unveil legislation at the MEBA show in Dubai, on which it has been collaborating with the US General Aviation Manufacturers Association and a number of regional civil aviation authorities for a couple of years.

The grey market is “a disaster for this region” Al Naqbi concedes and stakeholders have a lot of work to do if the industry is to eventually win the fight against these operators.

Source: Flight International