DOT IMPOSES $40,000 FINE ON PARADIGM AIR OPERATORS, INC.
October 25, 2021
On September 20, 2021, the U.S. Department of Transportation (“DOT”) issued a consent order in response to alleged violations of 49 U.S.C. § 41712 by Paradigm Air Operators, Inc. (“Paradigm”) for allegedly engaging in air transportation without holding the required economic authority from DOT. The order also indicates that DOT has imposed a civil penalty of $40,000 on Paradigm for the violations.
Paradigm, a corporation that operates several Boeing 757 and 737 aircrafts, was found to be in violation of 49 U.S.C. §§ 41101 and 41712, which require that a citizen of the United States, which includes corporations organized in the U.S., to hold economic authority granted by the Department in order to engage directly or indirectly in air transportation. In Paradigm’s case, DOT accused the company of directly engaging in air transportation despite the fact that the company has never held economic authority from DOT. Through its investigation, DOT’s Office of Aviation Consumer Protection found that on several occasions, Paradigm engaged in direct holding out of air transportation by conducting revenue demonstration flights, which allowed it to obtain new business by providing potential customers with a first-hand experience of Paradigm’s service. Further, OACP also found that on several occasions, Paradigm had also engaged in indirect holding out of air transportation by soliciting charter business through air charter brokers.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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