FAA's proposed crackdown on JSX raises concerns over rural air service and aviation innovation

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Airbus A380 | Airbus

By Sky Industry News

Sep 14, 2024

The Federal Aviation Administration (FAA) has announced plans to implement a regulatory crackdown on scheduled charters like JSX, driven by pressure from competitors American Airlines and Southwest Airlines, along with the Air Line Pilots Association. The FAA aims to fast-track this action, with a proposed rulemaking expected this year and a final rule next year.

American Airlines has admitted its motive in lobbying against JSX is to avoid competition. CEO Robert Isom stated in a closed meeting, “If you don’t have to deal with the same DOT provisions, the same FAA provisions, the same security TSA provisions that’s not fair…. I’m quite certain that the FAA, the DOT, and TSA will take a look at what’s going on and make sure that no one is advantaged..”

JSX operates from private terminals while exceeding TSA security requirements. Passengers can arrive 20 minutes before their flight, enjoy spacious seating, free checked bags, free Wi-Fi, drinks, and snacks. All of these services comply with established rules and had satisfied the Department of Transportation and TSA until competitors began lobbying.

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The debate often overlooks future consequences of regulatory changes. Shutting down a business impacts future innovation and small city air service potential. Economist Pete Boettke noted that changing rules affects long-term commercial aviation operations.

The FAA's potential requirement for part 135 carriers like JSX to follow part 121 rules would impact competition significantly. American Airlines and Southwest might achieve their goal of reducing competition but at the cost of innovative air services.

Essential Air Service subsidies have increased significantly through the FAA reauthorization bill. However, innovative services like those offered by JSX could reduce reliance on such subsidies.

Most small rural airports are unlikely to be served by major airlines due to economic constraints. However, new fuel-efficient planes could serve these airports if there remains a market for them.

JSX has ordered up to 150 19-seat Aura Aero Eras aircraft, up to 82 9-seat Electra sTOLs, and up to 100 30-seat Heart Aerospace ES-30s. These aircraft are being developed based on existing regulations which allow them to operate economically in markets underserved by major airlines.

Part 135 operators are essential for achieving efficient rural air service using smaller planes. Without supportive regulations, demand for these planes will decline. This nascent hybrid electric and electric aircraft industry could either develop domestically or fall behind countries like China.

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