Industries

Aviation – Manned & Unmanned

Why Cooley

With over 40 years of experience in the aviation community, our lawyers have a regulatory and business law practice providing counseling within the industry while offering a range of legal services to our clients, including M&A, corporate antitrust matters, aircraft acquisitions, commercial contract preparation and negotiation, tax advice and audits, internal and governmental investigations and litigation.

Our lawyers are actively involved with industry trade associations, such as the Airlines for America (formerly Air Transport Association), the National Business Aviation Association and the National Air Carriers Association.

Regulatory Agencies

They practice in federal and state courts and represent clients before multiple regulatory agencies including:

  • Department of Transportation
  • Federal Aviation Administration
  • Department of Justice Antitrust Division
  • Internal Revenue Service
  • Department of Homeland Security
  • Transportation Security Administration
  • Department of State

Department of Transportation

Economic Regulation

Our lawyers practiced before the Civil Aeronautics Board prior to deregulation in the airline industry, and, with the transfer of economic regulatory functions to the Department of Transportation, Cooley has been active in all phases of DOT proceedings, ranging from M&A to formal enforcement and certificate proceedings.

We have worked on a variety of matters, including:

  • Licensing new startup carriers, such as Morris Air, JetBlue Airways, SkyBus and Swift Air.
  • Assisting air carriers that have had their certificates noticed for revocation and/or revoked by the Department of Transportation.
  • Obtaining operating authority to foreign countries for our clients in contested and uncontested proceedings.
  • Licensing foreign air carriers for operations in the United States and internationally.
  • Advising clients before the DOT's Office of Aviation Enforcement and Proceedings in investigations of alleged violations.

Foreign Ownership & Control

The requirement that a US air carrier be a "citizen of the United States" continues to be an important aspect of an air carrier's regulatory compliance program. Our lawyers have been on the cutting edge of this issue for years. When one of our clients sought approval of a new financing plan, Cooley lawyers persuaded the Department of Transportation to make a major modification to established standards for interpreting the citizenship requirement for US carriers. Congressional interest in the issue has resulted in Cooley engaging in extensive work before the relevant committees in both Houses of Congress. We advise both domestic and foreign interests with respect to this issue.

Department of State

Our lawyers represent carriers and other interests in bilateral and multilateral negotiations of aviation matters between the United States and various foreign countries. Projects involving bilateral issues include: 

  • Operating rights to Australia, China, Japan and New Zealand.
  • Charter rights to Japan.
  • Bilateral negotiation issues before the Department of State and Department of Transportation dealing with countries such as Australia, Canada, France, Japan, Korea, New Zealand and the Philippines.

Federal Aviation Administration

Our lawyers include a licensed commercial, multiengine, instrument-rated pilot. We have advised clients on a variety of aviation-related issues, including:

  • Part 121 operation issues.
  • Drug and alcohol testing matters.
  • Enforcement proceedings.
  • Engineering, unapproved parts and maintenance issues.
  • Airport access problems.
  • Operating restrictions for part 135 operators.
  • Aircraft management and operating agreements for general aviation clients.

We also have been active on the issue of slot availability at certain high-density airports and the Federal Aviation Administration's regulation of these slots. In 2000, Cooley helped JetBlue obtain the largest slot allocation for a new entrant carrier ever, facilitating the launch of the airline. We have continued to represent JetBlue in connection with its efforts to acquire slots, including at Ronald Reagan Washington National Airport, where JetBlue initiated service in November 2010, and LaGuardia Airport in New York.

Our lawyers have considerable experience in handling FAA enforcement and letter of investigation proceedings, including proceedings where the government has sought civil penalties exceeding $1 million. We have been successful in either securing dismissal or reducing air carrier liability by significant amounts. A recent case resulted in the FAA withdrawing its enforcement action after completion of its inspector's deposition.

Our clients include:

  • US and foreign airlines
  • Air taxis
  • Aircraft owners, lessees and brokers
  • Airframe and parts manufacturers
  • Fixed-base operators
  • Charter operators
  • Airline Tariff Publishing Company

Issues that our lawyers work on include:

  • Unmanned Vehicles Systems
  • Capacity purchase agreement
  • DCA slot exemption allocation proceeding
  • Air carrier codeshare (domestic and international)
  • International pricing counseling
  • Extended tarmac delay rule
  • Equipment maintenance agreements
  • Flight and duty time rulemaking
  • Compliance with full fare advertising rules
  • FAA and DOT enforcement
  • Bilateral issues for Asian, African, Caribbean, Central American and Latin American countries
  • DOT and FAA civil penalties
  • Charter contracts
  • Software contracts
  • Antitrust issues in the United States

Antitrust

Drawing on its antitrust and litigation lawyers, Cooley has participated in airline merger cases and offered ongoing counsel in antitrust regulation.

Our lawyers have worked on the following matters:

  • Assisting a company jointly owned by several airlines with the requisite sensitivity to the Department of Transportation, the Department of Justice and European Union jurisdiction, not only in the antitrust area, but also with respect to general business issues as well as tariff rules and regulations.
  • Aiding a recipient of a criminal grand jury subpoena in the DOJ’s air cargo price-fixing investigation.
  • Advising clients in connection with both civil merger and nonmerger investigations by the DOJ’s Antitrust Division.
  • Slot allocation proceedings and slot auction proceedings before the DOT.

Corporate & Commercial

In addition to advising aircraft owners in standard corporate and commercial matters, we assist airlines in a broad range of commercial arrangements unique to the airline industry, such as flying agreements between regional and major airlines, ground handling agreements, maintenance agreements for aircraft, engines and parts, supply agreements and software and other intellectual property development and licensing arrangements. Our clients also include both buyers and sellers of aircraft, engines and parts, as well as owners seeking to finance their aircraft through traditional operating leases, leveraged leases and other financing structures.

Financing & Purchasing

Our lawyers assist clients with purchase negotiations, sale and leasing of aircraft and the financing of air carriers, as well as the purchase and sale of air carriers (Part 121, Part 135 and Part 145). Cooley advises major and regional air carriers from their inception, including structuring and financing. We also offer business counseling in all phases of the aviation industry, including review of proposed mergers and acquisitions.

The business transactions that Cooley has handled include:

  • The startup of a new airline
  • The acquisition of a regional airline from a major air carrier
  • Leveraging and operating leases of aircraft
  • Maintenance agreements for aircraft, including heavy maintenance, line maintenance, power by the hour and other engine maintenance agreements, other component maintenance agreements and tire supply agreements
  • The purchase and sale of aircraft
  • Ground handling agreements
  • Flying agreements between regional and major airlines
  • Capacity purchase agreements
  • Air charter arrangements
  • Time-sharing agreements
  • Fractional ownership arrangements
  • Management services agreements
  • Like-kind exchanges and "reverse" like-kind exchanges

Litigation

Cooley’s litigation department is fully integrated with the aviation practice. Our lawyers advise clients across the country in private disputes between air carriers and aviation companies in state courts, federal courts and commercial arbitrations, as well as litigation arising from administrative proceedings at the Department of Transportation, Federal Aviation Administration, Transportation Security Administration and the Department of Justice’s Antitrust Division.

Cases we have handled include:

  • Alitalia Linee Aeree Italiane v. Airline Tariff Publishing, 580 F.Supp.2d 285 (S.D.N.Y. 2008): Advised major company that publishes airline tariffs in suit challenging critical contract clause on limitation of liability and seeking damages; obtained summary judgment on interpretation of contract. 
  • World Jet Trading v. JCDE (Arbitration 2007): Arbitrated return of escrow deposit under aircraft sales contract after potential buyer's rejection of aircraft. 
  • Port Authority of New York and New Jersey v. FAA, No. 08-1262 (D.C. Cir. 2008): Assisted intervenor JetBlue in industry petition to review FAA order purporting to implement slot auction at New York airports; D.C. Circuit issued stay of implementation of slot auction rule, which FAA eventually withdrew. 
  • Southwest Airlines v. TSA, 554 F.3d 1065 (D.C. Cir. 2009): Successfully aided Hawaiian Airlines in industry appeal of increase in aviation security infrastructure fees. 
  • FAA v. Hawaiian Airlines, FAA-2009-0578 (2009): Successfully defended Hawaiian Airlines in enforcement action regarding maintenance problem on flights; after extensive discovery, FAA agreed to dismiss the entire action with prejudice. 
  • Hawaiian Airlines v. American Samoa, DOT-OST-2006-25612 (Apr. 2, 2007): Sought and received declaratory order from the Department of Transportation ruling that the governor of American Samoa could not bar Hawaiian Airlines from serving the island territory.
  • United States v. Airline Tariff Publishing, Civil Action No: 92 2854 (D.D.C. 1993): Defended Airline Tariff Publishing Company in lawsuit brought by the US Department of Justice’s Antitrust Division against the client and six airlines alleging that air carriers used ATPCO's price-publishing systems to engage in anti-competitive signaling in violation of the Sherman Act; also represented ATPCO in 42 class action treble-damage suits following the government suit.

Taxation

Cooley advises clients on a wide variety of aviation tax matters, including taxable fringe benefits under standard industry fare level, or SIFL, rules; qualification for reduced SIFL rates due to business-oriented security concerns; business expense deductions; limits on deductions for personal use; entertainment expense deduction limits; foreign travel deduction limits; spousal travel deduction limits; depreciation lives and methods; tax recordkeeping and reporting; federal transportation excise taxes; passive loss limitations; partnership and S corporation taxation; like-kind exchanges; state sales and use taxes; and securities law disclosures.

Our lawyers have experience with transactions and business arrangements pertaining to leases qualifying for resale exceptions for state sales and use tax purposes, "synthetic" leases, air charter arrangements, aircraft management agreements, time-sharing agreements, joint ownership arrangements, fractional ownership arrangements, management services agreements, like-kind exchanges and "reverse" like-kind exchanges.

We frequently publish articles, present at conferences and prepare commentary for the Internal Revenue Service on behalf of the National Business Aviation Association.