The aviation industry has endured a significant amount of financial distress since the Sept. 11, 2001, terrorist attacks. In recent years, regional air carriers, a once-profitable segment of the airline industry, have experienced a bumpy ride due to a decreased demand in military spending, wildly fluctuating fuel costs and an overall weakness in the global economic markets. Several regional airlines have recently filed for bankruptcy to pursue mergers, sales or other restructurings of their operations.
In order to acquire certificates from federal agencies authorizing them to fly, airlines are subject to extensive regulations based on the inherent safety concerns that are associated with air travel, and air carriers that are filing for chapter 11 face enhanced scrutiny. This article discusses the regulations governing air carrier operating certificates and addresses the challenges that are encountered by financially troubled regional air carriers seeking to preserve or transfer their certificates through the chapter 11 process.
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