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Understanding Covered Air Carrier [Aeronautics and Space]: Definition and Implications
Definition & Meaning
A covered air carrier is defined as an airline that has filed for bankruptcy protection or has had an involuntary bankruptcy proceeding initiated against it after December 12, 2003. If an airline is currently meeting its Passenger Facility Charge (PFC) remittance obligations and faces an involuntary bankruptcy proceeding, it has 90 days from the filing date to resolve the situation before it is classified as a covered air carrier. Once the airline successfully emerges from bankruptcy protection, it no longer holds this designation.
Table of content
Legal Use & context
The term "covered air carrier" is primarily used in aviation law, particularly concerning regulations related to bankruptcy and financial obligations to airports. This designation affects how airlines manage their financial responsibilities, especially regarding PFCs. Users may encounter this term when dealing with legal documents related to airline bankruptcy or airport funding issues, and they can utilize US Legal Forms templates to navigate these situations effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: An airline that has been compliant with its PFC obligations suddenly faces financial difficulties and files for Chapter 11 bankruptcy. It is classified as a covered air carrier during this period.
Example 2: A different airline is served with an involuntary bankruptcy petition. If it fails to dismiss this petition within 90 days, it will become a covered air carrier, affecting its ability to operate and meet financial obligations. (hypothetical example)
Relevant laws & statutes
The primary regulation governing covered air carriers is found in Title 14 of the Code of Federal Regulations (CFR), specifically 14 CFR 158.3, which outlines the definitions and requirements related to Passenger Facility Charges and bankruptcy proceedings.
Comparison with related terms
Term
Definition
Difference
Bankruptcy
A legal process for individuals or businesses to eliminate or repay debts.
Covered air carriers are specifically airlines undergoing bankruptcy proceedings under defined conditions.
Involuntary Bankruptcy
A bankruptcy filed against a debtor without their consent.
Covered air carriers may become classified as such only when an involuntary petition is filed against them.
Common misunderstandings
What to do if this term applies to you
If you are involved with a covered air carrier, it's essential to understand your rights and obligations. Consider consulting legal professionals who specialize in aviation law for tailored advice. Additionally, users can explore US Legal Forms for templates that can assist in managing documentation related to bankruptcy and PFC obligations effectively.
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