True story: The Transportation Department today fined President Air Charter, a Canadian air taxi operator, $20,000. Why? It had apparently violated cabotage laws.

Here’s the consent order (PDF).

If you said cabo…what you’re not alone. Cabotage is an antiquated rule governing the transport of passengers between two points in the same country by an aircraft registered in another country.

Too bad the rule exists, because if foreign carriers were allowed to operate in the U.S., it would improve service dramatically. Can you imagine flying transcontinental on Singapore Air? I argued for cabotage laws to be eliminated in the past — here’s a 2002 op-ed on the subject — but the subject is a non-starter in Congress, unfortunately.

Here’s what President Air did:

On August 13, 2010, one of its chartered aircraft entered the United States at Bradley International Airport (BDL) from Hamilton, Ontario, Canada (YHM) carrying four passengers. At BDL, it dropped off one YHM-originating passenger and picked up two passengers and then continued to Boston with five passengers onboard.

On August 15, 2010, the aircraft flew back from BOS to BDL with the same five passengers onboard (the remaining three YHM-originating passengers and the two BDL-originating passengers). At BDL, the two BDL-originating passengers deplaned and terminated their journeys.

The aircraft then picked up the YHM-originating passenger who left the aircraft on August 13, 2010, and flew back to Toronto, Canada (YKZ) with all four YHM-originating passengers onboard.

Got all that? (Yes, I’m a little confused, too.)

This is the first consent order I’ve seen in a long time that hits an airline for cabotage violations. In fact, I can’t remember the last one.

Maybe it’s time to take another look at the rules restricting international airlines from operating in the U.S. The DOT put this tiny carrier under a microscope and unlike big carriers, this fine will probably hurt the company. Is this a good use of taxpayer money?

(Photo: B. Oliston/Flickr Creative Commons)