In other words, the airline had a little paperwork problem. Here’s the consent order (PDF).
Running an airline without authority is illegal, obviously.
A person or entity that does not hold economic authority from the Department may not lawfully solicit and contract as a principal in its own right with a charter customer for air transportation and then, as a principal in its own right, solicit and separately contract with a direct air carrier to provide the air service that it has promised to the charter customer.
The Transportation Department alleges the company unlawfully engaged in air transportation as a direct air carrier on its website at by referring to itself as the “first air carrier to originate non-stop service to Cancun, post Hurricane Katrina, from beautiful Louis Armstrong International Airport in New Orleans.”
Also, the government says City Skies held itself out as an indirect air carrier and provided air transportation to passengers from New Orleans to Honduras. City Skies unlawfully performed a flight as an indirect air carrier by utilizing Xtra Airways as its direct air carrier prior to receiving authority from the department, it says.
City Skies insists it tried to comply with the licensing requirements.
In its response to the government, the company said it stopped any actions which might be interpreted as “holding out” as a provider of any type of tour operations or any related services prior to the receipt of the written notification from the Transportation Department.
Respondents further state that City Skies’ website has been taken down, reviewed, and revised. Respondents also point out that they made efforts to comply with the applicable statutory and departmental requirements applicable to the flight operated as an indirect air carrier, even though respondents did ultimately fail to comply with the regulatory requirements applicable to such flight.
As part of the consent order, City Skies and its owner, Ronald Mays, must refrain from future violations. But it goes one step further, directing Mays to cease and desist for a period of not less than 20 months from the date of issuance of the order from directly or indirectly engaging in air transportation or air commerce, or both, except as an air travel consumer.
The order also prohibits Mays from involvement with an air carrier or foreign air carrier or their agents, ticket agents, and with any other entity directly or indirectly engaged or seeking to engage in air transportation or air commerce or both.
So that’s what you get for operating an airline without a license. Didn’t you always wonder?