Todd E McNeal

Civil Reserve Air Fleet - 60/40 Rule: The Case for a Reinstatement Using Block Hours Todd E McNeal

Publisher Marketing: The Civil Reserve Air Fleet (CRAF) provides critical airlift capability to the Department of Defense (DOD) during both peace and wartime. One limitation placed upon CRAF carriers is the 60/40 Rule. This Rule states that commercial air carriers working on behalf of DOD can earn no more than 40% of their total revenue from DOD sources. Increased DOD airlift requirements from 2001 - 2010 led to suspension of the 60/40 Rule as DOD air transportation needs grew. As airlift demands are projected to subside from present day to 2015, certain air carriers, notably charter carriers, will need to find other sources of business to maintain economic viability. To encourage this adjustment, the DOD should return to enforcing the 60/40 Rule. The 60/40 Rule is sporadically applied and cumbersome in part due to its reliance upon Revenue. Block Hours are the baseline of civil air operations, easily measureable, and maintain a common definition among air carriers. Therefore, an enforcement of a Block Hour 60/40 Rule is more balanced. A Block Hour 60/40 Rule assumes that if a carrier is earning 60% or more of their block hours from non-DOD sources, economic balance can be implied. This is beneficial to the carriers as well because those severely in non-compliance with the Revenue 60/40 Rule, while possibly in non-compliance with a Block Hour 60/40.