Cabotage Rules Pose Major Compliance Challenge for Business Aviation in US, Mexico, Canada and Latin America

Cabotage — the carriage of passengers or freight between two points within a single country by a foreign-registered aircraft — is identified as one of the most complex compliance areas in international business aviation flight planning. Under Article 7 of the Chicago Convention, all 193 ICAO member states retain the right to refuse foreign-registered aircraft permission to carry passengers for remuneration between domestic points, and violations can result in steep financial fines, aircraft grounding, or revocation of landing and overflight permits.

In the United States, cabotage is governed by Title 49 of the United States Code, specifically 49 U.S.C. § 41703 and § 44711, making it unlawful for a foreign civil aircraft to transport passengers for compensation or hire between two US points; foreign commercial charter operators face a strict ban on domestic point-to-point passenger transport unless they hold explicit governmental permits or special exemptions, while Part 91 foreign-registered aircraft are generally permitted multi-stop domestic flights provided the itinerary maintains an unbroken international character. In Mexico, the Agencia Federal de Aviación Civil (AFAC) has issued multiple regulatory changes and increasingly strict interpretations in recent months; Fernando Apreza, Success Supervisor at ground handler Manny, advises operators not to assume rules based on previous trips, and for Part 135 operators a foreign carrier may transport only passengers it originally brought into Mexico as part of its own operation. In Canada, the Canadian Transportation Agency (CTA) prohibits cabotage under the Canada Transportation Act, with foreign commercial charter operators barred from domestic legs unless they secure non-scheduled international service permits, while private Part 91-equivalent operators retain greater flexibility on multi-city tours because such non-revenue operations fall outside CTA's economic licensing jurisdiction.

In the Bahamas, the Civil Aviation Authority of the Bahamas (CAAB) prohibits cabotage for foreign operators and advises operators to communicate directly via its online portal following recent regulatory updates; Ruth Cleece Thackray, Marketing Manager at Nassau FBO Odyssey Aviation, says the company confirms directly with CAAB whenever there is uncertainty about a particular operation's legality. In Panama, foreign commercial charter operators face a rigid ban on domestic point-to-point passenger carriage for hire unless explicit commercial permits are granted, while foreign Part 91 private operators may conduct multi-stop domestic flights for strictly non-remunerated private purposes. In Brazil, the National Civil Aviation Agency (ANAC) does not permit cabotage by foreign operators and typically does not provide a direct official channel for clearing operations in advance; Cynthia Oliveira, Operations Director at Líder Aviação, advises international flight departments to examine passenger movement carefully throughout domestic legs, including whether the same passengers arrive and depart Brazil and whether anyone is added to the General Declaration.

The pattern across these jurisdictions is a consistent split between commercial charter operations, which face hard bans on domestic point-to-point carriage absent specific permits, and private Part 91-type operations, which retain more flexibility so long as the trip preserves an unbroken international character. That distinction, not a single uniform cabotage rule, is what flight departments must plan against on every multi-stop itinerary that touches domestic legs.

The segment runs on documentation and advance verification rather than on precedent: Mexico's shifting interpretations, Brazil's lack of a direct pre-clearance channel, and the Bahamas' portal-based confirmation process all show that compliance depends on checking the current rule for that specific trip, not on how a similar itinerary was handled before. Passenger continuity — whether the same people who entered a country are the ones carried on a domestic leg — is the recurring test regulators apply, from Mexico's rule on passengers originally brought in by the foreign carrier to Brazil's scrutiny of General Declaration entries.

Further regulatory tightening in Mexico, and how AFAC's recent changes are formally codified, stand out as the near-term point to track given operators' own warnings against assuming continuity with past trips.