Business Flying Interpretation

flyboy102

flyboy102

Pre-Flight
Joined
Jan 12, 2009
Messages
33
Location
USA
Display Name
Display name:
Flyboy102
Here's a scenario up for debate that I have yet to hear a clear response to:

Al is an employee on the payroll at Acme Company, maker of the Acme Anvil. He holds his commercial pilot certificate, but that is not his job title. One day Acme decides they would like to lease an airplane, and after hearing about Al’s pilot experience, want him to fly the aircraft and a few select employees to various meetings around the country. All costs are covered by Acme. Is Acme required to obtain a part 135 certificate in order to operate the aircraft with Al as the pilot? Or is it legal operate under part 91?

Any references would be very helpful.


Fire away!
 
Is Al attending the meeting as part of his primary job or is he "just the bus driver" ?
 
He's commercial? Sounds like a part 91 op to me.
 
This sounds like 91 to me also. A lot of the race car teams here operate that way here in Charlotte.
 
Yep, they are flying employees of the company, and not just schmoes off the street. Can't see this being anything but a part 91 deal. Whether all needs to be at the meeting or not is irrelevant since he's commercial. Of course he will need to make sure his 2nd class medical isn't working outside the 12 months.

You will want to look under part 119 and part 135 for references.
 
flyboy102 said:
Here's a scenario up for debate that I have yet to hear a clear response to:

Al is an employee on the payroll at Acme Company, maker of the Acme Anvil. He holds his commercial pilot certificate, but that is not his job title. One day Acme decides they would like to lease an airplane, and after hearing about Al’s pilot experience, want him to fly the aircraft and a few select employees to various meetings around the country. All costs are covered by Acme. Is Acme required to obtain a part 135 certificate in order to operate the aircraft with Al as the pilot? Or is it legal operate under part 91?

Any references would be very helpful.


Fire away!
Click to expand...

Since the company is not "holding out" to provide air transportation to others they are not required an Air Carrier Certificate.

119.3 Definitions

Noncommon carriage means an aircraft operation for compensation or hire that does not involve a holding out to others.

119.1 Applicability.

(a) This part applies to each person operating or intending to operate civil aircraft—
(1) As an air carrier or commercial operator, or both, in air commerce;
 
dmccormack said:
Who or what has operational control of the aircraft?

If corporations could avoid 135 this easily they would.
Click to expand...

The only real reason some corporations get a Part 135 Certificate is to offset the aviation department cost by chartering the aircraft out during their non use.

The key part of this is whether the company is "holding out" to the public to sell it's transportation services.
 
It's definitely a part 91 department. Even if they fly other folks (clients for example) on business related to company ops, at the COMPANY's direction, it's part 91.

With that said, depending on who writes the insurance, they may find it cost effective to run it like a 135 operator, with a formal ops manual, and meet 135 specs for equipment, crew quals and rest and dispatch and everything else.
 
TMetzinger said:
With that said, depending on who writes the insurance, they may find it cost effective to run it like a 135 operator, with a formal ops manual, and meet 135 specs for equipment, crew quals and rest and dispatch and everything else.
Click to expand...

I have never seen an insurance company make such requirements for a corporate operation. :dunno:

Most insurance underwriters are only concerned with the area of operation, Formal training and recurrent of the pilot(s), airport of base (hangar or not), maintenance (manufacturer maintenance program) and type of airport where based (control tower, fire station).
 
EdFred said:
Yep, they are flying employees of the company, and not just schmoes off the street. Can't see this being anything but a part 91 deal. Whether all needs to be at the meeting or not is irrelevant since he's commercial. Of course he will need to make sure his 2nd class medical isn't working outside the 12 months.

You will want to look under part 119 and part 135 for references.
Click to expand...

Doesn't matter who they're flying, they could transport homeless bums or the CEO of a competitor, as long as no one is charged for the flight.
 
jtheune said:
Is Al attending the meeting as part of his primary job or is he "just the bus driver" ?
Click to expand...

If Al is attending those meetings (or more specifically has a reason for traveling to the same destination beyond providing pilot services for the rest of the pax) he wouldn't even need a commercial cert. or a Class II medical.
 
Rotor&Wing said:
I have never seen an insurance company make such requirements for a corporate operation. :dunno:

Most insurance underwriters are only concerned with the area of operation, Formal training and recurrent of the pilot(s), airport of base (hangar or not), maintenance (manufacturer maintenance program) and type of airport where based (control tower, fire station).
Click to expand...

Nor did I say the insurance company would require it. I said that they may see discounts for such actions. There's a difference.

When I worked for Nortel, I asked if their US flight department was 135 or 91. What I was told is that they operated like a 135, but under part 91, and they got lower insurance costs that way. It helps that the Flight Director (the guy, not the instrument) had significant 135 experience. He said that the principal difference was that their operations manual didn't have to get signed off by the FAA, but otherwise they operated the same way as his previous 135 firm.

Some companies get a 135 certificate so they can offer air services to other companies to help defray the cost of the operation. But that practice seems pretty rare nowadays.
 
TMetzinger said:
Some companies get a 135 certificate so they can offer air services to other companies to help defray the cost of the operation. But that practice seems pretty rare nowadays.
Click to expand...
What is much more common is for a company to put their airplane on someone else's 135 certificate.
 
TMetzinger said:
It's definitely a part 91 department. Even if they fly other folks (clients for example) on business related to company ops, at the COMPANY's direction, it's part 91.

With that said, depending on who writes the insurance, they may find it cost effective to run it like a 135 operator, with a formal ops manual, and meet 135 specs for equipment, crew quals and rest and dispatch and everything else.
Click to expand...

Sounds like my company's air shuttle service. Part 91, but they operate like an airline in terms of procedures, training, etc. And, because they don't have to deal with TSA and other such drones, the service is far more convenient.
 
The only way a problem would arise would be if Al leased the plane in his own name rather than the company leasing the plane -- that would become a 135 op. But as long as the company leases the plane, there's no problem at all.

The FAA doesn't care what's on your job description, only about what you actually do and what certificates you hold. A Private Pilot can be on the company rolls as a company pilot, and the FAA won't care as long as the person never actually flies a plane for the company. OTOH, since Al has a Commercial Pilot certificate, for all the FAA cares, he can be on the rolls as the company janitor while he flies the company plane.
 
Ron Levy said:
The only way a problem would arise would be if Al leased the plane in his own name rather than the company leasing the plane -- that would become a 135 op. But as long as the company leases the plane, there's no problem at all.
Click to expand...

As you know that's only true if Al was only providing pilot services (as was hinted in the OP). If Al was part of the team needed at the distant meetings he could supply the plane and charge his employer for it. He wouldn't even need a commercial cert.
 
gismo said:
As you know that's only true if Al was only providing pilot services (as was hinted in the OP). If Al was part of the team needed at the distant meetings he could supply the plane and charge his employer for it. He wouldn't even need a commercial cert.
Click to expand...
Concur.
 
Ron Levy said:
The only way a problem would arise would be if Al leased the plane in his own name rather than the company leasing the plane -- that would become a 135 op. But as long as the company leases the plane, there's no problem at all.

The FAA doesn't care what's on your job description, only about what you actually do and what certificates you hold. A Private Pilot can be on the company rolls as a company pilot, and the FAA won't care as long as the person never actually flies a plane for the company. OTOH, since Al has a Commercial Pilot certificate, for all the FAA cares, he can be on the rolls as the company janitor while he flies the company plane.
Click to expand...


Interesting. What's preventing every private pilot from setting up an LLC?

(I'll guess the liability protections are tissue thin)
 
If Al is not required at the meeting, he is getting paid to fly the plane - whether his job title says so or not, or whether he is salary or not. He's on the clock and he is only going because of his pilot services - resulting in compensation. The ONLY way he gets by doing this as a private pilot is if he is attending the meeting anyway.
 
Remember that "compensation" does not mean payment. If I am flying my Aztec and someone else (regardless of who/what that someone else is) pays for the fuel, I'm getting compensated, because I'm not paying my appropriate pro-rata share of the flight.
 
dmccormack said:
Interesting. What's preventing every private pilot from setting up an LLC?

(I'll guess the liability protections are tissue thin)
Click to expand...

Nothing, but it wouldn't allow a psuedo charter operation to become legal either.

AFaIK the FAA would consider any situation where a pilot being paid to fly an airplane has any kind of relationship with the aircraft to fall under part 135. Surely if an airplane was titled to a LLC and the LLC was partially or wholly owned by the pilot, the FAA would consider the relationship between airplane and pilot to be sufficient to make any paid flights to fall under part 135. From what I've read, even if the plane is owned by an FBO and the pilot doesn't work for the FBO, an existing relationship like the pilot using the FBO's aircraft to give instruction or fly any charters (and maybe just renting for personal use) would be sufficient.
 
EdFred said:
If Al is not required at the meeting, he is getting paid to fly the plane - whether his job title says so or not, or whether he is salary or not. He's on the clock and he is only going because of his pilot services - resulting in compensation. The ONLY way he gets by doing this as a private pilot is if he is attending the meeting anyway.
Click to expand...

Agreed.
 
Ted DuPuis said:
Remember that "compensation" does not mean payment. If I am flying my Aztec and someone else (regardless of who/what that someone else is) pays for the fuel, I'm getting compensated, because I'm not paying my appropriate pro-rata share of the flight.
Click to expand...

Unless it's incidental to business...

The OP situation seems to imply the pilot is flying for free.
 
Basically the FAA looks for someone "Holding out" to the public for transportation in accordance with FAR 119 to determine if it's a charter operation.

There are far more non Part 135 charter operations than Part 135 ones. Back a few years ago one of the south Florida TV stations did a story on the illegal air charter operations down there. The ones that were operating wihout a air carrier certificate said they did so because of all the FAA bureaucracy but more importantly they brought up another point that by not having the air carrier certificate they were less likely to get violated by the FAA. One of the legitimate 135 operators commented on this by saying the FAA found it easier to go after 135 operators for violations "because they already have us in their sights" and it was much easier for the FAA and less time and paperwork.

Another point brought up was the FAA will not investigate an illegal operator unless someone files a complaint or they catch someone during a routine ramp check.
 
Rotor&Wing said:
Another point brought up was the FAA will not investigate an illegal operator unless someone files a complaint or they catch someone during a routine ramp check.
Click to expand...

Probably true but how would they know to look otherwise?
 
gismo said:
Probably true but how would they know to look otherwise?
Click to expand...

I believe there is a hot-line number to report illegal charters. They leverage the legal charter operations who are invited to call in anonymously and narc on a competitor operating under the radar.
 
Rotor&Wing said:
Another point brought up was the FAA will not investigate an illegal operator unless someone files a complaint or they catch someone during a routine ramp check.
Click to expand...
That's why the industry set up the illegal charter hotline for reporting such activities. You call the hotline (888-759-3581 or 888-SKY-FLT1), they call the FAA. The FAA's support for this is demonstrated by the grant they gave to fund the operation. See http://www.nata.aero/web/page/1273/sectionid/553/pagelevel/2/tertiary.aspx for details.
 
twdeckard said:
I believe there is a hot-line number to report illegal charters. They leverage the legal charter operations who are invited to call in anonymously and narc on a competitor operating under the radar.
Click to expand...

Sounds a lot like filing a complaint to me.
 
gismo said:
Sounds a lot like filing a complaint to me.
Click to expand...

yes, its like using "user supplied content" far more efficient than canvasing bulletin boards for operations who are holding out 'very discretely' I was suprised they actually had a 1-888-narc number.

I did a charity flight this weekend and as part of the 91.146? regulations you send the FSDO your currency and competency and such and they ask "how many of these have been done by you in the last year, or by the charity in the last year?" I imagine they have had folks "solicit donations" for their bootleg operations as one angle around the law.

How have you been? Been flying much? My intrepid charity passenger and his guests had bid far too much for a sightseeing trip in a 182 given I would have taken them up for free so we made the loop around Minnetonka, took pictures of everybodies house, high school, flew up to 10,000ft just to say we did, dove down on some weired V-shaped artificial pond fish farm/mobile home park thing that we spotted from Space. It was an absolute blast. Reminded me that you can fly around in circles for Fun!
 
Ron Levy said:
That's why the industry set up the illegal charter hotline for reporting such activities. You call the hotline (888-759-3581 or 888-SKY-FLT1), they call the FAA. The FAA's support for this is demonstrated by the grant they gave to fund the operation. See http://www.nata.aero/web/page/1273/sectionid/553/pagelevel/2/tertiary.aspx for details.
Click to expand...

Go down to South Florida and you'll find the illegal operations out number the legal ones. Customers won't rat out the illegals because they are getting a service cheaper than the legal ones. Other Part 135 guys won't rat out the illegals because they know the knife cuts both ways.

The long and short of this is the illegal air carrier operations far out number the legal ones. And the FAA doesn't have the manpower, nor do most inspectors want to create the paperwork nightmare it takes to go after these guys.
 
dmccormack said:
I thought free loggable flight time was considered "compensation"?
Click to expand...
It is, but I said "the pilot isn't being compensated." If the LLC is paying for the flying and the pilot isn't, then the pilot is being compensated by the LLC with free flying time unless the flying is "incidental" to the pilot's employment by the LLC.
 
Rotor&Wing said:
Go down to South Florida and you'll find the illegal operations out number the legal ones. Customers won't rat out the illegals because they are getting a service cheaper than the legal ones. Other Part 135 guys won't rat out the illegals because they know the knife cuts both ways.
Click to expand...
I can't speak to South Florida, but the FSDO here told me they get most of their complaints from the legal 135 operators who don't like the unfair competition, and those legal operators are usually the ones in position to spot such activities.
 
Ron Levy said:
I can't speak to South Florida, but the FSDO here told me they get most of their complaints from the legal 135 operators who don't like the unfair competition, and those legal operators are usually the ones in position to spot such activities.
Click to expand...

Down in South Florida if the legit guy calls in a complaint then the illegal operator simply pays him back by calling in complaints on the legit guy, and often.

The FAA then has to investigate each and every allegation creating a nightmare for the legit guy. And with the nifty FAA "Dial-A-Snitch" program they can do it anonymously.
 
You must log in or register to reply here.
Back
Top