FAA Perspective on Compensation

[poadeleted20]

The flight-time-as-compensation is an ugly interpretation. And it has the potential to screw a lot of people who are, in good faith, trying to follow the regulations.

For example, say you take a buddy for a burger run. You rent the plane "wet", so the total cost is easy...it costs you $100.00 for the trip. You each scrupulously pay for your own meals at the end.

How much can your buddy chip in for the plane? Most would say that he can chip in $50, right? Wrong...if he does that, you've received $50+flight time against a $100 bill, so you've received greater (flight time) than your pro-rata share. So then, how much less do you have to accept to balance things out? No clue, the FAA has never quantified what flight time is worth.

Jeff's interpretation differs from the FAA's. The situation described is permissible under 61.113(c) as long as they have a "common purpose" and the pilot does "not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees." That reg specifically allows that pilot to receive that flight time in excess of that for which he himself paid, as long as he pays "not...less than [his] pro rata share," which in this case is at least half, or at least $50 -- and he did.

 

[poadeleted20]

Do you have to have a valid Class II medical in addition to the CP in order to make this "legal" in the eyes of the FAA lawyers?

If you're doing something as a pilot that requires a CP-Airplane certificate, yes, 61.23(a)(2) says you must also have a Class II medical.

 

[poadeleted20]

Does the aircraft, flown under any of the conditions above, require 100 hr inspections? This is assuming no passenger is ever paying for the flight.

No, because the flight is not being conducted "for hire." Note that 91.409(b) just says "for hire," not "for hire or compensation."

 

[midlifeflyer]

If flight time is compensation, then this is incorrect.

No, your conclusion doesn't follow.

Even if flight time is compensation, 61.113(c) provides an exception so long as there is a shared flight with pro-rata shared expenses.

61.113(c) doesn't say that a pro-rata share is not compensation; it allows the flight even though the pilot is being compensated.

 

[poadeleted20]

IMO the FAA is trying to accomplish three things:

1. have higher safety requirements to protect members of the public who have no way of gauging a pilot's capabilities.

2. protect the investment of the pilots and companies that jumped through the regulatory and financial hoops to meet those requirements (ain't a big surprise that the general impression is that most 134.5 operations are reported by real 135 operators)

3. provide some disincentive to "creative thinking" about how to charge for flights to get around 1 and 2.

I don't think the FAA cares about #2 at all. Their only interest is safety for the public, and #3 is just part of achieving #1.

Does the FAA really care if you fly a good friend to his sister's wedding and he pays for 100% of the fuel? Doubtful.

They would if your good friend complained about the flight, but other than that, I think you're right.

 

[TMetzinger]

That's not enough. Read Mangiamele.
http://www.faa.gov/about/office_org...erpretations/data/interps/2009/Mangiamele.pdf

It may be incidental, but per Mangiamele, you cannot take the others along if Cisco pays for the flight.

I read it - I think it's not clear in Mangiamele whether he's asking about taking other co-workers to a meeting he needs to go to, or if he's just taking them (and he doesn't need to be there). I'll ask the specific question of the Chief Counsel if you can take others with a commonality of purpose as in my example.

 

[poadeleted20]

If flight time is compensation, then this is incorrect.

The cost of the flight (which is limited by regulation to direct costs) was $100. The pilot received $50 + flight time in return for that. Therefore he paid $50 - flight time for the flight, which is less (by the value of the flight time) than his pro rata share.

This sounds like that "find the missing dollar" puzzle -- in which the dollar was never there in the first place. If the friend paid the pilot $50 in addition to paying half the cost, Jeff would be right. But if the pilot paid the FBO $100 and then the friend gave the pilot $50, the pilot's net share paid is only $50. Likewise, if the pilot and the friend each gave the FBO $50, the pilot's share would also be $50. Either way, that $50 net cost to the pilot is at least half the cost, so it's legal under 61.113(c).

 

[poadeleted20]

I read it - I think it's not clear in Mangiamele whether he's asking about taking other co-workers to a meeting he needs to go to, or if he's just taking them (and he doesn't need to be there).

It was clear to me.

In the second scenario, you state that you are the Director of Vehicle Testing for a company whose business is not related to air transportation, and that on occasion, you use your airplane, a Bellanca Super Viking, for transportation to business meetings. You question if you may, and to what extent you may, be reimbursed for the cost of this transportation under 14 C.F .R. § 61.113. Further, you question to what extent you may be reimbursed if you also transport fellow coworkers to these business meetings.

I'll ask the specific question of the Chief Counsel if you can take others with a commonality of purpose as in my example.

Oh, please -- don't. If Mangiamele hadn't asked this question, we wouldn't be dealing with the outcome. Let's not ask any more questions when we can't stand the answers.

 

[Capt. Geoffrey Thorpe]

If flight time is compensation, then this is incorrect.

The cost of the flight (which is limited by regulation to direct costs) was $100. The pilot received $50 + flight time in return for that. Therefore he paid $50 - flight time for the flight, which is less (by the value of the flight time) than his pro rata share.

I have never seen anything from the FAA that even remotely hints at this.

Straight from the reference back at the begining of this tread:

Wondering what those exceptions are, you take
out your well-worn copy of the regulations and
quickly notice in part 61 that a sport, recreational,
or private pilot may receive some compensation
from passengers for a flight. But the pilot must cover
at least his or her pro rata share of the operating
expenses of a flight with passengers—and those
operating expenses can only involve fuel, oil, airport

expenditures, or rental fees.

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"fuel, oil, airport expenditures, or rental fees" - no mention of a "logging fee"...

The FAA is bad enough - do we really need to invent additional restrictions.

 

[TMetzinger]

It was clear to me.

Oh, please -- don't. If Mangiamele hadn't asked this question, we wouldn't be dealing with the outcome. Let's not ask any more questions when we can't stand the answers.

On a re-read of 61.113, I see their logic now, and I wonder if the language changed in the last re-write before 2009. So I have to agree with the interpretation (dammit) as written, if the FAA is going to assume that more or less everything is compensation.

If flight time wasn't compensation, though, then I think my first example would be ok as the flight would not be for compensation or hire, assuming Cisco provided the airplane.

I disagree - if Mangiamele hadn't asked the question, we'd be waiting to get violated for something we thought was ok and the FAA thought wasn't ok (depending on which inspector caught you at it). At least now everyone knows where this particular line is.

 

[JeffDG]

I have never seen anything from the FAA that even remotely hints at this.

Straight from the reference back at the begining of this tread:

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"fuel, oil, airport expenditures, or rental fees" - no mention of a "logging fee"...

The FAA is bad enough - do we really need to invent additional restrictions.

OK...to be clear...I don't really support my interpretation, or think it's in line with current FAA thinking...

It is, however, an unavoidable conclusion of the "flight-time-is-compensation" line of reasoning. I point it out as in this case it runs straight into an absurdity. I'm aware of the absurdity, but I caution that at some point someone will ask a stupid question of the Chief Counsel and they will, in keeping with their current line of embracing all absurdities, make it law.

 

[poadeleted20]

I disagree - if Mangiamele hadn't asked the question, we'd be waiting to get violated for something we thought was ok and the FAA thought wasn't ok (depending on which inspector caught you at it). At least now everyone knows where this particular line is.

If Mangiamele hadn't asked the question, nobody would have cared, especially since in 40 years I never met an FAA Inspector who thought that what Mangiamele asked about wasn't legal, and if the Inspector doesn't think it's illegal, it doesn't get written up.

 

[poadeleted20]

It is, however, an unavoidable conclusion of the "flight-time-is-compensation" line of reasoning.

Clearly it isn't "unavoidable," since the FAA Chief Counsel has said repeatedly that it's OK to share expenses where there's a common purpose and no third party paying for the transportation.

 

[gismo]

The "direct expenses" language refers only to expenses, not compensation received.

I'm not saying I agree with it, but it's the logical conclusion of the "flight time is compensation" line of thinking.

I really can't comment on anyone else's "line of thinking" but 61.113(c) states:
"(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees".

My "line of thinking" says that this clearly means as long as the pilot pays at least his pro rata share of the listed expenses (and meets the other requirements for cost sharing) he's OK WRT compensation. There's nothing in this FAR about factoring in any amount for flight time nor is there any FAA guidance regarding what dollar amount to apply to the pilot's pro rata share and baring that it would be impossible to determine what each person's share should be. That would pretty much mean that following your "line of thinking" no contribution from any passengers would be allowable (IOW the only option would be for the pilot to cover the entire cost of the flight).

AFaIK the concept of "flight time as compensation" has only been applied in situations where the pilot claimed that there was no compensation, not when the cost of a flight was shared by the participants.

 

[gismo]

It was clear to me.

It's clear to me as well. Not only is the Chief Counsel's opinion that a PPL cannot accept any reimbursement for the flight costs if passengers or materials are brought along (even with a common business purpose) it's also clear that said CC has their head deep in a dark orifice. The specific text referenced (61.113b) is:

(b) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.


Since (1) and (2) are separate clauses, IMO it's ludicrous to conclude that as written 61.113(b) bringing coworkers or "property" on a business flight eliminates the potential for said business to cover the flight's cost. A much more rational interpretation (and one that I believe was universally held prior to the publication of this CC response) is that clause (2) only precludes this when someone is being charged for said carriage of passengers or property.



If the rule was intended to mean what this latest interpretation purports (2) would read "the aircraft does not carry passengers or property". With the current interpretation under what circumstances could a private pilot receive compensation on a business related flight if a passenger accompanies the pilot? IOW when would the "for compensation or hire" portion of clause #2 have any meaning?


Keep in mind I'm not saying Ron is misinterpreting the CC ruling, just that this ruling doesn't make any sense given the words in the FAR and ought to be overturned.

Oh, please -- don't. If Mangiamele hadn't asked this question, we wouldn't be dealing with the outcome. Let's not ask any more questions when we can't stand the answers.

I hear ya.

 

[poadeleted20]

...just that this ruling doesn't make any sense given the words in the FAR and ought to be overturned.

Me, too -- and AOPA Legal, who I understand are working on a request for reconsideration on this and a couple of other recent off-the-wall interpretations.

 

[Capt. Geoffrey Thorpe]

OK...to be clear...I don't really support my interpretation, or think it's in line with current FAA thinking...

It is, however, an unavoidable conclusion of the "flight-time-is-compensation" line of reasoning. I point it out as in this case it runs straight into an absurdity. I'm aware of the absurdity, but I caution that at some point someone will ask a stupid question of the Chief Counsel and they will, in keeping with their current line of embracing all absurdities, make it law.

You act as safety pilot while I'm under the hood. Per our agreement, you act as PIC. We both log the time. Who pays for the gas?

We fly to the Air Zoo in my airplane. I'm paying for the airplane, insurance, wear and tear, etc. I let you fly since you have never flown an LSA taildragger before. You log the time as sole manipulator. Who can pay for how much gas? Who HAS to pay for how much gas? (My airplane doesn't burn oil, there is no rental or airport fees.) Can you pay my admission into the Air Zoo if I pay for all the gas (8 gallons)? Or the other way around? What if I don't trust your feet and do the takeoff / landings so you log less than all the time?

 

[poadeleted20]

You act as safety pilot while I'm under the hood. Per our agreement, you act as PIC. We both log the time. Who pays for the gas?

This one isn't completely clear because 61.113(c) just says "private pilot," not "pilot in command." However, since the FAA Chief Counsel has said that safety pilots need not pay for the time they accrue, I think pretty much any arrangement between the two pilots would be OK with the FAA as long as both pilots are "rated."

We fly to the Air Zoo in my airplane. I'm paying for the airplane, insurance, wear and tear, etc. I let you fly since you have never flown an LSA taildragger before. You log the time as sole manipulator. Who can pay for how much gas? Who HAS to pay for how much gas? (My airplane doesn't burn oil, there is no rental or airport fees.)

Again, I just don't think the FAA will much care about this sort of situation. In the cases I've read, they seem to get interested only when non-rated passengers are chipping in for the flight.

 

[midlifeflyer]

This one isn't completely clear because 61.113(c) just says "private pilot," not "pilot in command." However, since the FAA Chief Counsel has said that safety pilots need not pay for the time they accrue, I think pretty much any arrangement between the two pilots would be OK with the FAA as long as both pilots are "rated."

Again, I just don't think the FAA will much care about this sort of situation. In the cases I've read, they seem to get interested only when non-rated passengers are chipping in for the flight.

I think that's correct and it even makes sense.

Whatever the technicalities, enforcement activity is largely discretionary. If you think about the twin underlying policies of consumer protection and protection of 135 operator investment that this area deals with, there's really nothing in 2-pilots sharing a flight that one would expect to lead the FAA to concerns no matter what deal the two pilots make.

 

[nosehair]

I think the flight-time-as-compensation is only when that time is actually used to meet minimum experience requirements for a certificate or rating.

 

[Greg Bockelman]

How would you differentiate?

 

[midlifeflyer]

I think the flight-time-as-compensation is only when that time is actually used to meet minimum experience requirements for a certificate or rating.

Nah. Flight-time-as-compensation is only when (a) in an enforcement scenario, the FAA is confronted with something that smells like an operation that should require a commercial pilot or an operating certificate, smells a rat and can't find another way to hang the offender or (b) the FAA is asked a question that, if answered it differently, would indicate that it doesn't really use the concept.

 

[poadeleted20]

I think the flight-time-as-compensation is only when that time is actually used to meet minimum experience requirements for a certificate or rating.

That's not what the Chief Counsel has said.

Generally, accrual of flight time is compensation and the FAA does not enter into a case-by-case analysis to determine whether the logging of flight time is of value to a particular pilot. Legal Interpretation to John W. Harrington, from Donald Byrne, Assistant Chief Counsel (Oct. 23, 1997) [1997-23].

 

[EdFred]

So, that being said, you can not effectively determine the pro-rata share because even if you split the immediate costs, you are still getting flight time, which then means you got more than what you actually paid for.

 

[RotorAndWing]

What two consenting pilots do in the privacy of their airplane is their business.

or

What goes on in the cockpit stays in the cockpit.

 

[poadeleted20]

What two consenting pilots do in the privacy of their airplane is their business.

or

What goes on in the cockpit stays in the cockpit.

I'll buy the first, but unfortunately, while the second may be an admirable goal, sometimes it isn't true, so don't annoy the other party involved enough to send him/her to the FAA.

 

[weilke]

So, that being said, you can not effectively determine the pro-rata share because even if you split the immediate costs, you are still getting flight time, which then means you got more than what you actually paid for.

Yes, but nobody cares, simply because statute describes in sufficient detail what is allowed in that situation.

 

[TMetzinger]

What two consenting pilots do in the privacy of their airplane is their business.

or

What goes on in the cockpit stays in the cockpit.

Unless you're that helo pilot who flew motley crue around.

 

[RotorAndWing]

Unless you're that helo pilot who flew motley crue around.

There are benefits to flying helicopters that you just don't get in the fixed wing world.