FAA Perspective on Compensation

In other news, the FAA is also claiming that the words "Thank you," "I appreaciate it," and "I had a good time," as compensation.
 
That is a well written article. Of course, it leaves a lot more stuff to look up on my own, but its a good starting point.

Thanks for posting!
 
So, all joking aside, what is the purpose of this level of regulation? I'm not trying to get political as in 'liberal' vs 'conservative', etc. and I'm not asking about conspiracy or other such theories. I'm asking an honest question about something I don't know. From the FAA perspective, why is 'compensation' so tightly regulated and interpreted?

Be Well,

Jimmy
 
The FAA just wants to ruin friendships and punish people for having friends that don't fly.
 
I have no idea, but my guess is they want to make sure a private pilot certificate really doesn't benefit anyone other than the holder. The logic, maybe, is that the standards and minimum experience necessary for a private pilot are not sufficiently high to expose the general public to. Since the general public does not have the knowledge or expertise necessary to judge the qualifications of a pilot or the safety level of the flight, they expect the relevant regulatory agency to guarantee a basic level of safety for them. The line is drawn as tightly as it can without completely disallowing the carrying of passengers by private pilots.

That's the best I can come up with - maybe someone else can do better. It seems to me stupid and needlessly burdensome. I think a restriction on being directly paid without a commercial license makes some sense, but beyond that if it qualifies for a part 91 operation, I don't see that you should need a commercial cert.
 
If I had a guess, I'd say that if someone is going to pay for your services (whether the customer knows the regs or not), they want to know you are qualified to do what they want. That is, have plenty of "real world" experience (not the summer, you got a private license in where you had perfect weather the whole time), and have "precision flying skills". Flight training logged in commercial maneuvers such as eights on pylons, lazy eights, chandelles.

I would guess they just want to know the customer is safe (proven, pilot skills) as well as the pilot (not a potential terrorist?)

If the regs weren't so tight, they might have "amateurs" trying to pay for flight time when they arent skilled enough to be at the demands of a customer.

Pretty much what Chucky said (I posted without reading).
*****
I will say, I am still a little fuzzy about the compensation with a commercial certificate. It seems even with a commercial certificate, the only thing you can do is instruct, and even that requires more training. (that is, without taking a 135 checkride or something similar)
 
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There are a number of different kinds of flying for compensation that can be done under part 91 - for example, if someone with more money than I'll ever have buys himself a nice airplane, he can hire a pilot with a commercial cert to fly him around. In a similar vein, companies that own their own aircraft to transport their own employees around can do it without an operator's certificate - thus a pilot only needs a commercial cert (and the appropriate ratings) to fly. Even 135 and 121 operators can fly certain flights under part 91 - which might include using pilots not qualified for the 135 or 121 operations.

The short version is, I think, that you can basically do any kind of flying for compensation that doesn't need to be operated under part 135 or part 121. I'm sure it's more complicated than that, but that's as best as I can figure it.
 
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chucky said:
There are a number of different kinds of flying for compensation that can be done under part 91 - for example, if someone with more money than I'll ever have buys himself a nice airplane, he can hire a pilot with a commercial cert to fly him around. In a similar vein, companies that own their own aircraft to transport their own employees around can do it without an operator's certificate - thus a pilot only needs a commercial cert (and the appropriate ratings) to fly. Even 135 and 121 operators can fly certain flights under part 91 - which might include using pilots not qualified for the 135 or 121 operations.

The short version is, I think, that you can basically do any kind of flying for compensation that doesn't need to be operated under part 135 or part 121. I'm sure it's more complicated than that, but that's as best as I can figure it.
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Short version for commercial cert holders:

If all you're doing is providing yourself and your services, you are generally good, because you're not the legal operator of the airplane, you're just the paid pilot.
Examples - ferry pilot, test pilot, part 91 corporate pilot (company owns the airplane), paid pilot for an individual owner.

When you bring the airplane too, there are a very limited number of things you can do without getting some sort of operator certificate, and even then many of them require some form of additional scrutiny (like DOT drug tests for sightseeing flights).
 
Tim, that makes a lot of sense.

Thinking about it, providing the plane is probably producing the most risk.
 
Very simply, most of the FAAs general aviation regulation and effort is to prevent you from killing passengers and those on the ground. For all the happy initiatives they really don't give a darn if you kill yourself.

And like in any bureaucracy funded by the public, each time another person is killed by stupidity not their own there has to be a reaction.

Add that the "line" between commercial and noncommercial ops has to be drawn somewhere, and that creative scoundrels are always trying to get around it... you get the torturous gyrations seen in the present case.
 
Neither the phrase or concept of "common purpose" appears anywhere in the regulations. This is a concept invented by prosecutors that they managed to convince judges to accept.

The FAA also has a meaning for "compensation" that I'm sure the IRS would love to have. Why one segment of government is allowed to have an expansive definition and another is not is curious indeed.
 
Jim Logajan said:
The FAA also has a meaning for "compensation" that I'm sure the IRS would love to have. Why one segment of government is allowed to have an expansive definition and another is not is curious indeed.
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We would be paying taxes on our flight hours. :eek:

I never agreed with flight time being "compensation". Obviously I can see how it would be worth something to some people but not so much so to others.
 
The 'flight time is compensation' thing has always struck me as particularly cruel. Building up enough flight time to become employable as a pilot is a pretty brutally expensive endeavor, and many young professional pilots start their careers with a lot of debt for just that reason. Even if we accept (and, with some reservations, I think I do) that pilots who tender their skills to others should be held to a standard higher than the basic 'license to learn' that we get with our private cert, most of the situations that would fall under this rather extreme definition of compensation are so far from what any reasonable adult resident of the US would consider acting 'commercially' or 'professionally' that it just seems vindictive.
 
Scenario:

I and a partner own a business not related to aviation in any way. I am a pilot. Our company buys an airplane. I do all the flying.

If:

a. I have a private pilot license and am passenger current, am I allowed to fly company members wherever, whenever (for business related purposes) as long as I don't get paid for it, even if the company pays for all airplane related expenses (maintenance, insurance, fuel/oil, tie downs/hangars, etc.)

b. everything as in 'a' above, except I have a commercial license (still not getting paid)

c. I have a commercial license and the company is paying me a salary to do the flying even though the company provides the plane and its accompanying costs (and I am one of the owners of the company).

d. I have a private or commercial license and I and/or other company members and/or their families are flying for non-business related purposes and I am not being 'paid' but the company still pays airplane costs, is there any problem with this.

Also, in all the above scenarios, is logging time allowed and/or considered 'compensation.'

I ask this because it's a possible future scenario for me.

Be Well,

Jimmy
 
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I really am not sure about all this, but I'll give an answer to the best of my current knowledge.

a. I have a private pilot license and am passenger current, am I allowed to fly company members wherever, whenever (for business related purposes) as long as I don't get paid for it, even if the company pays for all airplane related expenses (maintenance, insurance, fuel/oil, tie downs/hangars, etc.)
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I don't think this is allowed since it is a company plane and the company is paying expenses. If you are a private pilot, I believe you have to at least pay a share of operating costs. If it was your plane, I think you could fly coworkers to a business meeting and be reimbursed for "travel cost", maybe.

b. everything as in 'a' above, except I have a commercial license (still not getting paid)
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This might be allowed as they are paying for your services (paying being, paying fuel, etc.) and you are not providing the airplane.

c. I have a commercial license and the company is paying me a salary to do the flying even though the company provides the plane and its accompanying costs (and I am one of the owners of the company).
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I think this is OK as they are paying for your services and you are not the one providing the airplane

d. I have a private or commercial license and I and/or other company members and/or their families are flying for non-business related purposes and I am not being 'paid' but the company still pays airplane costs, is there any problem with this.
Click to expand...

I honestly don't know about any of these for sure, but without looking anything up, above is what I was thinking.
 
I think situations b) and c) are certainly legal (at least as far as FAA rules for receiving compensation go). I don't know about a) - I think so, but I'm not sure. d) is a problem, though. I'm pretty sure that if it does not fall with in the 'scope of but incidental to' the business in question, it cannot be operated under part 91 - commercial cert or no.
 
PoppaJimmy said:
So, all joking aside, what is the purpose of this level of regulation? I'm not trying to get political as in 'liberal' vs 'conservative', etc. and I'm not asking about conspiracy or other such theories. I'm asking an honest question about something I don't know. From the FAA perspective, why is 'compensation' so tightly regulated and interpreted?

Be Well,

Jimmy
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There are two real purposes but the FAA doesn't limit their enforcement to just folks who get crosswise to the two. One is the public's lack of knowledge about flying a pilots combined with their expectations of living through a flight. The FAA requires anyone who provides air transportation to the public for a fee to be held to a higher standard than private pilots. Whether or not the rules on this accomplish this reasonable goal is debatable. The second reason is to protect operators who provide air transport while abiding by the rules and limitations the FAA has set up for this. There's a big concern that if any Dick or Harriet pilot could charge for rides the "real" operators would be put out of business. Of course this presumes that the passengers getting cheap transport would be willing and able to pay the higher costs associated with legitimate entities.
 
PoppaJimmy said:
So, all joking aside, what is the purpose of this level of regulation? I'm not trying to get political as in 'liberal' vs 'conservative', etc. and I'm not asking about conspiracy or other such theories. I'm asking an honest question about something I don't know. From the FAA perspective, why is 'compensation' so tightly regulated and interpreted?
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It's all about the FAA's "levels of safety" concept for regulation aviation operations. At each level of flying (unregulated ultralight, Light Sport, "private" flying, noncommon commercial carriage, and common carriage), they increase the level of safety mandated by the regulations. At the lowest levels, where there is no payment for services, they figure folks know that what they get for free is worth what they pay, and they won't jump in an airplane with anyone they don't know. At the highest levels, people are paying for air transportation without having any means to ascertain the qualifications and competence of the crews or the quality of the equipment, and the FAA requires they receive "the highest level of care and foresight humanly possible." In that spectrum, they consider that when folks are paying for the ride, they deserve a higher level of safety. Hence, a big jump in the requirements when money changes hands, no matter how little or how much.
 
PoppaJimmy said:
I and a partner own a business not related to aviation in any way. I am a pilot. Our company buys an airplane. I do all the flying.

If:

a. I have a private pilot license and am passenger current, am I allowed to fly company members wherever, whenever (for business related purposes) as long as I don't get paid for it, even if the company pays for all airplane related expenses (maintenance, insurance, fuel/oil, tie downs/hangars, etc.)
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No. The flight time itself is compensation, since it has value to you as experience applicable to recency requirements and higher certificates/ratings. In theory, if you don't log the time, it's not "compensation." However, since you own the businss and are saving money by not paying a pilot to fly them, given the FAA's extremely strict position on this sort of thing expressed in the Mangiamele letter, the FAA may still say you are receiving compensation.

b. everything as in 'a' above, except I have a commercial license (still not getting paid)
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No problem at all as long as the passengers aren't paying for the ride. Thus, you can haul company personnel and non-paying guests.

c. I have a commercial license and the company is paying me a salary to do the flying even though the company provides the plane and its accompanying costs (and I am one of the owners of the company).
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Same as b.

d. I have a private or commercial license and I and/or other company members and/or their families are flying for non-business related purposes and I am not being 'paid' but the company still pays airplane costs, is there any problem with this.
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The answer would depend on which license you hold. Private? Not legal. CP/ATP? Good to go.

Also, in all the above scenarios, is logging time allowed and/or considered 'compensation.'
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See above. Logged time is officially defined as "compensation." The only question is whether you're allowed to receive compensation for your flying, and the answer would depend on PP vs CP.

I ask this because it's a possible future scenario for me.
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Get your CP -- solves all these problems, and also improves your skills.
 
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Ron Levy said:
No. The flight time itself is compensation, since it has value to you as experience applicable to recency requirements and higher certificates/ratings. In theory, if you don't log the time, it's not "compensation." However, since you own the businss and are saving money by not paying a pilot to fly them, given the FAA's extremely strict position on this sort of thing expressed in the Mangiamele letter, the FAA may still say you are receiving compensation.

No problem at all as long as the passengers aren't paying for the ride. Thus, you can haul company personnel and non-paying guests.

Same as b.

The answer would depend on which license you hold. Private? Not legal. CP/ATP? Good to go.

See above. Logged time is officially defined as "compensation." The only question is whether you're allowed to receive compensation for your flying, and the answer would depend on PP vs CP.

Get your CP -- solves all these problems, and also improves your skills.
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Really helpful. Makes sense and the solution is simple as well (I differentiate here between simple vs easy :wink2:). Thanks.

Be Well,

Jimmy
 
I believe that the only way (a) works is if you have a common purpose with the other employees to make the trip too. I'll try to illustrate:

You're part of a sales team (say you're a pre-sales engineer for Cisco). Your entire team (salesman, you, and a product specialist) has to go meet with a customer. As a private pilot you can fly your team and Cisco can pick up the cost for the airplane as well as pay you your regular salary. This is flying incidental to a business purpose.

You're an HR specialist for Cisco and a private pilot. A salesman comes in and says "Hey, my team needs to go visit a customer and the airlines are on strike today. Can you fly us? Cisco will pay for the rental." You don't have a reason to make this trip, so you cannot fly this even if you don't get paid a dime, because of all the other things (logging the time, the goodwill inside the company, etc) that the FAA considers compensation.

A final note - unless you own the business, most medium-to-small businesses will not let you pilot anyway. My old company had a policy that a person could fly himself (no pax) with a private/instrument, and had to have a commercial/instrument to take any other persons or property along.
 
chucky said:
The 'flight time is compensation' thing has always struck me as particularly cruel. Building up enough flight time to become employable as a pilot is a pretty brutally expensive endeavor, and many young professional pilots start their careers with a lot of debt for just that reason. Even if we accept (and, with some reservations, I think I do) that pilots who tender their skills to others should be held to a standard higher than the basic 'license to learn' that we get with our private cert, most of the situations that would fall under this rather extreme definition of compensation are so far from what any reasonable adult resident of the US would consider acting 'commercially' or 'professionally' that it just seems vindictive.
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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.
 
JeffDG said:
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.
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I absolutely agree - the FAA is off their rocker. SOME people might consider flight time as compensation, but many others who are not trying to build time would not.

I've never been really too concerned about this issue as I steer clear of any of it, though I do have a bone to pick with the FAA over the arbitrary nonsense for color deficiencies policies. That is far more of an issue.

Getting a commercial rating is pretty trivial IMO.
 
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?
 
PoppaJimmy said:
Scenario:

I and a partner own a business not related to aviation in any way. I am a pilot. Our company buys an airplane. I do all the flying.

If:

a. I have a private pilot license and am passenger current, am I allowed to fly company members wherever, whenever (for business related purposes) as long as I don't get paid for it, even if the company pays for all airplane related expenses (maintenance, insurance, fuel/oil, tie downs/hangars, etc.)

b. everything as in 'a' above, except I have a commercial license (still not getting paid)

c. I have a commercial license and the company is paying me a salary to do the flying even though the company provides the plane and its accompanying costs (and I am one of the owners of the company).

d. I have a private or commercial license and I and/or other company members and/or their families are flying for non-business related purposes and I am not being 'paid' but the company still pays airplane costs, is there any problem with this.

Also, in all the above scenarios, is logging time allowed and/or considered 'compensation.'

I ask this because it's a possible future scenario for me.
Click to expand...

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.

Be Well,

Jimmy
 
JeffDG said:
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.
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If you pay $50, that is your share of the expense associated with logging the time.

The FAA goes over and over and over this. Nowhere do they say you have to include some "fudge factor" for the value of the logged time.

Who picked up the tip?
 
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PoppaJimmy said:
From the FAA perspective, why is 'compensation' so tightly regulated and interpreted?
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Because time and time again, people skirt the rules to hold themselves out commercially to do on demand charters, without following the rules.

Like.. buying a logbook for a non-flying customer and logging it as instruction given... while flying that customer all over the place as a part 91 charter pilot.

If you want to make money (or lose less than your fair share) off your friends, then you have to toe the line, because your less scrupulous brethren have ruined it for you.

The underlying premise is that the more people who can be endangered, the more regulation required.. Roughly

Part 91 and part 103
Ultralights (pilot only, weight limits,)
Sport pilot (pilot and one pax,)
Private pilot (more requirements but more privileges)

Part 135 On Demand Charter
FAA oversight, maintenance requirements
Individualized Ops Specs that serve as your company's federal regulations
Commercial pilot.. 100 hr inspections or progressive maintenance
Chief Pilot requirements
More paperwork

Airlines (Part 121 and others)
Above and beyond 135
Much greater FAA oversight, Ops Specs, More paperwork
ATP's
 
PoppaJimmy said:
So, all joking aside, what is the purpose of this level of regulation? I'm not trying to get political as in 'liberal' vs 'conservative', etc. and I'm not asking about conspiracy or other such theories. I'm asking an honest question about something I don't know. From the FAA perspective, why is 'compensation' so tightly regulated and interpreted?
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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.

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.

Does the FAA care if you pretend to be doing people favors when the real purpose is to make money or at least off-set the cost of building time? Read between the lines of this case involving a "good Samaritan" who was just taking a friend's dad to a medical appointment for the answer:

http://www.ntsb.gov/alj/o_n_o/docs/AVIATION/3730.PDF

My favorite line:
Moreover, the respondent has not shown error in the law judge's
assessment that his transporting of that individual in the early
morning hours to Lincoln for admission to a hospital there was
not incidental to a previously planned, though unscheduled, trip
to enable respondent to have his aircraft radio checked out.
Click to expand...

You can just hear Lon Lovitz's voice doing his "yeah, that's the ticket" routine.

But yeah, that flight time is compensation bit is a little hard to swallow even in that context.
 
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Doggtyred said:
Because time and time again, people skirt the rules to hold themselves out commercially to do on demand charters, without following the rules.

Like.. buying a logbook for a non-flying customer and logging it as instruction given... while flying that customer all over the place as a part 91 charter pilot.

*snip*
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What you're talking about here is an issue of part 91 commercial versus part 135. There's no question that that involves compensation, even by a reasonable person's standard. Any time a pilot 'holds out to the public' or whatever the phrase is, part 135 or part 121 becomes relevant. That is, at least in principle, an area where enhanced requirements seem to me reasonable. But considering 'flight time' as compensation is restricting a whole different category of operation.
 
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JeffDG said:
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.
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Jeff, as stupid and tough as the FAA is about PPL compensation, the FARs specifically state that as long as the pilot pays his pro-rata share of the direct expenses for the flight he's OK. Hours logged is not a direct expense.
 
gismo said:
Jeff, as stupid and tough as the FAA is about PPL compensation, the FARs specifically state that as long as the pilot pays his pro-rata share of the direct expenses for the flight he's OK. Hours logged is not a direct expense.
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Assuming, of course, 'common purpose'.:rolleyes2:
 
JeffDG said:
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.
Click to expand...

I dont think that there is case law to support that expanded interpretation.

You have a common purpose and you pay your pro-rata share of the direct expenses you are good.
 
TMetzinger said:
I believe that the only way (a) works is if you have a common purpose with the other employees to make the trip too.
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That's not enough. Read Mangiamele.
http://www.faa.gov/about/office_org...erpretations/data/interps/2009/Mangiamele.pdf

You're part of a sales team (say you're a pre-sales engineer for Cisco). Your entire team (salesman, you, and a product specialist) has to go meet with a customer. As a private pilot you can fly your team and Cisco can pick up the cost for the airplane as well as pay you your regular salary. This is flying incidental to a business purpose.
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It may be incidental, but per Mangiamele, you cannot take the others along if Cisco pays for the flight.

You're an HR specialist for Cisco and a private pilot. A salesman comes in and says "Hey, my team needs to go visit a customer and the airlines are on strike today. Can you fly us? Cisco will pay for the rental." You don't have a reason to make this trip, so you cannot fly this even if you don't get paid a dime, because of all the other things (logging the time, the goodwill inside the company, etc) that the FAA considers compensation.
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Agreed.

My conclusion based on the Mangiamele interpretation and the article linked above is that if you want to fly on business with anyone but yourself in the plane, you really should get the CP (it's not that hard, and it really will sharpen your skills, too).
 
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Capt. Geoffrey Thorpe said:
If you pay $50, that is your share of the expense associated with logging the time.

The FAA goes over and over and over this. Nowhere do they say you have to include some "fudge factor" for the value of the logged time.

Who picked up the tip?
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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.
 
Ron Levy said:
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.

Agreed.

My conclusion based on the Mangiamele interpretation and the article linked above is that if you want to fly on business with anyone but yourself in the plane, you really should get the CP (it's not that hard, and it really will sharpen your skills, too).
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Not only that, but per Mangiamele, you can't take your wife with you on a business trip if the company is paying for either your salary while flying or covering your expenses.

For that matter, better not take any spare parts with you either. You can probably get away with your own tools, but if you leave stuff behind (replacement router or switch in the example), that's carrying property for compensation.
 
gismo said:
Jeff, as stupid and tough as the FAA is about PPL compensation, the FARs specifically state that as long as the pilot pays his pro-rata share of the direct expenses for the flight he's OK. Hours logged is not a direct expense.
Click to expand...

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.
 
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