New AC from the FAA on compensation

Thanks for sharing. That clears a few things up, at least for me.
 
Is this any change in rules or just a better definition. I’m surprised that advertising on a “small” closed fb book club page is not holding out but Fred going to Florida doesn’t advertise a thing is holding out. I thought Fred was a better example of common purpose.
 
AOPA I think had published something awhile back that one could calculate insurance, maintenance, hangar, etc in the operating expenses. I guess they will have to revise that!
 
So, if I just get a commercial certificate and a 2nd class medical, I can not worry about expense sharing issues? Do I even have to share expenses? I have friends that would happily pay 100%.
 
Morgan3820 said:
So, if I just get a commercial certificate and a 2nd class medical, I can not worry about expense sharing issues? Do I even have to share expenses? I have friends that would happily pay 100%.
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“Conversely, a person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft for compensation or hire and may carry persons or property for compensation or hire if the pilot is qualified in accordance with part 61 and the requirements that apply to the operation being conducted (e.g., 14 CFR part 135).”
 
ktup-flyer said:
Same ****, different smell.
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Yeah. I haven’t read it word for word yet, but at first glance it sounds like same scenarios we’ve known about for a while. Private pilot students understand the pro-rata share idea, but are quite surprised when I tell them about “intent”.


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benyflyguy said:
Is this any change in rules or just a better definition. I’m surprised that advertising on a “small” closed fb book club page is not holding out but Fred going to Florida doesn’t advertise a thing is holding out. I thought Fred was a better example of common purpose.
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It might be an example of common purpose, but holding out is the issue that could make it a violation.
 
Morgan3820 said:
So, if I just get a commercial certificate and a 2nd class medical, I can not worry about expense sharing issues? Do I even have to share expenses? I have friends that would happily pay 100%.
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Ha! We'll see how much of a "friend" they are when you tell them they're accepting operational control and are 100% responsible for the mistakes you make. :) Essentially, that makes you their corporate pilot. Or, otherwise, makes you their illegal air carrier. Their choice or yours, respectively.
 
Morgan3820 said:
So, if I just get a commercial certificate and a 2nd class medical, I can not worry about expense sharing issues? Do I even have to share expenses? I have friends that would happily pay 100%.
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You can’t do that. This AC addresses a private pilot sharing expenses. It does not discuss providing commercial pilot services, and operating as a Commercial Operator. As a holder of a commercial certificate you can provide pilot services for compensation or hire. You cannot act as a Commercial Operator unless you obtain the proper operating certificate.

  1. Commercial Operator. A person who, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property, other than as an air carrier or foreign air carrier or under the authority of 14 CFR part 375.
For what you are talking about it looks like you need a Part 119 certificate. If you are flying just a few friends, and not holding out to the general public, then a Part 119 certificate is fine but if you open it up to anyone, then you need to be operating as Part 135; scheduled flights is Part 121.
 
benyflyguy said:
Is this any change in rules or just a better definition. I’m surprised that advertising on a “small” closed fb book club page is not holding out but Fred going to Florida doesn’t advertise a thing is holding out. I thought Fred was a better example of common purpose.
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It is basically a summary of existing rules with references to NTSB cases, federal appeals and Chief Counsel interpretations. If you read through some of the examples near the end, you an even see the areas which are grey.

There's really nothing new other than the fact that it is being collected and explained in one place. That by itself is going to be a plus for many.
 
FlyingMonkey said:
AOPA I think had published something awhile back that one could calculate insurance, maintenance, hangar, etc in the operating expenses. I guess they will have to revise that!
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I don't recall anything from AOPA ever saying that and I can't even imagine they would. The limitation to "the expenses involve only fuel, oil, airport expenditures, or rental fees" is not an interpretation, but directly out the the regulation. Got a reference?.
 
JScarry said:
You can’t do that. This AC addresses a private pilot sharing expenses. It does not discuss providing commercial pilot services, and operating as a Commercial Operator. As a holder of a commercial certificate you can provide pilot services for compensation or hire. You cannot act as a Commercial Operator unless you obtain the proper operating certificate.

  1. Commercial Operator. A person who, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property, other than as an air carrier or foreign air carrier or under the authority of 14 CFR part 375.
For what you are talking about it looks like you need a Part 119 certificate. If you are flying just a few friends, and not holding out to the general public, then a Part 119 certificate is fine but if you open it up to anyone, then you need to be operating as Part 135; scheduled flights is Part 121.
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Ok, so if I fly for a nonprofit environmental group locally looking for polluters, do I or do I not benefit from getting my commercial certification? They pay for some of the rental, I pay for some. It sounds that no matter which way it goes unless I pay 100% I am in violation.
 
Morgan3820 said:
So, if I just get a commercial certificate and a 2nd class medical, I can not worry about expense sharing issues? Do I even have to share expenses? I have friends that would happily pay 100%.
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You read the AC and somehow came to that conclusion?
 
JScarry said:
You can’t do that. This AC addresses a private pilot sharing expenses. It does not discuss providing commercial pilot services, and operating as a Commercial Operator. As a holder of a commercial certificate you can provide pilot services for compensation or hire. You cannot act as a Commercial Operator unless you obtain the proper operating certificate.

  1. Commercial Operator. A person who, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property, other than as an air carrier or foreign air carrier or under the authority of 14 CFR part 375.
For what you are talking about it looks like you need a Part 119 certificate. If you are flying just a few friends, and not holding out to the general public, then a Part 119 certificate is fine but if you open it up to anyone, then you need to be operating as Part 135; scheduled flights is Part 121.
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Your Insurance company might have something to say about using your plane for hire.
 
the way i see it, from that AC the rides needed/empty seat sections on the oshkosh and SNF websites are now verboten.
 
MauleSkinner said:
But as stated in the AC, you must comply with appropriate regulations, probably under 119/135.
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So, If I get someone to pay for the rental at the flight school, an approved commercial operation, that is ok? Assuming the afore mentioned CPL.
FWIW, I am not being flip in this line of questioning.
 
what about under the table cash for PPL?




FAA - I am kidding
 
Ryanb said:
View attachment 83129
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Wow the FAA is clearly misguided with this gem:

Prohibited Expenses. Any expenses not specified in § 61.113(c) must be paid by the pilot. Examples of these include, but are not limited to, aircraft maintenance, aircraft insurance, aircraft depreciation, and navigation charts.

They even recognize those costs as “expenses” yet they won’t come out with an opinion that such expenses are actually expenses. If my bird costs $100/hr to operate then it’s $100/hr divided by how many souls are on board. How is that not a common sense and practical approach?

Yet they’ll put out a letter like “Coleal” and allow a pilot owner to perform any simple maintenance tasks outside of the specific ones listed in 43.3 Appendix A.
 
Morgan3820 said:
So, If I get someone to pay for the rental at the flight school, an approved commercial operation, that is ok? Assuming the afore mentioned CPL.
FWIW, I am not being flip in this line of questioning.
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Unless the flight school has a Part 135 certificate and you’re trained and tested under that certificate, no.

keep in mind that this reg addresses Private Pilot privileges and limitations. Absolutely no inferences about privileged and limitations of other certificate levels can or should be inferred from it.
 
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YooperMooney said:
Wow the FAA is clearly misguided with this gem:

Prohibited Expenses. Any expenses not specified in § 61.113(c) must be paid by the pilot. Examples of these include, but are not limited to, aircraft maintenance, aircraft insurance, aircraft depreciation, and navigation charts.

They even recognize those costs as “expenses” yet they won’t come out with an opinion that such expenses are actually expenses. If my bird costs $100/hr to operate then it’s $100/hr divided by how many souls are on board. How is that not a common sense and practical approach?

Yet they’ll put out a letter like “Coleal” and allow a pilot owner to perform any simple maintenance tasks outside of the specific ones listed in 43.3 Appendix A.
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Yep, that's a little tough to swallow, especially when you figure as a renter, those costs are wrapped up into the rental fee, and I can split it.

I like this document though, I was under the mistaken impression that I could only split fuel costs instead of rental costs.
 
YooperMooney said:
They even recognize those costs as “expenses” yet they won’t come out with an opinion that such expenses are actually expenses.
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An AC is not an “opinion”, it’s a statement of established policy. In the case of your statement, no “opinions” are necessary, either...the reg says these expenses can’t be part of the pro rata compensation.

An AC is going to change neither a regulation nor a long-standing legal interpretation.
 
So other than people blatantly trying to do for-profit flights without a commercial certificate and people trying to do iffy ride-sharing arrangements is this realistically something private pilots really need to worry about?

I think that what I'm going to dub the Cowman private pilot compensation guide is still correct...
1. Don't fly for profit.
2. Don't advertise.
3. If someone does kick in some gas money or buy your meal for god sakes don't go blabbing about it.
4. Especially don't talk about it on social media.

The only reason this rule doesn't just say you can't take any money period is so that you and your buddies can go on the fishing/hunting/sportsball/dinner/etc trip and they can kick in some share of the fuel cost. Is that basically what you're doing? Then just do it and shut up about it, nobody cares.
 
Morgan3820 said:
Yup. PPL cannot receive compensation. CPL can receive compensation.
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Did you miss this part?

a person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft for compensation or hire and may carry persons or property for compensation or hire if the pilot is qualified in accordance with part 61 and the requirements that apply to the operation being conducted (e.g., 14 CFR part 135). Refer to §§ 61.133(a) and 61.167(a).

Distinction Between Pilot Privileges and Operational Authority. The privileges and limitations conferred upon pilots are separate and distinct from the operational authority required to conduct the flights. A person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft operated for compensation or hire and may carry persons or property for compensation or hire. However, most of these commercial operations require the operator to hold a certificate under part 119 authorizing such operations. Therefore, in addition to ensuring compliance with the applicable pilot privileges and limitations in part 61, a pilot must also ensure that the appropriate operational authority has been granted prior to conducting any operation. Unless there is a valid exception from operational certification,5 pilots may not engage in common carriage unless they are operating in accordance with an Air Carrier Certificate or Operating Certificate issued under part 119.
​
In English, there is a difference between the privileges of a commercial "pilot" certificate and the requirements for engaging in a commercial "operation." If you fly for compensation, you are exercising a "commercial pilot" privilege. If you (or your company) provide both pilot and airplane to transport other people or their property for compensation, you are engaged in a "commercial operation." If you remember your commercial written and oral, FAR 119.1(e) has a list of commercial "operations" that do not require an operating certificate - that's the limit of what you an do with just your commercial certificate.
 
midlifeflyer said:
Did you miss this part?

a person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft for compensation or hire and may carry persons or property for compensation or hire if the pilot is qualified in accordance with part 61 and the requirements that apply to the operation being conducted (e.g., 14 CFR part 135). Refer to §§ 61.133(a) and 61.167(a).

Distinction Between Pilot Privileges and Operational Authority. The privileges and limitations conferred upon pilots are separate and distinct from the operational authority required to conduct the flights. A person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft operated for compensation or hire and may carry persons or property for compensation or hire. However, most of these commercial operations require the operator to hold a certificate under part 119 authorizing such operations. Therefore, in addition to ensuring compliance with the applicable pilot privileges and limitations in part 61, a pilot must also ensure that the appropriate operational authority has been granted prior to conducting any operation. Unless there is a valid exception from operational certification,5 pilots may not engage in common carriage unless they are operating in accordance with an Air Carrier Certificate or Operating Certificate issued under part 119.
​
In English, there is a difference between the privileges of a commercial "pilot" certificate and the requirements for engaging in a commercial "operation." If you fly for compensation, you are exercising a "commercial pilot" privilege. If you (or your company) provide both pilot and airplane to transport other people or their property for compensation, you are engaged in a "commercial operation." If you remember your commercial written and oral, FAR 119.1(e) has a list of commercial "operations" that do not require an operating certificate - that's the limit of what you an do with just your commercial certificate.
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And they probably put that in the AC not because this reg addresses commercial privileges or operations, but because so many people think this reg somehow establishes commercial pilot privileges or limitations.

the AC appears to be written to address common fallacies as much as put the interpretations into a single spot.
 
MauleSkinner said:
And they probably put that in the AC not because this reg addresses commercial privileges or operations, but because so many people think this reg somehow establishes commercial pilot privileges or limitations.

the AC appears to be written to address common fallacies as much as put the interpretations into a single spot.
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Agreed, although I think the two go hand-in-hand. It's difficult to do one without the other.
 
midlifeflyer said:
Did you miss this part?

a person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft for compensation or hire and may carry persons or property for compensation or hire if the pilot is qualified in accordance with part 61 and the requirements that apply to the operation being conducted (e.g., 14 CFR part 135). Refer to §§ 61.133(a) and 61.167(a).

Distinction Between Pilot Privileges and Operational Authority. The privileges and limitations conferred upon pilots are separate and distinct from the operational authority required to conduct the flights. A person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft operated for compensation or hire and may carry persons or property for compensation or hire. However, most of these commercial operations require the operator to hold a certificate under part 119 authorizing such operations. Therefore, in addition to ensuring compliance with the applicable pilot privileges and limitations in part 61, a pilot must also ensure that the appropriate operational authority has been granted prior to conducting any operation. Unless there is a valid exception from operational certification,5 pilots may not engage in common carriage unless they are operating in accordance with an Air Carrier Certificate or Operating Certificate issued under part 119.
​
In English, there is a difference between the privileges of a commercial "pilot" certificate and the requirements for engaging in a commercial "operation." If you fly for compensation, you are exercising a "commercial pilot" privilege. If you (or your company) provide both pilot and airplane to transport other people or their property for compensation, you are engaged in a "commercial operation." If you remember your commercial written and oral, FAR 119.1(e) has a list of commercial "operations" that do not require an operating certificate - that's the limit of what you an do with just your commercial certificate.
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Whatever...
 
This is what they spend their time on, well I feel safer
 
A CPL holder can fly for compensation in a plane provided and controlled by a third party. He is just he buss driver. I have made some nice money flying people around in their aircraft. The only control I over the flight I would exercise is safety of flight items, gross weight limitations, and places where we could legally go (usually international).
 
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