Owner/Operator

[Billnye]

Hi everyone,

Brand new here so go easy on me!

Basically, I'm curious if you can own your own aircraft and rent it out for charter, but pilot the charters yourself.

A few of us are considering purchasing an aircraft in the future but would like to be able to rent it out to offset some costs. Most of us have our ppl and ifr certificates. Two of us are working towards a commercial.

I've been told to start looking at part 135, which I've done but wanted to see if anyone on here has done this type of thing or knows the best way to go about this?

 

[dans2992]

Legally, you really need a part 135 certificate to do this.

It's mountains of red tape, especially if you have more than one pilot.

Not to discourage you, but it's a long, difficult, expensive road from what I've heard.

Now, there are some people that will "dry lease" their aircraft to someone and that person needs to provide their own pilot. Of course, they could give them a list of "recommended" pilots who might be available.... This is on the edge of legality from what I've heard, but people do it.

 

[ahkahn]

Yep, part 135.

You could always lease your plane back to a 135 charter operator, and then get on as a pilot with them. Basically you're using their 135 certificate and all of the paperwork they have done. Downside is that you're splitting profit with them, but rightfully so.

You also said "rent it out". If you're renting out for instruction, you are still operating under part 91. The only activity that falls under part 135 is on-demand advertised charter service (ie. advertised call us up and we will fly you from point A to point B for X amount).

You also said that you're all PPL and IFR, and that a couple are working towards commercial. In order to fly it part 135, you'd have to have a commercial... and depending on insurance companies and the specific plane, you may even need an ATP or equivalent experience to fly left seat. We have a part 135 King Air at our home base and that is it's requirement.

 

[flyingron]

Note that the maintenance requirements are stricter for an aircraft in 135 operations so it may take some work to get yours ready and cost you more to keep it there. Also, if you're going to provide or share in the cost of the insurance, understand it is SUBSTANTIALLY higher for 135 operations than for limited commercial (rental, flight instruction) which is much higher than private use insurance.

 

[JHW]

...but would like to be able to rent it out to offset some costs...

actually that's a recipe to increase your cost of ownership, and substantially

 

[Ted]

It depends on the airplane you're buying. I've seen some people successfully do leaseback programs to 135 operators and have a favorable arrangement. However, that's typically on a high end bird (very nice 421C, for instance).

Chances are you're best off just keeping a partnership 91, and adding more partners if you want to defer costs. Renting the aircraft out and providing pilots will require 135 to be legal.

 

[Loveair]

Your plane will fall into the 100 hrs inspections instead of annuals. And your insurance will more than double. If you!re looking to cut cost? Me thinks you're looking in the wrong place.

 

[farmerbrake]

I *THINK* (don't quote me) that in order to fly your plane part 135 on top of everything everyone else has said the pilot needs at least (according to the FARS, insurance could be worse) 500 hrs (plus some actual instrument and xc) for VFR ONLY OPERATIONS. If you want to fly IFR you need something like 1200 hrs (500 xc, and actual instrument)

 

[RotorAndWing]

Your plane will fall into the 100 hrs inspections instead of annuals. And your insurance will more than double. If you!re looking to cut cost? Me thinks you're looking in the wrong place.

Annual inspections are still required, in addition to 100 hour inspections.

 

[bnt83]

Annual inspections are still required, in addition to 100 hour inspections.

We don't even know the make/model yet tho.

Could be a phase type on a Approved Aircraft Inspection Program (AAIP for those who don't know)

AAIP - Operator writes the inspection program and has to get the FAA to approve it, and its revisions.

 

[RotorAndWing]

We don't even know the make/model yet tho.

Could be a phase type on a Approved Aircraft Inspection Program (AAIP for those who don't know)

AAIP - Operator writes the inspection program and has to get the FAA to approve it, and its revisions.

Somehow I don't think he's talking above a light piston twin.

 

[Fearless Tower]

And your insurance will more than double.

This is typically very true. In addition to the other requirements, you will need a commercial insurance policy. My experience getting commercial quotes has been at least double what the premium is for a non-commercial policy on the same aircraft/hull value.

 

[Fearless Tower]

actually that's a recipe to increase your cost of ownership, and substantially

Yep. Leaseback of a small piston to a flight school (if done right), can help defray cost of ownership, but a 135 charter op is a whole 'nother ball game.

You don't do 135 as a side thing to help you save money. The requirements to even get started in 135 are substantial enough to steer you away unless you are doing it full time to make a profit.

The timeframe alone discourages most from going the 135 route. Depending on the FSDO workload, you could be looking at 2 years (current Richmond average) just to go through all the paperwork.

 

[Maverick]

Yep. Leaseback of a small piston to a flight school (if done right), can help defray cost of ownership, but a 135 charter op is a whole 'nother ball game.

You don't do 135 as a side thing to help you save money. The requirements to even get started in 135 are substantial enough to steer you away unless you are doing it full time to make a profit.

The timeframe alone discourages most from going the 135 route. Depending on the FSDO workload, you could be looking at 2 years (current Richmond average) just to go through all the paperwork.

From what I've seen those lease back agreements with a flight school are usually structured in a way that is a great deal for the flight school and not so much for the aircraft owner.

 

[mscard88]

From what I've seen those lease back agreements with a flight school are usually structured in a way that is a great deal for the flight school and not so much for the aircraft owner.

Especially availability for the partners use. One of 'em might want to fly somewhere for a week or two and the lease agreement likely would nix that unless the flight school has a substantial fleet. Not to mention weekend use of their plane as that's when the majority of students fly.

 

[Fearless Tower]

From what I've seen those lease back agreements with a flight school are usually structured in a way that is a great deal for the flight school and not so much for the aircraft owner.

True, but that is why I said 'can be'. There are a ton of variables, but I have seen it work, but you really need to be realistic about expectations. Also need to have the right airplane and right location.

Point being, it may be possible to defray cost of operating through a leaseback, but dang near impossible to do it via the 135 route that the OP was asking about.

 

[midlifeflyer]

Hi everyone,

Brand new here so go easy on me!

Basically, I'm curious if you can own your own aircraft and rent it out for charter, but pilot the charters yourself.

A few of us are considering purchasing an aircraft in the future but would like to be able to rent it out to offset some costs. Most of us have our ppl and ifr certificates. Two of us are working towards a commercial.

I've been told to start looking at part 135, which I've done but wanted to see if anyone on here has done this type of thing or knows the best way to go about this?

If I understand your question, it is whether you can set up a charter operation and also be the charter pilot. If that's the question, the answer is yes. In fact, there's a good chance most Part 135 operators are "mom and pop" shops, although they will for business and liability reasons typically incorporate the charter operation (as with any non-aviation business) which then hires the pilot.

How to go about it? Your best bet it to use a professional who knows the ins and outs. There are some parts of the country where the Part 135 process is better than others. But you can always sit down with an ASI from your local FSDO to get an overview.


OTOH, are you asking whether you can own an airplane, lease the airplane to a charter operation that is not you, and then be hired by the charter operator as a pilot? If so, the answer to that question is yes as well so long as the charter operator is Par 135 and you are a commercial pilot who meets all the requirements. The contractual arrangements for those types of operations tend to be complex to ensure that "operational control" is in the right place from an FAA standpoint.

 

[dell30rb]

actually that's a recipe to increase your cost of ownership, and substantially

Depends on who you are renting it to. Another pilot? I pay about $50/hr dry to rent a privately owned airplane. Works out well for the owner and I.

Maybe that is what the OP should be looking at. Actually if we are talking piston twin I might be interested

 

[Fearless Tower]

Depends on who you are renting it to. Another pilot? I pay about $50/hr dry to rent a privately owned airplane. Works out well for the owner and I.

Maybe that is what the OP should be looking at. Actually if we are talking piston twin I might be interested

He was referring to the 135 route.

 

[kgruber]

Also, even after you receive your 135 certificate, being "chief pilot" can be a lot of continuous paperwork. Sometimes as much as never having the actual time to fly.

 

[flyingron]

This is typically very true. In addition to the other requirements, you will need a commercial insurance policy. My experience getting commercial quotes has been at least double what the premium is for a non-commercial policy on the same aircraft/hull value.

Way more than double. I paid three times for limited commercial (rental/flight instruction). Removing the "limited" from that was even higher.

 

[coloradobluesky]

Towing gliders, sightseeing tours within 25 miles, pipeline patrol, towing banners and instruction can be done under Part 91 rules, but you have to have a Commercial pilots license (not hard to get) and meet the other requirements.

There have been pilots that bought a Cessna 206 and started doing overnight freight bu you have to have a 135 certificate.

There are a lot of rules and a lot of paperwork.

 

[Everskyward]

Then there's the other side of the equation. How marketable is your aircraft? How many customers are you anticipating? Would you be available to fly them when they want to go? If not you are looking at training and hiring someone else.

 

[Fearless Tower]

Way more than double. I paid three times for limited commercial (rental/flight instruction). Removing the "limited" from that was even higher.

That may be due to the flight instruction. A commercial policy for my Waco to sell rides was just about double. Instruction would have been a little more.

 

[Loveair]

Annual inspections are still required, in addition to 100 hour inspections.

You are correct! I misquoted.

 

[hook_dupin]

Hi everyone,

Brand new here so go easy on me!

Basically, I'm curious if you can own your own aircraft and rent it out for charter, but pilot the charters yourself.

A few of us are considering purchasing an aircraft in the future but would like to be able to rent it out to offset some costs. Most of us have our ppl and ifr certificates. Two of us are working towards a commercial.

I've been told to start looking at part 135, which I've done but wanted to see if anyone on here has done this type of thing or knows the best way to go about this?

The 135 outfit I consult for does this with most of our aircraft. Our pitch is that insurance is less than if you leased back to a flight school and renters won't trash it. PM me if interested.

 

[dtuuri]

A few of us are considering purchasing an aircraft in the future but would like to be able to rent it out to offset some costs. Most of us have our ppl and ifr certificates. Two of us are working towards a commercial.

...wanted to see if anyone on here has done this type of thing...

I did earn a single PIC, single aircraft, 135 certificate for my Twin Comanche some years back. I think it only took about two months which was mostly due to needing to reschedule the flight test because of a maintenance problem that occurred at the last minute. Otherwise, I think it could have been done in 30 days.

Having been through the process, I think it would be a terrific educational experience for a group of young owners intending to make their mark in aviation. You will go paragraph by paragraph through all the applicable FARs writing a Letter of Compliance that explains how your company will assure compliance with the regulation. If that's too much work for the educational ROI, better forget about it.

dtuuri

 

[Fearless Tower]

I did earn a single PIC, single aircraft, 135 certificate for my Twin Comanche some years back. I think it only took about two months which was mostly due to needing to reschedule the flight test because of a maintenance problem that occurred at the last minute. Otherwise, I think it could have been done in 30 days.



Having been through the process, I think it would be a terrific educational experience for a group of young owners intending to make their mark in aviation. You will go paragraph by paragraph through all the applicable FARs writing a Letter of Compliance that explains how your company will assure compliance with the regulation. If that's too much work for the educational ROI, better forget about it.



dtuuri

What year was that....and which FSDO?

 

[dans2992]

I did earn a single PIC, single aircraft, 135 certificate for my Twin Comanche some years back. I think it only took about two months which was mostly due to needing to reschedule the flight test because of a maintenance problem that occurred at the last minute. Otherwise, I think it could have been done in 30 days.



Having been through the process, I think it would be a terrific educational experience for a group of young owners intending to make their mark in aviation. You will go paragraph by paragraph through all the applicable FARs writing a Letter of Compliance that explains how your company will assure compliance with the regulation. If that's too much work for the educational ROI, better forget about it.



dtuuri

Can you buy that document, or look at a sample? What do you do other than just re-state the FARs, which would seem to be not very useful?

Did you get a lot of customers for your single pilot 135 service?

 

[dans2992]

The 135 outfit I consult for does this with most of our aircraft. Our pitch is that insurance is less than if you leased back to a flight school and renters won't trash it. PM me if interested.

What kind of aircraft would you need to make this viable? Would a Malibu do, or do you need a multi?

 

[dtuuri]

What year was that....and which FSDO?

In 2000, IIRC, through the Cleveland FSDO. Of course, after 9/11, changes have been made, but the least onerous class of 135 certificate should still be relatively easy. "Relative" is the operative word.

dtuuri

 

[dtuuri]

Can you buy that document, or look at a sample? What do you do other than just re-state the FARs, which would seem to be not very useful?

Did you get a lot of customers for your single pilot 135 service?

Naw, don't do that. First of all, you can download a basic template from the FAA and edit as necessary for free. Secondly, even if you used it verbatim--it wouldn't be good enough because it's only a sample and as you read through it you'll find mistakes or methods you don't want be bound by. Third, repeat "you don't want to be bound by". What sounds reasonable to one author might not at all be reasonable to you. Once the document is approved, you're married to it, for better or worse, until you submit and have changes approved. Better to get it right the first time.

Buying the documents and substituting your own name is what business majors always want to do. Writing them yourself, though, is what directors of operations/maintenance and chief pilots ought to do, using a template to make sure it's being done right. That way, they fully understand what's to be done, why and how to get it done properly.

A few times in the writing of the LOC (Letter of Compliance) I did feel like I was restating the FARs, but not usually. Usually, I found myself finding the template version in need of modification if not out and out incorrect. I think it took me 10 days of non-stop editing for 14 hours per day to cover it all. I went a little farther than most, covering some regs that maybe weren't required, since they weren't in the basic template. I think I was ahead of the game to the point where I could hand over the preliminary LOC upon the initial meeting with the FAA or very soon thereafter, cutting off a lot of time for the FAA to process the application. As I remember, there was only a minor change or two after it was reviewed, not the continuing series of resubmissions I've heard stories about. I like to think that's because I knew my shidt.

IMO, of course.

EDIT: As for the customers I got: I never intended to actually use the Twin Comanche, I just wanted the certificate. At that point I had lost my job when the corporate company I flew for was acquired by non-aviation oriented people who then sold the plane. I figured I could sell the idea of managing a corporate plane for somebody else and offset their costs by putting their plane on my certificate--a hugely successful business model at the time. Unfortunately, the economy tanked then 9/11 hit and I sold my airplane for food, basically. I think I did run maybe two actual trips, more or less as favors.

dtuuri

 

[dans2992]

In 2000, IIRC, through the Cleveland FSDO. Of course, after 9/11, changes have been made, but the least onerous class of 135 certificate should still be relatively easy. "Relative" is the operative word.



dtuuri

Interesting. How much did it end up costing you?

What was the 135 check ride like? Was it with the FAA?

 

[Fearless Tower]

In 2000, IIRC, through the Cleveland FSDO. Of course, after 9/11, changes have been made, but the least onerous class of 135 certificate should still be relatively easy. "Relative" is the operative word.

dtuuri

Relative is right. I can't speak for other FSDO's but like I posted earlier, 2 years is the wait right now here for even a single pilot/single airplane 135. FSDO manning has a lot to do with that.

One of the reasons a lot of folks are selling existing 135 certificates.

 

[dtuuri]

Interesting. How much did it end up costing you?

Oh, gosh, next to nothing except my time. When I bought my plane a few years before, I made sure I found one with recent enough engines to comply with the 12 year Service Bulletin on overhauls. I always had in mind 135 compliance possibilities and it paid off. During the conformity check, the avionics guy wanted me to reposition the ELT, but I was able to dodge that through some "FAA approved" paperwork from the manufacturer. The autopilot required some creative interpretation regarding the number of axis, IIRC, to gain single pilot IFR approval, so that avoided some major expense. It was a very clean plane, paperwork-wise, and when I had to sell it--it went really fast.

What was the 135 check ride like? Was it with the FAA?

Yes, it was with the FAA and the examiner was quite pleased, if I don't say so myself. For me it was challenging, since I had been flying for many years in a crew environment where tasks can be delegated and even single engine performance was pretty routine. The hardest part was flying a coupled approach with an autopilot that had been "interpreted" as meeting the regulation. It's a bit foggy in my memory now, but it seems like maybe I didn't have a glideslope coupler? Whatever, it was a real pain to get used to. Perhaps that's what impressed the POI, .

dtuuri

 

[midlifeflyer]

Relative is right. I can't speak for other FSDO's but like I posted earlier, 2 years is the wait right now here for even a single pilot/single airplane 135. FSDO manning has a lot to do with that.

One of the reasons a lot of folks are selling existing 135 certificates.

I've seen this as well.

 

[RotorAndWing]

One of the reasons a lot of folks are selling existing 135 certificates.

Before anyone gets the idea that Part 135 certificates can be bought, they can't. You can buy the company and the assets, and if it includes a Part 135 certificate, you are OK, to a degree.

If someone says "Here is my Air Carrier certificate, and all my manuals and paperwork, give me 10K and it's yours", then you can't do it.

Another note. Just because you buy ABC Air Charter and get the 135 certificate does not mean you will be in business the next day. There is a process to transfer the certificate (if from another district) and to change management personnel. In many cases it involves a "mini certification" process and if the new owner is not ready can cause many delays.

The last one I dealt with a guy walks in the FSDO one day with a bunch of paperwork and says "I bought ABC out and I'm the new Director of Operations, so I need you to reissue me the OpSpecs and also do a conformity on our new airplane". I sat him down, got out the 8900.1 and went through everything required, which was essentially a rewrite of the GOM, a rewrite of the Training Manual, a rewrite of the Letter of Compliance, an application for new 119 positions, etc, etc.......

Three months later and this guy was still fumbling around submitting incomplete manuals and such. He was convinced he had bought a fully functional certificate and he had even planned (sold?) charter trips before ever contacting the FSDO.

Be careful out there.

 

[Fearless Tower]

Before anyone gets the idea that Part 135 certificates can be bought, they can't. You can buy the company and the assets, and if it includes a Part 135 certificate, you are OK, to a degree.



If someone says "Here is my Air Carrier certificate, and all my manuals and paperwork, give me 10K and it's yours", then you can't do it.

You are of course correct. That is what I meant.

 

[ahkahn]

Before anyone gets the idea that Part 135 certificates can be bought, they can't. You can buy the company and the assets, and if it includes a Part 135 certificate, you are OK, to a degree.

If someone says "Here is my Air Carrier certificate, and all my manuals and paperwork, give me 10K and it's yours", then you can't do it.

Another note. Just because you buy ABC Air Charter and get the 135 certificate does not mean you will be in business the next day. There is a process to transfer the certificate (if from another district) and to change management personnel. In many cases it involves a "mini certification" process and if the new owner is not ready can cause many delays.

The last one I dealt with a guy walks in the FSDO one day with a bunch of paperwork and says "I bought ABC out and I'm the new Director of Operations, so I need you to reissue me the OpSpecs and also do a conformity on our new airplane". I sat him down, got out the 8900.1 and went through everything required, which was essentially a rewrite of the GOM, a rewrite of the Training Manual, a rewrite of the Letter of Compliance, an application for new 119 positions, etc, etc.......

Three months later and this guy was still fumbling around submitting incomplete manuals and such. He was convinced he had bought a fully functional certificate and he had even planned (sold?) charter trips before ever contacting the FSDO.

Be careful out there.

^^^^^ And that, my friends, is the problem with an over-regulated industry. It shouldn't be that difficult. Apply the liabilities to the company and the individuals running the company personally and then back off.

I have a group that I work with on the aviation side that just added a jet to their line. They have literally been working on adding this jet to their 135 certificate for close to 6 months. They have no idea when it will be finished. They showed me the mountains of paperwork... training manuals, pilot books, test flights, etc. I was blown away. WAY TOO MUCH WORK!

Why the heck do you need test flights?!?! If the pilots are certified, and the plane is certified, good enough, no?!?!

I get the good people at the FAA are enforcing the rules, but this is all completely over the top.

 

[RotorAndWing]

^^^^^ And that, my friends, is the problem with an over-regulated industry. It shouldn't be that difficult. Apply the liabilities to the company and the individuals running the company personally and then back off.

I have a group that I work with on the aviation side that just added a jet to their line. They have literally been working on adding this jet to their 135 certificate for close to 6 months. They have no idea when it will be finished. They showed me the mountains of paperwork... training manuals, pilot books, test flights, etc. I was blown away. WAY TOO MUCH WORK!

Why the heck do you need test flights?!?! If the pilots are certified, and the plane is certified, good enough, no?!?!

I get the good people at the FAA are enforcing the rules, but this is all completely over the top.

What's over the top? It's spelled out COMPLETELY in the 8900.1. Like another poster says, go in prepared and the process flows smoothly.

Do you know how many people hire a manual writer, get a generic GOM (or training manual) printed out and send it in to the FAA for approval still in the plastic wrap? They never even took it out and read it. Then the FAA starts finding mistake after mistake, sends it back, the owners sends it back to the writer, the writer "corrects" it and sends it back, again the owner doesn't even read it and gives it to the FAA.

There is a purpose to the LoC and the manuals, but lots of people don't get it nor want to be bothered with it. If you can't produce a document within guidelines explaining how you will operate or how you will train, why do you expect the person who has oversight to approve it??