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5 Answers

Incidental Business Flying Reimbursement w/ Passengers?

Asked by: 10938 views , , , ,
Commercial Pilot, FAA Regulations

Good Morning!

I am a licensed commercial pilot who is considering getting back into flying regularly.  One reason is the desire by my employer (engineering firm) to use general aviation instead of driving to travel for business trips that I am a required staff member.  I have been asked by my employer to research this topic.

The idea is that I would provide an aircraft and fly myself and passengers to business meetings.  Again, I am a required staff member at these meetings.  I would be reimbursed by my employer for the operational costs of the flight.  They have even offered participate in the fixed cost of the airplane.  I would not fly other company employees to meetings that I am not required.

I fully understand the rules from FAR Part 61.113 related to private pilot reimbursement for incidental business without passengers.  Once passengers are carried, then the costs must be pro-rated or the commercial realm is entered.  This is where it gets gray.  Can I fly myself and passengers (I have to be at the meeting anyway) with my commercial certificate under Part 91 and be reimbursed?  I have not come across good guidance about these common purpose flights.  I am holding out to others and these flights are for private carriage.  I don't believe I can fly under the proposed arrangement without getting into Part 135.

I have done research into FAA Legal Interpretations, etc. about the topic.  I've been told I am taking a harsh regulatory approach but I want to make sure what is proposed is legal under Part 91 or Part 135.  This is a complicated topic.  Do you think I am interpertig the rules/regulation properly?  I welcome your thoughts.

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5 Answers



  1. John D. Collins on May 06, 2012

    I believe if you supply the airplane and provide the piloting, then it would most likely be considered a holding out and require that the flight be a part 135 operation. However, if your employer rents or owns the aircraft and hires you to fly the aircraft, this could be conducted under part 91. There are several FAA Chief Counsel Opinions dealing with this matter and you can research this on their website at http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/

    If you want to be absolutely certain, you can submit the options and request an opinion from the Chief Counsel, but expect it to take up to three months to get a formal answer.

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  2. Matthew Waugh on May 10, 2012

    What you describe is technically legal (although you’re right up against the line, so crossing it doesn’t take a very expensive bus ticket).
     
    The common purpose is crucial. If YOU have to attend the meeting, then you can take others along who share a common purpose. Your commercial certificate is irrelevant – since you cannot be paid to be the pilot of a plane you provide. However – everybody who rides with you (as well as you) can put in for reimbursment by the company for THEIR share of the costs – then they pay you their fair share.
     
    You are not holding out to others, and this is not private carriage. Private carriage is transportation for hire where you do not hold out (so if you think you’re holding out then you cannot, de facto, be in private carriage, so your understanding of the regulations is very confused – as is your reading of 61.113). You are using the shared costs exemption that is available to any Private pilot.
     
    There are other issues to consider – insurance is one, most companies legal departments get the screaming willies when transportation by private airplane is mentioned in the same breath as company business.
     
    The line is the “common purpose” – you have to stay in that box. If this works well it’s going to be VERY useful for people to find a common purpose for you to go along and that is when you cross the line. Now – as has been said before – what are the chances of the FAA catching you? Not very likely – but if they do – the outcome is likely not very good.

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  3. watson1b9 on May 12, 2012

    Thanks for the responses!  Matthew, sorry, part of the confusion was from my original post where I believe that I am NOT holding out for services (I left out the NOT).  The commercial operations would be with one customer for the long-term.
    Another part of the situation is that I am exploring the legality of several different scenarios with private or commercial privledges.  I want to keep things legal.  Based on some feedback maybe the operations be acceptable under the private pilot privledges?  Here are the scenarios I’m considering that I welcome feedback on my interpretation of the FAA regs involved:
    1. Solo private pilot operations for incidental business with no passengers.  I procure the aircraft.  I can be reimbursed for the operational costs of the flight per 61.113(b). 
    2. Private pilot operations with common purpose business passengers.  I procure the aircraft.  Do I need to share expenses amongst common purpose business passengers?  Others tell me that 61.113(b) and (c) are exclusive, so if I could fly myself and any required passengers to a business meeting and be compensated for the flight.  There will always be a common purpose to these flights.  Somebody as told me:  “the company pays you to go to a meeting and the airplane costs the same whether it has one person in it or 6. You could not take money from someone directly. You’re simply being reimbursed for the cost of the aircraft. He’s not being paid to take passengers.”  I welcome feedback here on this one.
    3. Commercial pilot operations where I procure the airplane and pilot services.  Becuase the operation it would be for one long-term customer and I was approached by my employer (ref. AC 120/12-A), I consider this a private carriage operation under Part 91.  I could charge for these flights.
    4. Commercial pilot operations where my employer procures the airplane and I provide pilot services.  The consensus is that this is a private carriage operations acceptable under Part 91.  Again, I could charge for these flights.
    5. For situations where I procure the aircraft, do the regulations say anything about compensation for direct non-operational expenses (i.e. hangar fees, insurance)? 
    Do you think my interpretations correct?  If its still not clear then maybe contacting the FAA directly is the way to go.  Thanks again!

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  4. Matthew Waugh on May 14, 2012

    1) is OK – obviously 🙂
    2) I think to be squeaky clean each passenger has to put in for reimbursement and pay you – then you have shared costs. I believe 61.113 (c) applies at all times – hence the everybody has to request money and give it you – so you are only “paying” (through reimbursement) your pro rata share.
    3) I disagree that private carriage does not require an operating certificate. Private carriage WITH NO COMPENSATION can be conducted under Part 91 – but that is not your case – you want to be compensated and the FAA’s Air Carrier Commercial Certificate Determination documents are clear that private carriage requires an operating certificate.
    4) I agree – IF you can show that the aircraft procurement was at arms length – but once you get in a situation where the plane is being rented, but only on the basis that you have passed the owners checkout process it gets very fuzzy, because you are part of the procurement process.
    5) If you own the aircraft then you can only charge direct operating expense – which is why, to some extent, it’s better to rent the plane because then you can be reimbursed for all the costs.
    If your employee is really interested in exploring this then THEY should buy the aircraft, you can act for your employer in procuring the aircraft AND you can rent it from them (at fair market rate) if you want to use it for personal use. Now that involves your employer in a bunch of commitments they may not be comfortable with – but at that point you can be paid to fly the plane anywhere they want, regardless of common purpose.

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  5. DrMack on May 21, 2012

    Aside from the fact that the FAA Chief Counsel has broadly defined “compensation” to mean a long laundry list of “benefits” that accrue to any private pilot when they fly, including the simple fact of logging PIC time, the bigger issue is paragraph (b)(2) and the way it has been interpreted by the Chief Counsel in the Mangiamele legal opinion:

    Op. FAA Ofc. of the Ch. Counsel, Mangiamele (March 4, 2009):
    http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/data/interps/2009/Mangiamele.pdf

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