Pilot Counsel

Charitable flights

March 1, 1996

An FAA legal interpretation that is circulating may cause unnecessary concern among pilots and aircraft owners who contribute their services for charitable or humanitarian flights. These flights include good works such as transporting poor, sick, or injured people to medical treatment facilities and transporting blood or human organs and the like. There are a number of fine organizations that promote and sponsor these flights.

The 1993 interpretation says that a pilot is in violation of the Federal Aviation Regulations if he or she receives any reimbursement for the expenses of a charitable flight or takes a tax deduction for the expenses.

What is not commonly known is that since the issuance of this interpretation, the FAA has had a change of heart regarding the tax deduction aspect of the interpretation — but not the reimbursement aspect. The FAA now, as a matter of policy, will not consider the charitable deduction of such costs as constituting compensation or hire for purposes of enforcing the FARs. However, the policy statement makes it clear that "if taking a charitable tax deduction for transporting persons or property is coupled with any reimbursement of expenses, or other compensation of any kind, then this policy does not apply."

At the root of the problem is the legal difference between the private operation of an aircraft and the commercial operation of an aircraft. Commercial operators are more stringently regulated than are private operators. For example, commercial operators of smaller aircraft must comply with Part 135 of the FARs in addition to the general operating and flight rules of Part 91 for private operators.

The FARs define a commercial operator as one "who, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property." It is the legal concept of compensation or hire that distinguishes the private from the commercial operator.

This distinction follows through in the rule which specifies the privileges and limitations of a private pilot certificate, FAR 61.113. What it says is that "a private pilot may not act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may he, for compensation or hire, act as pilot in command of an aircraft." (There are exceptions that we have talked about in this column from time to time, as for example, sharing expenses.)

So, under the rule, a private pilot (and a commercial or ATP pilot engaged in a private operation) may fly a sick person to a distant hospital, or human organs for transplant, without running afoul of FAR 61.113, so long as there is no compensation or hire. And an organization may sponsor such flights without running afoul of FAR 135. Be careful, though. FAA interprets "compensation or hire" very strictly, to include anything of value — even, at one time, a tax deduction value for a charitable contribution.

The National Transportation Safety Board decision on which the FAA interpretation is based provides a good illustration of this concept. This is a case in which a private pilot lost his certificate for 30 days (the FAA originally had ordered revocation) because he violated FAR 61.113 and FAR 135.5. The FAA charged him with three incidents, characterizing them as "charter flights conducted in a Beechcraft Baron without an FAR 135 certificate."

In the first incident, the pilot was charged with transporting a lady from Imperial, Nebraska, for a medical appointment. She was in pain because of a problem with her hip, and it was determined that a short flight was preferable to a six-hour automobile trip. After the trip, the pilot requested and received a 50-percent reimbursement for the expenses of the trip — $383.60. The judge would not consider this an expense-sharing flight because there was no "common purpose" (we explained this in "Pilot Counsel: Sharing Expenses," March 1995 Pilot), even though the pilot said he was going to make a stop at Grand Island for dinner at a famous restaurant.

In the second incident, on behalf of a school foundation the pilot picked up a speaker at the Denver airport and transported him to Imperial to give a speech and seminar. He then flew the speaker back to Denver. He submitted a statement, to be signed by the foundation, showing that he had donated total expenses of $2,079.33. The judge apparently considered the deduction to be compensation.

The third incident involved the medical emergency transportation of a friend's sick father from Imperial to Lincoln for admission to a hospital there. It was feared that he was suffering kidney failure. There was no commercial operator in Imperial who could have provided the transportation. The pilot submitted a bill for the full cost of the trip, in the amount of $1,282.38, which was paid.

The pilot appealed the FAA order of revocation to the NTSB. At the hearing the law judge reduced it to a 180-day suspension because he could find no justification or precedent for so severe a sanction as revocation. The full Board reduced the suspension even further to 30 days because it found the first two incidents stale and dismissed them — the FAA had brought the charges too long after the incidents — and because of the mitigating circumstances of the third and only remaining incident upon which to impose a sanction.

Two more points. Among the four exceptions specified in FAR 61.113 is the exception for sponsored charitable airlifts. Under this exception, a pilot may act as pilot in command of an aircraft in such a program even though the passengers may make donations to the organization (and hence "compensation or hire").

But there are some strict limitations. The sponsoring organization must be a tax-exempt organization recognized by the Internal Revenue Service. The FAA must be notified seven days before the flight and must approve the airport. The pilot must have logged at least 200 hours of flight time. The aircraft must have a standard category airworthiness certificate and a current 100-hour inspection. And the flight must be made under VFR during the day; no aerobatic or formation flying is permitted.

The FAA has granted to the Civil Air Patrol an exemption from FAR 61.113 to allow for reimbursement of fuel, oil, and maintenance costs incurred in search and location operations. Some years ago, a very few similar exemptions were granted to organizations sponsoring humanitarian and charitable flights; but, as far as we can determine, these have expired and none are currently being granted. According to The Air Care Alliance, a nationwide league of humanitarian flying organizations, the FAA, as early as this summer, might again consider granting exemptions to allow some reimbursement to pilots and aircraft owners participating in humanitarian flights.

The bottom line: flying public benefit missions is a wonderful way to serve your communities — and the expenses often can be tax deductible — but it is best to be sure that you are following the rules.

John S. Yodice