Pilot Counsel:

Private vs. commercial operations

November 1, 2011

John YodiceAt AOPA’s Aviation Summit in Hartford, Connecticut, I was reminded that general aviation pilots still wrestle with who and what they can legally carry in their aircraft without running afoul of the commercial regulations. The question that caused the most consternation was whether a pilot flying incidental to his/her business or employment could legally carry other employees, customers, or passengers in connection with that business or employment. There is a relatively recent interpretation by the FAA Chief Counsel (2009-7) on that point.

Pilots understand that there is an important regulatory difference between “private” and “commercial” operations. The FAA regulates both for safety, but commercial operators have additional costly and burdensome regulation beyond the general operating and flight rules of FAR Part 91, and other rules. We all can easily recognize the classic private operation, which is a pilot flying his or her own aircraft (or a rented or borrowed aircraft) for his or her own purposes, specifically including carrying passengers. This is classically one within the privileges of a private pilot certificate (and may also be conducted by commercial and ATP pilots exercising the lesser “private” privileges implicitly included in their certificates). At the other end of the spectrum, we easily recognize the classic commercial operation such as those conducted by the airlines, air taxi operators, charter, et cetera, by those engaged in the business of carrying persons or property for compensation or hire.

It is the gray area in between private and commercial operations that raises many questions. FAR 61.113 provides the general rule that “no person who holds a private pilot certificate may act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as pilot in command.” The rule then goes on to permit some operations that might otherwise be considered commercial operations. Some familiar examples: A private pilot (or a commercial/ATP pilot exercising private privileges) may, under limited circumstances, share the expenses of a flight with his passengers (the pilot is technically receiving compensation even though it is only the passengers’ pro rata share of direct operating costs). A private pilot may carry passengers in a charitable airlift that technically involves “compensation or hire,” but to the benefit of the charity. Similarly, within the specific terms of the rule, search and location operations are permitted, as are the flights of an aircraft salesman, and towing a glider or ultralight.

What was discussed at Summit was the part of the rule that allows a pilot, for compensation or hire, to act as pilot in command of an aircraft in connection with any business or employment if “the flight is only incidental to that business or employment” and “the aircraft does not carry passengers or property for compensation or hire.” Everyone understood that FAR 61.113 covers the pilot businessman and employee. But many balked at the FAA position that the pilot businessman/employee may not legally transport employees, customers, or other passengers in connection with that business or employment.

Unfortunately, the FAA chief counsel interpretation supports the FAA position. The interpretation addresses the scenario of a director of vehicle testing (not related to air transportation) who on occasion uses his aircraft, a Bellanca Super Viking, for transportation to business meetings. The questions addressed were whether the director could be reimbursed for the cost of this transportation, and to what extent he may be reimbursed if he also transports coworkers to these business meetings.

The FAA chief counsel opined that where the director only transported himself to the business meeting, the director may, under the “incidental” part of the rule, be compensated for the expense of the flight. That is the positive part of the interpretation. But the chief counsel, in considerably narrowing the interpretation, opined that the rule would not allow the director to seek reimbursement from his employer for transporting his colleagues to the meeting. According to the chief counsel, the rule only allows the director to use his private pilot certificate for compensation or hire if the operation is incidental to the director’s employment and only if the director is not transporting other passengers or property. Thus, because the director is transporting people to the meeting, he may not seek reimbursement from his employer for this flight.

The interpretation says the “shared expense” would not apply because it only allows reimbursement from fellow passengers, not a third party, such as the employer. “You [the director] may only seek reimbursement for the operating expense of the flight from your passengers, provided you pay your own pro rata share of the operating expenses, and you all share a common purpose, such as attending the business meeting.”

I could agree with the interpretation if the sole reason the pilot was going on the trip was to transport his colleagues, and not for his own business or employment purpose in attending the meeting. Otherwise, I respectfully disagree. The pilot is only being reimbursed for the cost of his carriage. Carrying his colleagues does not add to the cost of the trip. I believe a more reasonable interpretation is that the colleagues are not being carried “for compensation or hire” on this common-business-purpose flight, and the “incidental” exception should apply.

John S. Yodice is a private pilot who owns a Cessna 310.

John S. Yodice