According to the 14 CFR 1.1, pilot in command means the person who: (1) Has final authority and responsibility for the operation and safety of the flight; (2) Has been designated as pilot in command before or during the flight; and (3) Holds the appropriate category, class and type rating, if appropriate, for the conduct of the flight. In a restatement of sorts, 14 CFR 91.3(a) says the pilot in command of an aircraft is directly responsible for, and is the final authority as to, the operation of that aircraft.
Many of us fly regularly with other pilots and for a variety of reasons including transportation, recreation, instruction, and time building. In such operations, we often neglect to affirmatively or specifically designate a PIC, probably because we believe the role to be obvious or it’s otherwise assumed. However, if there’s an accident, incident, a pilot deviation, or alleged violation, be assured that the insurance company, the FAA, or both are going to make a determination based on available information, and it may be different from what you thought.
During most instructional flights, the FAA considers the CFI is the PIC even if the other pilot is fully qualified and is the sole manipulator of the controls. That doesn’t necessarily mean that the FAA will not violate the other pilot if it’s determined that he or she operated the aircraft. Yes, you read that right. In at least one instance, the FAA, or by extension the NTSB, held that the other pilot was accountable for violating the regs despite him not being the PIC. In an instance where the CFI does not have a medical or is not otherwise qualified to act as pilot in command, the FAA will likely look to hold the other pilot responsible if there’s an actionable event, i.e. a pilot deviation or similar which might lead to an FAA enforcement action. Keep in mind that if there’s a question of competency, such as might be the case in a gear-up landing or ground loop on an instructional flight, the FAA might be inclined to ask to re-examine both pilots.
While it’s generally recommended (Part 91 ops) that pilots agree in advance as to who will be PIC on a particular flight or leg of a flight, such a determination, alone, may not clearly establish who’s in charge in the eyes of the FAA.
What happens when two pilots are on board an aircraft that is type certificated for single-pilot operation? Who is the PIC, and who’s in charge? Well, that largely depends on who’s asking and why, and it may not be as straightforward as you think.