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FAA issues updated guidance on expense sharing

The FAA is taking new steps to explain the rule that allows pilots to share operating expenses with passengers as apps and online marketplaces have blurred the line between shared flights and for-hire air transportation.

Pilots should understand FAA guidelines for flight sharing versus flights for hire. Photo by Mike Fizer.

In an advisory circular published February 25, the FAA seeks to clarify the constraints of FAR 61.113(c) by providing examples of flight scenarios that are permissible and impermissible. FAR 61.113 covers private pilot privileges and limitations, and FAR 61.113(c) states that “a private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.”

The new guidance comes at a time when the FAA is confronting some online aviation marketplaces for engaging in business practices that the agency believes cross over into air transportation regulated under on-demand air charter provisions. Such flying requires a higher grade of pilot certificate than private pilot, and air carrier certification.

In December, AOPA reported on an FAA enforcement attorney’s warning to online marketplace operator BlackBird Air that, “We have little trouble concluding that the pilots listed on BlackBird’s pilot database selected by the user are transporting persons or property, from place to place, for compensation.” The notification set off a wave of concern among pilots who had signed up to participate in BlackBird’s service. The FAA later said it would not pursue enforcement against individual pilots who had already conducted flights.

BlackBird, whose CEO Rudd Davis strongly disputed the FAA’s interpretation, was acquired in February by Surf Air, a California-based travel air membership business that pairs passengers with “third party aircraft operators.”

Dispelling a myth

Just because a pilot holds a commercial pilot certificate does not mean the pilot can start flying charters—a point of confusion for many pilots that the advisory circular addresses by explaining that piloting privileges are “separate and distinct” from operating authorization.

“A person who holds an ATP Certificate or a Commercial Pilot Certificate may act as PIC of an aircraft operated for compensation or hire and may carry persons or property for compensation or hire. However, most of these commercial operations require the operator to hold a certificate under part 119 authorizing such operations,” the document says.

The 12-page advisory circular contains scenarios that demonstrate how to interpret key regulatory terms such as “sharing expenses,” “compensation,” and “holding out.”

Holding out—a key point of contention with BlackBird Air—refers to communicating to the public a willingness to furnish transportation. The FAA emphasizes that there is “no specific rule or criteria as to how holding out is achieved,” but that advertising and social media postings are indications of the practice.

Email communications could also be a slippery slope. “The FAA would not consider an email among close friends to be holding out. On the other hand, sending an ‘email blast’ to a listserv or every friend, acquaintance, colleague, or contact of the pilot may be considered to be holding out,” the advisory circular cautions.

Dan Namowitz
Dan Namowitz
Dan Namowitz has been writing for AOPA in a variety of capacities since 1991. He has been a flight instructor since 1990 and is a 35-year AOPA member.
Topics: Advocacy, Pilot Regulation, Aviation Industry

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