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Career Insight: For hireCareer Insight: For hire

Ins and outs of flying for compensation

Earning a commercial pilot certificate is a huge milestone in an aspiring professional pilot’s career—but being able to be paid to fly comes with the responsibility of understanding the certificate’s limits.
Advanced Pilot October/November 2020
Illustration by Leigh Caulfield

We asked Jared Allen, AOPA Legal Services Plan senior staff attorney, to explain some common points of confusion about what you can—and can’t—do with a commercial pilot certificate.

Becoming a commercial pilot means someone can be paid to fly. But the certificate alone isn’t enough for many types of commercial operations. What is “common carriage” and how does it affect a newly certificated commercial pilot?

It’s critical for all commercial pilots to know that although your commercial pilot certificate allows you to act as pilot in command of an aircraft for compensation or hire, there are many commercial operations—such as those involving “common carriage”—that all pilots are prohibited from conducting unless the operator of the flights holds an air carrier or commercial operating certificate issued under FAR Part 119.

As explained in Advisory Circular 120-12A, a pilot or aircraft operator is engaged in common carriage if (1) “holding out” to the public (by advertising or other means) a willingness to (2) transport persons or property (3) from place to place (4) for compensation or hire. Each of these four elements has been the subject of more than 30 years of litigation and FAA interpretation; however, “holding out” likely has been the greatest pitfall for many pilots.

Any advertisement or offer to perform unauthorized air carrier operations is prohibited.A pilot is said to be holding out if, by any means, the pilot communicates to the public, or any segment of the public, a willingness to furnish air transportation to any person who wants it. As a point of clarification, holding out generally requires that both the flight crew and the aircraft be offered together—rather than, for instance, a commercial pilot offering to be hired by an aircraft owner to fly the owner’s aircraft under FAR Part 91.

Whether a pilot is holding out is determined on a case-by-case basis. There are no specific criteria to follow to avoid holding out, so a pilot must assume the FAA will consider all relevant circumstances to determine whether the pilot is holding out as available to provide transportation to the public. However, as the FAA states in Advisory Circular 61-142, “Historically, pilots have been found to be holding out when advertising services via rolodex, brochures, newspapers, magazines, telephone directories, posters, and website/internet postings.”

Nevertheless, the FAA maintains that there can also be holding out without any advertising at all, such as when a pilot’s conduct earns him or her a reputation that he or she will provide transportation to anyone. In any case, it doesn’t matter whether the holding out generates any success, as any advertisement or offer to perform unauthorized air carrier operations is prohibited.

If common carriage is involved, the flight will typically need to be conducted by an air carrier or commercial operator certificated under FAR Part 119 and following Part 135 (charter) or Part 121 (airline) rules, unless an exception applies. While Part 119 generally applies to operations involving common carriage, there are some very important exceptions listed in FAR 119.1(e) that allow commercial pilots and airline transport pilots to conduct certain flights for compensation or hire without needing an air carrier or commercial operator certificate.

What types of activities can I engage in as a commercial pilot for compensation or hire that are not required to be performed by a certificated air carrier flying under Part 135 or Part 121 rules?

Excluded from the scope of FAR Part 119 are several types of operations that involve the use of an aircraft for compensation or hire, and a commercial pilot can conduct any of these flights without holding an air carrier or commercial operator certificate.

Most of the exceptions are found in FAR 119.1(e) and include common operations such as student instruction, nonstop commercial air tours under FAR 91.147, ferry or training flights, crop dusting, seeding, spraying, banner towing, aerial photography or survey, firefighting, and powerline or pipeline patrol. Additional exceptions are also found in Part 91 Subpart F, which applies to large and turbine-powered multiengine airplanes, and fractional ownership program aircraft.

Although many new commercial pilots may be eager to accept any opportunity that promises to help build flight time, it’s always wise to scrutinize any proposed operation to ensure that it’s excluded from Part 119 requirements, and if not, that the appropriate air carrier or commercial operator certificate is in place.

In the spring, the FAA issued an informational letter to pilots warning against participating in illegal charter operations. What red flags should a commercial pilot watch out for?

The FAA is intensifying its efforts to shut down illegal charter operations, and “dry lease” agreements and online flight sharing services have been the focus of recent investigations. Commercial pilots should understand the legal landscape surrounding these two issues, as pilots are often the starting point for FAA investigations and may face legal enforcement action for their involvement in an illegal charter operation.

With a dry lease, the owner of an aircraft provides the aircraft to a lessee without any flight crew, which is a common and legal arrangement, as long as the lessee is responsible for providing his or her own flight crew and accepts “operational control.” Operational control is defined in FAR 1.1 as “the exercise of authority over initiating, conducting or terminating a flight.” However, in a “wet lease” the lessor provides both the aircraft and the flight crew, and by doing so, retains operational control of the flight. When dry leasing, the lessee may operate the aircraft following Part 91, but a wet lease typically requires certification as an air carrier under FAR Part 119 (91.501 provides some common exceptions).

Common red flags in a lease arrangement are when crew and aircraft are being provided together as a package to a customer, or when any flight crewmember is asked to provide the aircraft. Advisory Circular 91-37B provides several questions intended to clarify the legality of leasing arrangements, but the FAA ultimately determines the validity of lease on a case-by-case basis considering the terms of the lease and how the arrangement works in practice.

Online flight sharing websites also should be an immediate red flag. Although commercial pilots are not subject to the same pro rata cost sharing limitations as private pilots (see FAR 61.113), communications over the internet offering a passenger-carrying flight are almost certain to raise questions about holding out and common carriage. Recently published Advisory Circular 61-142 is a good starting point to help commercial pilots further understand the FAA’s concerns related to websites and social media.

Many FAA investigations concerning an aircraft’s operation begin with the pilots, who may face legal enforcement action if a FAR violation is discovered. While unintentional violations may be resolved with the compliance program (aopa.org/ft/complianceprogram), the FAA expects pilots to know and comply with all FARs. In one recent case, a law judge rejected the arguments of a trio of pilots that their violation of the air carrier rules was the result of a good faith misunderstanding and upheld the revocation of the pilots’ certificates. Pilots who are uncertain as to whether a proposed flight complies with the FARs are encouraged to call the AOPA Legal Services Plan or a qualified aviation attorney to help ensure compliance.

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