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A site devoted to aviation law, safety and security.

October 27, 2017

Using An LLC To Own An Aircraft: A Potential Trap For The Unwary.

Do you own your aircraft with a limited liability company ("LLC")? If the LLCs members and/or guests are flying on the aircraft, are you confident that you have structured your ownership and operation in a way that complies with the regulations? If not, you may want to reevaluate how you are doing things and seek some help to address your situation, and to bring your ownership/operation into compliance. With the FAA's increased focus on "illegal charter", "Part 134 1/2 operations", and "flight department companyies", improper structuring of aircraft ownership and operation can leave you in a position with lots of explaining to do to the FAA, and that could result in some unpleasant consequences.

Using an LLC to own an aircraft is perfectly legitimate. And the LLCs' members and guests can use/fly on the aircraft, provided that things are structured the right way. If you would like to learn more on this issue, please read my latest article on the topic: Are You Using A Limited Liability Company To Own An Aircraft And Fly The Company’s Members/Guests? Be Careful.

Posted by Greg

October 23, 2017

Can A Private Pilot Share Expenses With A Passenger?

Yes, in certain circumstances. FAR 61.113(a) tells us 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 of an aircraft." Fortunately, that isn't the end of the story. In addition to other exceptions, Section 61.113(c) says "[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."

Operating expenses fuel and oil consumed on a flight and ramp or tie-down fees at the destination airport, or if the aircraft is rented from an FBO or other third-party, the hourly rental fee plus the cost of fuel, if that is not included in the rental fee. These expenses may be shared. However indirect expenses such as insurance, maintenance, depreciation or other capital costs (e.g. costs of ownership) can not be shared.

Although the amount the pilot and passenger(s) must each pay doesn't need to be calculated penny for penny, according to the FAA if the private pilot pays less than an equal share of the total operating costs or flight, the FAA will assume the private pilot was not actually sharing expenses. So, if you divide the total allowed costs for the flight by the number of people in the aircraft during the flight that should get you close enough to satisfy the FAA.

Also, don't forget that the private pilot and passengers must have a common purpose for the flight as well: they must be flying to the same destination for a common reason. If the private pilot doesn't have any business at the destination, that wouldn't be a common purpose flight. Similarly, building flight time or getting flight instruction isn't a common purpose unless that is the purpose of the passenger(s) as well.

So, as a private pilot you have the opportunity to share expenses in certain limited situations. But if you don't meet the requirements of those exceptions and the FAA finds out, you could be looking at a certificate action.

Posted by Greg

October 13, 2017

Flight School Security Awareness Training: Are You In Compliance?

After 9/11, the TSA determined that flight schools and flight instructors were in a position to help provide security in the aviation environment. As a result, the TSA enacted regulations requiring both flight schools and independent CFIs to receive security awareness training so they could assist in the security functions at general aviation airports.

Unfortunately, security awareness training isn't usually a high priority for flight schools or CFIs. In fact, most haven't even reviewed the regulations to understand exactly what the TSA expects from them. And that could be a problem when a TSA inspector comes to perform an audit of the flight school's or CFI's security awareness training program and records.

So, to help flight schools and CFIs understand their obligations, how to satisfy those requirements, and the potential risks if they are not in compliance, I have written an article to help. You can learn more about this topic by reading my latest article: Flight School Security Awareness Training – Make Sure You Are Both Current And Compliant To Avoid TSA Sanctions.

Posted by Greg

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