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Sharing Expenses: Commercial Cruise Or Chartered Op?

Last week we looked at some 'shared expense' situations involving Private Pilots.Last week we looked at some 'shared expense' situations involving Private Pilots. While many pilots believe that when they become Commercial Pilots their troubles of this nature are over, nothing can be farther from the truth. Commercial Pilots have even more issues to resolve.

THE REGS, Part 1
FAR 61.139 says: 'The holder of a Commercial Pilot Certificate may act as pilot in command of an aircraft carrying passengers or property for compensation or hire.' This regulation seems to leave the door open for just about anything. It also seems to say that Commercial Pilots can accept payments for their services as a pilot anytime a customer agrees to pay.

Important: It is what this regulation does NOT say that is more important, and this can be a real pilot trap.

THE REGS, Part 2
FAR 119.1 is an overlapping regulation to 61.139 and these are the rules pertaining to Air Carriers and Commercial Operators (amended on February 26, 1996). Part 119 defines the few operations you can legally conduct with a Commercial Pilot Certificate. With a Commercial Certificate alone FAR 119.1(e) states the true list of legal privileges. They are:

  1. Student Instruction;
  2. Nonstop sightseeing flights in aircraft with 30 or fewer passenger seats and payload capacity of less than 7,500 pounds, that begin and end at the same airport, and are conducted within a 25 statue mile radius of the airport;
  3. Ferry or training flights;
  4. Aerial work operations, including-
    • Crop dusting, seeding, spraying and bird chasing;
    • Banner towing;
    • Aerial photography or survey;
    • Fire fighting;
    • Helicopter construction operations or repair work;
    • Powerline or pipeline patrol;
  5. Sightseeing flights in Hot Air Balloons;
  6. Nonstop flights conducted with a 25 statute mile radius of the airport of takeoff for the purpose of intentional parachute jumps.'
Other possibilities exist for helicopters, but this is the entire list for airplanes. FAR 61.139 should have this list under privileges and limitations of Commercial Pilots, because this list is truly what the legal privileges are. FAR 61.139 alone is false advertising!

Commercial Quiz
Situation 1: A Commercial Pilot flies an airplane carrying a passenger to a basketball game. The operating expense of the flight is $100. The Commercial Pilot charges the passenger $150. The Commercial Pilot pays the expense of the airplane and keeps $50 for his services. Is this a legal situation?

No. Any time a person or property departs from one airport and lands at another airport, when the flight was solicited, a charter flight has occurred. This falls under Part 119 and a Commercial Pilot Certificate alone does not qualify the pilot to make the flight.

Situation 2: A Commercial Pilot flies an airplane carrying a passenger to a basketball game. The operating expense of the flight is $100. The Commercial Pilot charges the passenger $100. The Commercial Pilot pays the expense of the airplane, keeps no money for himself and records the flight in his logbook. Is this a legal situation?

No. According to the FAA -- and backed up in the courts -- this is a violation because the pilot did receive compensation. The compensation was not money, but rather flight-time in the logbook. Any compensation on a flight of this nature is illegal.

Situation 3: A Commercial Pilot flies an airplane carrying a passenger to a basketball game. The operating expense of the flight is $100. The Commercial Pilot and passenger equally share the expense of the flight. Is this situation legal?

Part 61.139 on Commercial Pilot privileges does not make any mention of a Commercial Pilot 'shared expenses flight.' In practice, the FAA allows Commercial Pilots to share expenses as long as the 'intent of the flight' issue is resolved properly. In situation 3 if the sole reason for the trip is to carry a passenger then this situation is illegal. The answer is yes.

Situation 4: A Commercial Pilot who also holds a Flight Instructor Certificate flies an airplane carrying a passenger to a basketball game. The operating expense of the flight is $100. The Commercial Pilot/Flight Instructor charges the passenger $100 for the airplane and also an hourly instruction fee of $20 per hour for two hours and $5 for a new pilot logbook. The passenger pays a total of $145 and the instructor records the flight in the passenger’s just acquired logbook as dual instruction received. The instructor then records the time in his own logbook under dual instruction given and Pilot in Command. Is this a legal situation?

This one is tough. Clearly the instructor is using his instructor certificate to get around the Part 119 restriction. The passenger was not truly a flight student. If he or she really was a flight student, why did the instructor believe that this 'new' student's first lesson needed to be a cross country flight? This will be the FAA's first question. The FAA would surely contend that this is also a violation of Part 119 and an abuse of the Flight Instructor Certificate as well.

Risk And Reward
With full knowledge of the risks some Commercial Pilots try to build flight time using these kinds of flights anyway. So what are the chances of getting caught? The FAA is undermanned and overworked. How can they possibly place every flight and every airport under surveillance? They simply cannot, but chances are if you are regularly violating Part 119 regulations it will not be the FAA who catches you, anyway. The Part 119 operators -- who have spent thousands of dollars on airplanes, advertising, office supplies, telephone systems and pilot training themselves -- are looking to protect their own livelihoods, and will quickly turn you in.

Respect And Compliance
Part 119 operators have spent thousands of man-hours preparing manuals and pilot folders that are acceptable to the FAA. They have put up with surprise FAA inspections and all the petty details they dredge up. They are trying to play by the rules. Then one day you look out your office window and see a small single engine airplane pull up to the FBO and unload passengers with brief cases. Not so good.

Commercial Cruising Or Charter Ops.?
After reading this so far you might feel a little boxed in. There does not seem to be all that many legal ways to build the vital flight time. My advice is to stay away from these 'gray areas' and stick to building time using operations on the list provided by FAR 119.1(e).

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About This Author:
Paul A. Craig is a Gold Seal Multiengine and Instrument Flight Instructor. He currently holds a total of 11 Flight Certificates including his ATP. Craig is a previous winner of the North Carolina and Tennessee Flight Instructor of the Year award, the NCVT Outstanding Teacher award and has served as the regional representative of the National Air and Space Museum. Craig is an FAA Aviation Safety Counselor and the author of eight books, including Pilot In Command, The Killing Zone: How and Why Pilots Die, and Controlling Pilot Error: Situational Awareness (all from McGraw Hill).
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