In the past week I have had twopeople approach me and explain that they wanted to buy twin-engine airplanes that theycould fly for their own business and pleasure then offer them for charter when theyweren’t using them. On the surface it sounds like a great idea, getting some revenue outof the airplane to help offset the costs of ownership. But before committing to anypurchase based on the expectation of making money with the airplane there is a great dealof research that has to be done.
Often pilots who wish to buy more airplane than they can afford see the leasebackalternative as a way to step up into a higher performance airplane with someone elsehelping to pay the bills. But, as I discussed in my article on leasebacks last month,aircraft owners often get shortchanged on such deals when the lease payments don’t make upfor all of the wear and tear the airplane is exposed to, and are often hamstrung bycontracts that don’t allow them to fly their own airplanes.
The perils of Part 135
Moving from leaseback to charter, many owners don’t realize that there is a wholedifferent set of regulations that pertain to the operation of aircraft for hire. It’scalled FAR Part 135, and it details what is required of an air taxi operator, includingthe qualifications of the pilots who fly charter airplanes, and the aircraft maintenancethat is required when the airplane is offered to paying passengers. Part 135 is far morestringent than the Part 91 regulations under which most of us fly our personal airplanes.Contrary to popular belief, having a commercial pilot certificate is not the onlyprerequisite for charging people for point to point flights. Not by a long shot.
Each airplane on a Part 135 “charter certificate” must be approved by theFAA, and every time an airplane is added or removed from such a certificate, the documentmust be amended and re-approved. How long it takes for the official paperwork to reach theoperator will vary from FSDO (Flight Standards District Office) to FSDO.
Hurry up and wait
I can relate the frustration of one air taxi operator I worked for who obtained a leaseagreement on a Cessna Conquest. The airplane had just come off the air taxi certificate ofanother operator who fell under the jurisdiction of the same FSDO as the company I workedfor. We were quite happy with the new addition to the fleet and felt that since it hadbeen certified in the same FSDO, getting it added to our certificate would only take acouple of weeks. Six months later the owner sold the airplane out of sheer frustrationbecause the airplane had not taken in one dollar of charter revenue. Three or four daysbefore the airplane was flown away by its new owner, I got to take my checkride in it, andwe were finally set up to offer it to our customers.
How could something so routine take so long? Every time my boss submitted the requireddocumentation it would be two weeks to a month before it was returned, and there werealways changes that needed to be made. The original documentation was nearly the same asthe specifications that the airplane had been operated under with the original operator,but that made no difference. Time and again the paperwork was returned, changed, andresubmitted only to require additional changes that weren’t required in the previousgo-around.
So, before you rush out to buy an airplane to offer for charter be prepared for a stintof ownership before any revenue is realized. Perhaps a lengthy one. And that’s assumingthat you’re adding the airplane to an already-existing Part 135 certificate. If you’restarting from scratch and trying to get a new certificate, you might be facing an absolutenightmare. Don’t think you can get a jump on the process before acquiring your airplane,either. The FAA won’t allow you to apply for an air taxi certificate unless you alreadyhave an airplane, or at least a written lease for the use of an airplane that is to beflown on that certificate.
What’s considered charter?
What constitutes air taxi? See the sidebar for FAR119.1, Certification: Air Carriers and Commercial Operators, that details what fallsunder Part 135 and what falls under Part 91. (You might need your lawyer to help you makesense of it, but what else is new?)
Many pilots don’t understand the difference because they are not aware that Part 135,not Part 91, details what is considered charter and what isn’t. There is little in Part 91to alert pilots to the more stringent requirements.
Do you really want to fly under airline rules?
The reason the air taxi rules are so tough nowadays is because the FAA is attempting tostandardize the rules for all commercial aircraft. “One level of safety” is thenew battle cry at 800 Independence Avenue. That means the rules for Part 135 have becomeremarkably similar to Part 121, the set of rules the commercial airlines operate under.
For instance, operators under Part 121 and Part 135 are not allowed to fly aninstrument approach to an airport where there is no approved weather reporting. Thatdoesn’t present a problem for the airlines, because with very few exceptions the airportsthey operate to and from have weather reporting capability. But for many years charteroperators were hamstrung by the “approved weather” rule because they flew intogeneral aviation airports that did not have weather reporting. In effect that rule madeoutlaws of many operators because they flew instrument approaches to airports that did nothave any weather reporting in spite of the rule.
I never could understand that one because it effectively cut general aviation’sflexibility when the weather was IFR. Instead of giving the operator the option of flyingan approach into a general aviation airport, the rule effectively meant that air taxiairplanes either had to scud run or land at larger airline-dominated airports, therebyadding to the congestion and controller workload (not to mention inconveniencing thepassengers).
This problem has eased somewhat over the last few years with the installation of AWOSand ASOS weather reporting facilities. No matter that many of them are not accurate. Thefact that they are there means that an air taxi operator can fly the approach legally.
Paperwork by the pound
Another “standardized” area is the FAA-required operations manual thatdetails the certificate holder’s policies and procedures, which must be approved by theFAA. When I first started flying charter in the early 1970s, the manual was not toodifficult to deal with. But over the years the manual requirements have been”upgraded” to the point that it is now a paperwork nightmare for the persontasked with compiling it, not to mention the pilots and mechanics who are supposed to useit for guidance. Reading through one of today’s air taxi ops manuals, you would think youwere flying a Boeing 747 instead of a light plane.
Many operators elect to buy a manual from another operator or from a consultant whosupposedly has the inside track on getting them approved. But these generic manuals seldompass muster on the first reading, and wind up being iterated back and forth between theFAA inspector and the company several times before approval is granted. And, as I pointedout earlier, it can take weeks and months just to get a revision reviewed only to findthat it still is not satisfactory.
Aircraft and pilot requirements
For many years, Part 135 operators were not allowed to use single-engine airplanes forpassenger carrying when the weather was IFR. That is about to change, though the rulechange will require those airplanes to have dual alternators and dual vacuum sources. Thatwill eliminate most of the light airplanes in the fleet and leave the high performancesingles that can be or are fitted with the proper backup systems. I think the reason thatrule was changed was to allow the single-engine turboprops like the Cessna Caravan to beused by commercial operators rather than the traditional piston engine singles.
Pilot qualifications are another matter. Possessing a commercial ticket and instrumentrating are not enough. For instrument operations the pilot must have a minimum of 1,200hours flying time, 500 hours cross-country time, 100 hours night time, and 75 hours ofactual or simulated instrument time, at least 50 hours of which were in flight. The airmenqualifications are buried in FAR part 135.243 and many who aspire to fly passengers forhire are not aware of that rule’s existence.
As always, do your homework
So, if you are planning on buying an airplane that you will offer to others for hire,make certain you do your homework. It is not a simple matter of owning an airplane andhaving a commercial ticket and instrument rating in your pocket. You must read through FARParts 119 and 135 before going ahead with your plan so you will understand the rules andhow they will apply to your operation. Then, contact your local FSDO for information onhow to apply for an air-taxi certificate. Be prepared for a long, hard struggle.
If you think you can circumvent the rules and carry paying passengers without goingthrough the FAA’s hoops, read FAR135.7 (see the sidebar).Also, your insurance company will get into the act. If you are flying passengers for hireand an incident or accident occurs, it is likely that you will not be covered under your”personal and business” policy. Commercial insurance is required for that typeof operation, and it ain’t cheap.
