Using Your Airplane for Charter
It might sound like a great idea for generating revenue with your airplane when you're not using it for business or pleasure. But the requirements of Part 135 are so complicated and demanding nowadays that by the time you learn what's involved, you might wish you hadn't asked. AVweb's Brian Jacobson takes you for a quick tour of the FAA's Air Taxi regulations.
In the past week I have had two people approach me and explain that they wanted to buy twin-engine airplanes that they could fly for their own business and pleasure then offer them for charter when they weren't using them. On the surface it sounds like a great idea, getting some revenue out of the airplane to help offset the costs of ownership. But before committing to any purchase based on the expectation of making money with the airplane there is a great deal of research that has to be done.
Often pilots who wish to buy more airplane than they can afford see the leaseback alternative as a way to step up into a higher performance airplane with someone else helping 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 up for all of the wear and tear the airplane is exposed to, and are often hamstrung by contracts 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 whole different set of regulations that pertain to the operation of aircraft for hire. It's called FAR Part 135, and it details what is required of an air taxi operator, including the qualifications of the pilots who fly charter airplanes, and the aircraft maintenance that is required when the airplane is offered to paying passengers. Part 135 is far more stringent 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 only prerequisite 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 the FAA, and every time an airplane is added or removed from such a certificate, the document must be amended and re-approved. How long it takes for the official paperwork to reach the operator 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 lease agreement on a Cessna Conquest. The airplane had just come off the air taxi certificate of another operator who fell under the jurisdiction of the same FSDO as the company I worked for. We were quite happy with the new addition to the fleet and felt that since it had been certified in the same FSDO, getting it added to our certificate would only take a couple of weeks. Six months later the owner sold the airplane out of sheer frustration because the airplane had not taken in one dollar of charter revenue. Three or four days before the airplane was flown away by its new owner, I got to take my checkride in it, and we were finally set up to offer it to our customers.
How could something so routine take so long? Every time my boss submitted the required documentation it would be two weeks to a month before it was returned, and there were always changes that needed to be made. The original documentation was nearly the same as the 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, and resubmitted only to require additional changes that weren't required in the previous go-around.
So, before you rush out to buy an airplane to offer for charter be prepared for a stint of ownership before any revenue is realized. Perhaps a lengthy one. And that's assuming that you're adding the airplane to an already-existing Part 135 certificate. If you're starting from scratch and trying to get a new certificate, you might be facing an absolute nightmare. 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 already have an airplane, or at least a written lease for the use of an airplane that is to be flown on that certificate.
What's considered charter?
What constitutes air taxi? See the sidebar for FAR 119.1, Certification: Air Carriers and Commercial Operators, that details what falls under Part 135 and what falls under Part 91. (You might need your lawyer to help you make sense 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 91 to 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 to standardize the rules for all commercial aircraft. "One level of safety" is the new battle cry at 800 Independence Avenue. That means the rules for Part 135 have become remarkably 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 an instrument approach to an airport where there is no approved weather reporting. That doesn't present a problem for the airlines, because with very few exceptions the airports they operate to and from have weather reporting capability. But for many years charter operators were hamstrung by the "approved weather" rule because they flew into general aviation airports that did not have weather reporting. In effect that rule made outlaws of many operators because they flew instrument approaches to airports that did not have any weather reporting in spite of the rule.
I never could understand that one because it effectively cut general aviation's flexibility when the weather was IFR. Instead of giving the operator the option of flying an approach into a general aviation airport, the rule effectively meant that air taxi airplanes either had to scud run or land at larger airline-dominated airports, thereby adding to the congestion and controller workload (not to mention inconveniencing the passengers).
This problem has eased somewhat over the last few years with the installation of AWOS and ASOS weather reporting facilities. No matter that many of them are not accurate. The fact 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 that details the certificate holder's policies and procedures, which must be approved by the FAA. When I first started flying charter in the early 1970s, the manual was not too difficult 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 person tasked with compiling it, not to mention the pilots and mechanics who are supposed to use it for guidance. Reading through one of today's air taxi ops manuals, you would think you were flying a Boeing 747 instead of a light plane.
Many operators elect to buy a manual from another operator or from a consultant who supposedly has the inside track on getting them approved. But these generic manuals seldom pass muster on the first reading, and wind up being iterated back and forth between the FAA inspector and the company several times before approval is granted. And, as I pointed out earlier, it can take weeks and months just to get a revision reviewed only to find that it still is not satisfactory.
Aircraft and pilot requirements
For many years, Part 135 operators were not allowed to use single-engine airplanes for passenger carrying when the weather was IFR. That is about to change, though the rule change will require those airplanes to have dual alternators and dual vacuum sources. That will eliminate most of the light airplanes in the fleet and leave the high performance singles that can be or are fitted with the proper backup systems. I think the reason that rule was changed was to allow the single-engine turboprops like the Cessna Caravan to be used by commercial operators rather than the traditional piston engine singles.
Pilot qualifications are another matter. Possessing a commercial ticket and instrument rating are not enough. For instrument operations the pilot must have a minimum of 1,200 hours flying time, 500 hours cross-country time, 100 hours night time, and 75 hours of actual or simulated instrument time, at least 50 hours of which were in flight. The airmen qualifications are buried in FAR part 135.243 and many who aspire to fly passengers for hire 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 and having a commercial ticket and instrument rating in your pocket. You must read through FAR Parts 119 and 135 before going ahead with your plan so you will understand the rules and how they will apply to your operation. Then, contact your local FSDO for information on how 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 going through 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 hire and 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 type of operation, and it ain't cheap.