The Government Accountability Office (GAO) has dissected the FAA’s freshly enunciated guidance on cost sharing by passengers in private aircraft and reported to Congress that there are a variety of opinions on that policy. The report, submitted last week, doesn’t reach any conclusions or make any recommendations. In fact, the title of the report (Stakeholders Expressed Mixed Views of FAA Policies on Private Pilot Expense Sharing) sums up all 28 pages of the report. The report resulted from a line in the 2018 FAA Reauthorization bill that mandated the FAA publish a clarification of its policies on allowing passengers to chip in for flight-related costs, and who is eligible to pay their fair share of those costs. The bill also said the GAO should review that clarification.
The FAA released an advisory circular in 2020 that gave examples of who can pay for what and how much but it didn’t change any of its long-held policies that draw the line between private and commercial aviation. However, it modernized that stand by clearly saying that internet ride sharing services were against its policies designed to keep the distinction between pleasure flights and “common carriage” of passengers. It pressed the point by saying that putting a notice on a flying club bulletin board is permitted but posting the same notice on the internet is “holding out” and in the same league as advertising in a newspaper. It also said those footing part of the fuel bill had to be friends and relatives of the pilot and have a purpose for going on the flight other than sightseeing.
To drill down on the FAA’s guidance, the GAO assembled 15 “stakeholders,” four of them representing companies that have tried to establish Internet-based ride sharing services and been ordered to shut them down, seven of them representing aviation organizations and four from flying clubs. Although there was some overlap among the stakeholders on a variety of issues, the big one (Internet ride sharing) produced an 8-7 split supporting the 2020 FAA policy. “Seven of 15 stakeholders we interviewed, including each of the four representatives from expense-sharing companies and two of the four representatives of flying clubs, said that FAA should allow pilots to use the internet to find expense-sharing passengers,” the report said.
That opinions on the subject are “mixed” is telling …
Once again … the boys that’re here to help are inventing a problem where none exists. I ‘get’ that they were mandated to come up with something by the 2018 Reauthorization Bill but why do they have to slice and dice everything down to ad nauseum? And the GAO assembling “stakeholders.” Just who picked them and what right do they have to represent ME? I don’t remember electing any of ’em. GA is getting SO expensive that cost sharing may well be one of the only ways for mere mortals to afford it all. And I guess they haven’t heard that the “internet” is now THE way for people to communicate?
We need to cut the budget of the lawyers and medical personnel within FAA. That’s MY “stakeholder” position and I’m stickin’ to it.
The entire charter/”holding out” concept DOES need to be defined–and improved. The FAA has killed the charter market with draconian rules and inspections.
It used to be that most small airports had an operator that did flight instruction–some maintenance–aircraft rental–and a “for hire” aircraft ride or “charter.” Most flight rules continued under Part 91.
An individual or business might consider buying a Bonanza-like airplane–though he could afford something with more weather capability, he didn’t have the use for it by himself, and perhaps couldn’t devote the time to maintain proficiency. The local FBO would put together a group of other businesses that wanted access to a capable aircraft, and the aircraft was purchased. The owner AND the FBO were happy, and other companies in town had access to a corporate aircraft–many times, buying their OWN. It was good for the aircraft owners–the FBO, and the people in town.
The FAA came up with “Part 135”–initially, it wasn’t bad–a little better-defined maintenance, and pilot checkrides. The advent of the corporate jet raised the ante–more and better training was obviously needed, and the FAA wrote the law accordingly. Unfortunately, they applied the law to the REST of the fleet as well–even to small aircraft. The business aircraft fleet became stagnant–until the “work-arounds” started. The NBAA was able to negotiate exemptions for members–“time sharing” and “interchange”–as well as aircraft leases. Companies like Executive Jet Aviation provided “aircraft management services”–freeing business owners from having to comply with complex FAA regulation. EJA went even one better–selling “partial shares” of as little as 1/16 of an aircraft–and eventually even “jet cards” that allowed non-owners to buy a block of time, without the limitations of Part 135.
The high cost of regulation killed the “leaseback” concept. CONSIDER–the professionally-flown aircraft rivaled the airlines for aviation safety–even without the excessive regulation of the charter operators. The charter operators were flying the VERY SAME AIRCRAFT as the corporate operators–yet had an accident rate many times higher than corporate–due to the economics of complying with FAA regulation–THE FAA MADE SAFETY WORSE WITH CHARTER REGULATION. The draconian regulation cascaded down the line–the turboprop, cabin and light twin, and single-engine operators were unable to get the regulatory relief–and “leasing to a charter operator” fell out of favor–businessmen went back to single-engine aircraft. Only the high-end charter market remained.
The FAA not only killed the charter market, but killed the light-twin market as well–even affecting the turboprop market. As one of the owners of a King Air told me when he sold his airplane–“It’s a hell of a note that I HAVE A PAID-FOR AIRPLANE–I have friends that would gladly pay to use it–but I can’t because the government has so many rules for it that don’t even apply if we flew it ourselves.”
I ask you–how in the world is business supposed to see the value of business aircraft if you have to whistle up a jet from far away–and it costs this kind of money? Would you own a CAR, if you had to have the driver tested twice a year–have special maintenance done to the car that didn’t apply if you didn’t rent it out–if you had limitations on the hours you could drive the car every day–if you had limitations on weather that didn’t apply to private car owners? We get inquiries about charter often at the airport I manage–the callers are often incredulous that the service isn’t offered here–that the aircraft has to come some distance to initiate the trip–and the “ballpark” costs I estimate for them. FAA CHARTER REGULATIONS ARE THE LARGEST SINGLE ITEM IN THE DECLINE OF THE GENERAL AVIATION INDUSTRY.
Jim h,
Interesting comment, especially your comments on pt135 Regs. I wonder if you feel the same about the upcoming push for SMS?
Having just been through the SMS rollout in New Zealand as a part 135 operator, 90% of the benefits come from 10% of the program. The cost of the program meant that we postponed avionics upgrades and had reduced staff levels, so we traded some clear and obvious safety benefits for some cargo-cult safety theatre. In the real world there are no free lunches, and extra costs have to be absorbed somewhere.
And aside from just the extra costs being a drag: there are many examples of regulation forcing us into the less safe options because the safer options are either legally unavailable or totally cost prohibitive.
Regulation does not make things unsafe. Unfettered competition which allows bad operators the same privileges as good actors makes things unsafe.
Regulation CAN make things unsafe. Compare the highly regulated Part 135 charter operation accident record with the (relatively) unfettered Part 91 operation accident record. SAME airplanes, but the 135 operators have an accident record over the years far HIGHER than the Part 91 business aircraft operators.
There are several factors in play:
1. The cost of compliance with the much stricter Part 135 operations. The aircraft have to have a much stricter maintenance program–the pilots must have additional check rides (though BOTH Part 91 and 135 operators attend recurrent training for insurance purposes. The cost of compliance with restrictive regulations increases costs and cuts into any possible profit incentive.
2. As a result, charter operators end up cutting corners–maintenance, aircraft, pilot salaries–which results in lower-qualified crews. (Have you ever seen a corporate pilot that wistfully says “I’d like to quit this, and go to work for a charter company”?)
3. The higher insurance rates for Part 135 have to be passed on to the customer–decreasing the number of people actually availing themselves of a flight. THESE are the people that say “we looked into a charter flight–the cost was outrageous–we will continue to fly the airlines.” This harms BOTH PART 91 AND 135 OPERATORS.
4. Increased regulation never works. If it did, wouldn’t you see European Part 91 and 135 operators prospering in a booming aviation economy?
5. As pilots ourselves, we need to ask ourselves “Would I feel better on a corporate or charter flight?” With 6 jet type ratings, 30,000+ hours, 59 years flying, and over 50 years in the business, I’ll take the corporate flight almost every time.
Safety Management Systems–note that the FAA has had a “hard sell” trying to convince operators that it actually does any good. That doesn’t mean that a “best practices” program CAN’T work–you just have to convince pilots that it is something other than “window dressing”. PEER PRESSURE works–where over-regulation fails.
As a private pilot for the past twenty-something years, I generally agree with the FAA’s position on cost sharing and “holding out”, and I appreciate the difficulty in defining which is which.
There is a clear difference, in my mind, between being able to take a couple of friends along for a $100 hamburger or on a weekend trip to another city and sharing the flight costs, vs. posting an online ad looking for someone that might want to ride along to Nearby City and share the costs. In fact, I’d say almost every instance in which you would contemplate cost-sharing with a complete stranger seems pretty suspect as more of a business transaction than “cost sharing.”
Mere mortals – i.e. non-pilots – know nothing about the legality of any of this, and if you offer that ride to Nearby City for only $100, or whatever, somebody may snap up that great deal, not really understanding that you’re not legally able to offer transport services for money. We probably all know private pilots who we wouldn’t want anyone we know to fly with, for money or not. There’s no way for some stranger to differentiate between a safe plane and pilot and an unsafe one, nor should they have to.
I looked at a couple of the internet-app based “cost sharing” services that previously existed, and it seemed really clear to me that what they were offering was clearly on the wrong side of the grey areas of cost sharing. This is one of those situations where it’s fairly easy to see what is legit cost sharing and what isn’t, but it’s a lot harder to define it in a way that works the way you want it to. I appreciate that the FAA has left the definition fairly nebulous, but of course it’s inevitable that some use that imprecise definition to try to justify what I see as bad behavior.
The comments here about Part 91 vs. Part 135 are interesting but really have little/nothing to do with the subject of the article.
There’s little to appreciate here. Just more confusion and a draconian view of modern communication.
Apparently, its OK to share expenses with friends and family, so long as they happen to be at the airport when I hand tack said invitation to the local airport bulletin board. One would assume that a cork bulletin board would fall into the guidelines, but how about a magnetic bulletin board? A magnetic bulletin board might prove too “fancy” for such endeavors and indeed would be holding out.
After all, If I use Gmail (an internet app used by the public) to see if friends want to come along, its apparently frowned upon. If I communicate the details of the trip on my flight schools Facebook page (an open social media page for the student body at a school), I’m “holding out”.
Can the invitation be typed, double spaced or must it be handwritten? Can a cell phone be involved or must it be a landline? Telegram or pony express?
91 vs. 135 have EVERYTHING to do with the subject.
The FAA does not define a “commercial operation” well. The National Business Aircraft Assn. petitioned the FAA years ago to allow limited compensation years ago–the FAA wouldn’t change the law, but WOULD grant an “exemption” from the ill-defined law every year–BUT ONLY TO NBAA MEMBERS.
Some examples–Several owners of corporate aircraft want to utilize the aircraft of another aircraft based on the field. The only way they can do this is to all join NBAA and partake of the exemption. They can trade hour for hour on each other’s aircraft, (“Interchange”) but what if there are two or more different types of aircraft? They can work out an hourly trade ratio–“3 hours on my aircraft for 2 on yours” for example–and if they don’t use the trade time–they can compensate for cash. A clunky “work-around”–nobody is safer because of it.
Some companies go to the extreme of “‘selling” a portion of their aircraft to another to avoid the onerous “charter” regulations–this can be as little as 1/16 of the aircraft (“fractional ownership”)
In the case of turbojet aircraft (but not prop planes) the FAA wont allow charging, but allows “double the fuel costs” since the jets burn so much more fuel.
What if an aircraft owner wants to allow a friend to use his airplane? CAUTION: POSSIBLE CHARTER!
What if that same owner is going to a destination, and a friend wants to go along? MAYBE a split on the fuel is legal–but not a charge on the airplane. What if the friend wants to be dropped off at a spot enroute? (???)
I’ve managed and crewed multiple airplanes for years–and always make it a point to ask the owner the purpose of the trip and the involvement of the passengers–for my protection as well as the owner. The owners resent it–but we’ve never had an FAA violation–I refuse the trip without these answers.
It goes back to the safety factor, again. “How is it that the (relatively) unregulated Part 91 operators–flying the very same airplanes–have a BETTER safety record than the highly regulated Part 135 Charter operators? How is it that the U.S. Part 91 operators have a BETTER safety record than the highly regulated operators in the rest of the world? How is it that PART 91 insurance is so much cheaper than Part 135? How is it that the preponderance of Part 91 operators choose NOT to put their very expensive airplanes to work under Part 135, and pay the higher cost per flight hour NOT to put their airplanes to work? Why is it that the majority of pilots would RATHER fly corporate than charter?
The FAA is killing the industry with over-regulation in the name of “safety.” As one British wag summed it up–The CAA in Britain considers it a failure every time an aerocraft takes off, as there MIGHT be a crash!”
So if I put a note on the airport bulletin board that says “I’m going to the AOPA fly-in, would any pilot (+1) like to go an share costs?” that’s just fine. If I post the same thing on the airport’s Facebook group they yank my ticket. How does this make sense? Does “pilot” in that post make any difference?