Becoming someones "Personal" pilot

M

mattchew

New Member
Hey everyone,

I have two friends who both own seperate businesses, and they are considering a joint venture on a c-414 or similar. They intend to buy the aircraft and hire me to manage/fly it. I have been looking for information on how they would have to set the aircraft up and cannot find anything. I would think the best bet would be to incorporate the aircraft under a new company name. My main concern for myself is obviously ensuring I am w-2'd and not contract. I just want to make sure we do it in the best way for them as well as being legal. Any and all help appreciated!
 
Mattchew,

Situations like this can seem like the golden opportunity especially low time pilots looking for a good gig. Continue doing research on the subject to let your clients know that you know your stuff and are serious about getting them set up in an airplane. This is also a situation you'll want to be cautious with. Your friends will probably want to form an LLC for the ownership of the aircraft with their names as the owners of the LLC. Leave their business names put of the LLC for liability reasons. This also help keep the operation legal. Chances are good that they will want to fly the plane for personal as well as business use, and this is where you can get into trouble. Be sure that you are operating within the bounds of 91 subpart F. Subpart F describes joint ownership, time-share agreement and leases. The LLC that owns the aircraft can lease the aircraft to the comanies the individuals own. This will keep you safe from FAA speculation that you might be chartering the airplane. Don't mess around with that. It's a good way to get in trouble.
As far as being an employee rather than a contract pilot for them, that may be a little more difficult. You'll have to be an employee of one of the owner's companies for this to work. Theoretically they could set you up as an employee of the owning LLC, but this creates tax problems for them, and they will probably want to avoid that. I'm sure one of the the potential owners has an accountant that will be able help with that aspect.
Just be sure you run your plans by an aviation attorney, and they'll keep you safe.
Like I said before. Read 91 subpart F. That will shed a lot of light on the subject.
 
Just so you know your hours always go where you go, but they can't necessarily be used towards ratings. If you start at a part 61 school and then transfer to a part 141 school all of your hours get transferred but only 25% of those transferred hours are applicable towards your ratings at that school. If you start at a 141 school and transfer to a part 61 school all of your hours can be applied to a rating at that school. If you transfer from one part 141 school to another 50% of your hours can be applied to a rating at the new school. Just keep that in mind if you bounce around flight schools. Transferring from one part 61 school to another ther is no loss of time. As stated before your new instructor will likely want to review what's already been covered by your past instructor before moving forward. I don't know if I'd bother getting started with only one month before going to school. My recommendation would be to take a demo flight to make suremyou don't hate flying and then buy your books and get studying. Instructors love students who study and want to learn.
 
Pay2 said:
Your friends will probably want to form an LLC for the ownership of the aircraft with their names as the owners of the LLC. Leave their business names put of the LLC for liability reasons.
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Common misconception. LLCs don't do anything to reduce liability that carrying enough insurance won't take care of. Why do hundreds of Fortune companies have their aircraft registered under their corporate title? READ THIS

Pay2 said:
This also help keep the operation legal. Chances are good that they will want to fly the plane for personal as well as business use, and this is where you can get into trouble.
Click to expand...

Business or pleasure, it doesn't matter how the airplane is registered. The IRS is the only agency that cares for what purposes the airplane was flown.

Pay2 said:
Be sure that you are operating within the bounds of 91 subpart F. Subpart F describes joint ownership, time-share agreement and leases.
Click to expand...

...for large turbine aircraft and aircraft operating under subpart K, neither of which a Cessna 414 or similar owned by two golfing buddies would ever be.

Pay2 said:
The LLC that owns the aircraft can lease the aircraft to the comanies the individuals own. This will keep you safe from FAA speculation that you might be chartering the airplane. Don't mess around with that. It's a good way to get in trouble.
Click to expand...

Sound advice. LLCs with dry lease agreements (and pilot service agreements...more on that in a minute) are the best way to avoid scrutiny by the FAA. Again, however, they don't do jack squat to reduce liability.

Pay2 said:
As far as being an employee rather than a contract pilot for them, that may be a little more difficult. You'll have to be an employee of one of the owner's companies for this to work. Theoretically they could set you up as an employee of the owning LLC...
Click to expand...

The way we operate is as follows; there are two entities on the "flight department" side of the operation, and a minimum of 5 contracts/agreements between owners, a pilot LLC and aircraft LLCs. The pilots are employees of yet ANOTHER LLC. There is one aircraft dry lease agreement for each company/owner, a pilot service agreement between the Pilot LLC company and each company/owner, and a management service agreement between the Pilot LLC company and Aircraft LLC company.

Be careful of the FLIGHT DEPARTMENT COMPANY

You mention liability over and over again. Consider this; if you're an employee of one of the companies, and you buy the farm, you're a HUGE liability to your employer.


Pay2 said:
Just be sure you run your plans by an aviation attorney, and they'll keep you safe.
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Best advice so far. And remember, you get what you pay for.
 
First, sorry about my post #2. That was a response to another question on a completely different forum. I'm not sure how it followed me here or how I posted it, but it won't allow me to delete it. Anyway...
You've just recieves more sound advice from TF. I may have placed too much emphasis on the LLC as a form of liability mitigation. The truth is however, that proper insurance is the best way to offset liability. If you don't have the experience the insurance underwriters want you may not be able to carry the amount of liability insurance the aircraft owners need.
NBAA also has a lot of information on this typre of situation, so if you have access to their site you'll find just about everything you need. Once again though, consult an aviation attorney.
 
A lot (not all so relax out there) of owners get into a plane without thinking about or considering the cost of owning. Make sure they are tied into the actual cost and make darn sure they will support your decisions with regards to the operation, maintenance and, upkeep on the plane.....
 
dustoff17 said:
A lot (not all so relax out there) of owners get into a plane without thinking about or considering the cost of owning. Make sure they are tied into the actual cost and make darn sure they will support your decisions with regards to the operation, maintenance and, upkeep on the plane.....
Click to expand...

dustoff makes a very cogent point. I do not know how you would approach a potential employer and ask "Say there, can you actually afford this airplane?" In fact when we hired our crew one of the questions I was asked was "So do you have any plans for continuity of operation should you pass away? Will your family continue to use and support the airplane?"

The guy who asked that question is now our Captain on the G550 so I guess he liked my answer. The point I'm trying to make is that if a potential employer resents this kind of question, you probably don't want to work there anyway.
 
Marcus ,

Where do you operate your 550 out of? what company is it under? just curious

Thanks
 
On a side note, make sure to create a Flight Ops/General Ops manual. Best would be to get your hands on an established one and change as necessary. Just because part 91 doesn't have flight/duty time's, doesn't mean you shouldn't set some limits, and any private owner worth a crap will adhere to your policy.

Key points - Guaranteed 8 hours of rest between flights, PLUS time to travel TO and FROM airport + personal hygiene. Separate rental cars and accommodations (read hotel) from passengers. Set schedule of when part 142 recurrent training event will take place etc...Plus many others.

Don't think because you are Part 91 that you aren't entitled to written work and operation rules.
 
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