Flying an LLC owned aircraft

[PilotDefenseAttorney]

I think if you mean by "not properly executed" there was some structural defect in the drafting of the agreements/contracts the risk of an enforcement action is probably pretty low. On the other hand, if you are referring to the operational arrangements that result from such improper agreements, I think the risk is significantly higher. Remember, despite the fact that the rules - as we have seen in this discussion - are complex and subject to varying interpretations, the FAA has demonstrated that the pilot-in-command of the airplanes involved is expected to be something of a gatekeeper in these situations. Ultimately, the actions of the FAA will likely be tempered by the perceived intent of the parties. Was the overall intent to circumvent the regulations, take advantage of a technical loophole, or simply avoid detection? Under such circumstances, the likelihood of enforcement is pretty high. If on the other hand the parties made an honest mistake in trying to operate in a accordance with a recognized exception or exclusion from the 119/135 requirements - and when called out on it take immediate action to rectify the situation - I think (at least formal) enforcement action is much less likely. Obviously, this is one of those areas that can turn on the reasonable discretion of a particular FAA inspector.

 

[dustoff17]

Do you know of any cases where the pilot was caught up in enforcement action where the agreements/contracts between OwnerCo and FlightCo were not executed properly?

This was my follow up question as well. Can the FFA pursue enforcement against a pilot in the situation as posted by the OP and mine earlier? A pilot wouldn't normally be involved in the business structure/paperwork so how would he know? And, just how deep do we need to dig in order to protect ourselves?

 

[MidlifeFlyer]

This was my follow up question as well. Can the FFA pursue enforcement against a pilot in the situation as posted by the OP and mine earlier? A pilot wouldn't normally be involved in the business structure/paperwork so how would he know? And, just how deep do we need to dig in order to protect ourselves?

I think @PilotDefenseAttorney answered that question in this most recent post above.

Can they? Sure. But...

Practically speaking, a hired pilot (not involved on the business end) is not going to be privy to the specific arrangements between the companies. And if he is, the nuances of this area are complex enough to make some of even the right questions difficult to know. Consider that even in a proper Part 91 inter-company arrangement, there are limits on what and who the aircraft is allowed to carry and for what purpose. Something as simple as a business guest can be problematic, even if the aircraft is being operated under 91 Subpart F or the associated NBAA exemption.

There are no guarantees but, as PilotDefenseAttorney said, the FAA's actions tend to be tempered with a view of the intent and knowledge of the parties and, if you read the cases (as opposed to the Chief Counsel opinions) I think you'll find they include FAA notification in all but the most extreme situations.

As an example, there was a case that went to the US Court of Appeals in 2009 where a pilot/owner who had a 135 certificate for carrying checks decided he didn't need the certificate anymore (among other things he claimed that since he had no seats he was not subject to rules about 20 seats or less). In that one. the FAA Inspector happened to come across the advertising signage at the airport and advised the pilot that he needed a 135 certificate. Even in a case of a pretty clear violation in the FA's eyes and a pilot who insisted he was right and ultimately had his commercial certificate revoked when he refused to stop, there were multiple times FAA Inspectors advised the pilot over the course of 4 months - in person, over the phone, and in writing - explaining how and why his actions were improper before certificate action was started.

Best I can suggest is that most of us can tell when the arrangement sounds bad based on our basic knowledge of where 91 ends and 135 begins and to not puts our heads in the sand when we see something that smells wrong. beyond that, while the FAA has certainly been known to act unreasonably, this seems to be an area where "ask questions first and shoot later" as opposed to vice versa seems to be the most common method.

 

[dustoff17]

@MidlifeFlyer and @PilotDefenseAttorney thank you both for your assistance with this issue AND, especially, your willingness to be a part of JC.