Renting a Plane and Having Someone Else Pay For It

Just curious, but does the FBOs rental insurance cover you to fly the plane for commercial purposes? I co-own a 172, but I could never use it for commercial purposes because our insurance policy strictly prohibits it.
 
This brings up an interesting question that I have, hopefully someone smarter than me can answer.

Now I will preface this by saying that my dad is an attorney so for my entire life I have seen how black and white subjects frequently have a large amount of gray area. So naturally I tend to over analyze things a lot.

Hypothetically speaking say I was a pre-private and my flight school had a plane break down at another airport and for the repair they sent me an A&P and a CFI down to bring it back. The CFI flew all of us there and once the mechanic fixed the plane I flew it back. I didn't get charged for that flight and thus got a free .5 for taking it back.

Another hypothetical, say my CFI had a student buy a plane at another airport and his student wasn't rated to fly it solo, so the three of us flew to the airport and they took the new plane back while I (commercial/multi student) flew the other back.

Both flights I wasn't charged and simply helped someone out. Was I being compensated by flight time or is their something in the regs that allow this?

Both situations are, of course, hypothetical...
 
Murdoughnut said:
Just curious, but does the FBOs rental insurance cover you to fly the plane for commercial purposes? I co-own a 172, but I could never use it for commercial purposes because our insurance policy strictly prohibits it.
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I don't think the flight qualifies as commercial in nature. It is a part 91, private flight. The FBO is already inherently commercial in nature. Hence why they do 100 hour inspections.

If I buy myself that King Air and pay a commercial pilot to fly it for me, it is still a private part 91 operation. The pilot needs to be commercially rated (receiving compensation), but that doesn't make the operation commercial.

Or, do sightseeing flights in gliders. They are exempt from part 136 :)

I'm pretty sure having a commercial certificate exempts you from the pro-rata cost sharing rule. So, if the flight would have been legal as a PPL, what exactly makes it illegal now?
 
I never really understood the point of all the restrictions on commercial pilots. Isn't that the whole point of being a commercial pilot, make $$ from flying??? I guess that would be too logical though.
 
I wouldn't stress this. The FAA is looking for illegal charter operators. They don't care that you took a friend up one time to look at his house.
 
tgrayson said:
Actually, legal has stated this over and over again throughout the years. Just grabbing one instance from this letter:
With respect to conducting the flights for compensation, your request notes that the pilot, who holds an ATP certificate, argues that any time logged on these flights should not count as compensation because building general aviation flying time in a Cessna 172 does not advance his career. Generally, accrual of flight time is compensation and the FAA does not enter into a case by-case analysis to determine whether the logging of flight time is of value to a particular pilot. (Legal Interpretation to John W. Harrington, from Donald Byrne, Assistant Chief Counsel (Oct.23, 1997) [1997-23].

​
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Thank you. I have brought this question up MANY times and no one has ever pointed me to FAA legal before. Now I know.
 
drunkenbeagle said:
If I buy myself that King Air and pay a commercial pilot to fly it for me, it is still a private part 91 operation. The pilot needs to be commercially rated (receiving compensation), but that doesn't make the operation commercial.
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That's a completely different thing than what the op asked. In that case, the pilot is only providing pilot services, since it's your plane. As you said, it's a "private" operation (meaning not holding out), but still requires a commercial pilot, unless you're flying your own plane yourself.

drunkenbeagle said:
I'm pretty sure having a commercial certificate exempts you from the pro-rata cost sharing rule. So, if the flight would have been legal as a PPL, what exactly makes it illegal now?
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That's completely false. If you are providing the plane, you must pay your pro-rata share. If you provide the plane and DON'T pay pro-rata, you are then acting as a commercial operator and need to follow the rules of 135 (or other parts, depending on the operation), including having FAA approval. Of course, there are always the exceptions listed under 119.1.

e_Dawg said:
I never really understood the point of all the restrictions on commercial pilots. Isn't that the whole point of being a commercial pilot, make $$ from flying??? I guess that would be too logical though.
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The purpose of the regs is not to put restrictions on the pilot, really, but to make sure that for-hire operators are operating under the appropriate regs (121, 135, etc). Public safety and all that.
 
Matt13C said:
Long answer, you, as the non commercial rated pilot, must pay for your share of the flight. Two of you flying, you must pay for half of the rental costs and any thing else incurred during the flight.
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Who said you had to pay an "equal" share? The reg says "pro rata", or in proportion. Your portion can be 1/50 and your friend can pay 49/50.

Are you a flight instructor? If so, then give him dual given and that completely removes the question.




Take your friend flying and have fun, and let him pay!
 
Here you go (FAA Chief Counsel).

So long as the renter of the aircraft is not the pilot and the pilot is not involved with the acquisition of the aircraft the pilot would be acting under part 91 and it would be a legal flight.

Do the flight, just make sure your friend signs all the papers and schedules the aircraft. All you are allowed to do as the pilot is show up and fly.
 
dc3flyer said:
Who said you had to pay an "equal" share? The reg says "pro rata", or in proportion. Your portion can be 1/50 and your friend can pay 49/50.

Are you a flight instructor? If so, then give him dual given and that completely removes the question.




Take your friend flying and have fun, and let him pay!
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You better check your definition of pro rata. It does mean "in proportion," but it's in proportion to the whole number of those responsible. You have to pay 1/(total number of those in the plane) to be pro rata.
 
Not to hijack the thread but what about this scenario? Two guys want to fly for a trip. The renter of the aircraft has a PPL while the other guy has a comm. license. IF the guy with the comm pays zero percent of the cost, does that mean the flight is illegal or legal?

Heres another one. If a person was a freelance instructor. Would it be legal to have the instructor rent the plane then have the student pay the rental fee? Or would the student have to provide their own aircraft then pay the instructor for the dual given?
 
ahsmatt7 said:
Not to hijack the thread but what about this scenario? Two guys want to fly for a trip. The renter of the aircraft has a PPL while the other guy has a comm. license. IF the guy with the comm pays zero percent of the cost, does that mean the flight is illegal or legal?

Heres another one. If a person was a freelance instructor. Would it be legal to have the instructor rent the plane then have the student pay the rental fee? Or would the student have to provide their own aircraft then pay the instructor for the dual given?
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The commercial pilot would be 'serving' as a passenger. No need for him to pay.

Not entirely sure what you are referencing in scenario 2. When I do demo flights I have the student pay me for both the flight and instruction and then I put the whole show on my account. We do it this way because the student doesn't have an account with the flight school yet. Nothing sneaky, it is just easiest this way.
 
Codyjp said:
The commercial pilot would be 'serving' as a passenger. No need for him to pay.

Not entirely sure what you are referencing in scenario 2. When I do demo flights I have the student pay me for both the flight and instruction and then I put the whole show on my account. We do it this way because the student doesn't have an account with the flight school yet. Nothing sneaky, it is just easiest this way.
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in scenario 1 if the comm pilot flies and the Privat pilot is the pessenger but still rents and pays for the plane does that change things a bit?

If scenario 2 is not a big deal then what is the deal with the OPs question? It seems like he is doing the same thing as in number 2 but just not instructing.
 
ahsmatt7 said:
in scenario 1 if the comm pilot flies and the Privat pilot is the pessenger but still rents and pays for the plane does that change things a bit?

If scenario 2 is not a big deal then what is the deal with the OPs question? It seems like he is doing the same thing as in number 2 but just not instructing.
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For 1, I think the FAA would look at who is PIC (who logged the flight). if the renter (PPL) logged it (I'm also assuming something like a 172), and they paid, no biggy. if the commercial pilot logged it, and the PPL paid, then it'd be illegal. If both logged it, well, then you've got other problems :)

I don't really think it's that hard. Who procured the aircraft? Who's flying the aircraft? If they're the same person/company, you've got issues. If not, you're good to go. I know some people have tried setting up two companies, with the wife's company as owner of the airplane, and the husband's company as employer of the pilots, but that doesn't fly (pardon the pun). Don't try to cheat the system, and you'll be ok.

As for scenario 2, that'd be legal because flight instruction is specifically exempted in 119.1, whereas the op's question is not. Now, getting the aircraft operator and insurance to agree to that scenario, that's another issue.
 
XcalibeR said:
That's completely false. If you are providing the plane, you must pay your pro-rata share. If you provide the plane and DON'T pay pro-rata, you are then acting as a commercial operator and need to follow the rules of 135 (or other parts, depending on the operation), including having FAA approval. Of course, there are always the exceptions listed under 119.1.
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Can you provide a link to an FAA interpretation on this? The only place in the FARs I know of that mentions paying a pro-rata share is in the case of a PPL splitting costs with passengers.

I think every intro ride I've ever seen was illegal under that logic. Let's just agree that the friend provided the aircraft, problem solved. Just have him write the check to the FBO.
 
drunkenbeagle said:
Can you provide a link to an FAA interpretation on this? The only place in the FARs I know of that mentions paying a pro-rata share is in the case of a PPL splitting costs with passengers.
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If XcalibeR were not correct, then any Commercial pilot could run an airline or charter operation out of rented aircraft. You know this cannot be done; reference the interpretation that Maurus posted above.

In reality, the pro rata sharing of the Private Certificate is a privilege, not a limitation. It's an exemption to rule about carrying passengers for hire, in an airplane the pilot provides. If the Commercial pilot did not inherit this privilege, then he would have a somewhat more limited certificate than the Private.
 
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