Can my company reimburse me to fly to meetings?

VWGhiaBob

VWGhiaBob

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VWGhiaBob
I'm sure there's an FAA regulation on this, but I don't know how to find it quickly.

My company is sending 3 executives (including me) to Las Vegas from LA for a 2 hour meeting. If I fly us there can I be reimbursed for the actual wet rental hourly fees and nothing else? It's almost as if I'm driving a car and being reimbursed for mileage.

On the other hand, it's during work hours, and I'm earning my usual salary. Still, no extra $ for being PCI...only reimbursement, dollar for dollar.
 
bartmc said:
Go alone. Yes. Take people with you. No.
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See: Opinion of the chief counsel to Guy Mangiamele

Also, your company may have insurance and workmans comp concerns that would nix your plans to fly employees on business.
 
The relevant opinion is here:
http://www.faa.gov/about/office_org.../mangiamele - (2009) legal interpretation.pdf

With a lot of companies, particularly larger ones, it's an uphill battle to get approved for travel by personal aircraft. The legal department only sees visions of a smoking crater where an elementary school once stood and summarily prohibit it. Trust me...we tried! When I worked for a multi-billion dollar corporation I co-owned a Mooney with the CTO. We tried getting travel approved up the chain. No go. Then he was promoted to President. I e-mailed him and said, "So does this mean we can now use the Mooney??!" His response was, "Not exactly." It just wasn't going to happen.
 
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LDJones said:
With a lot of companies, particularly larger ones, it's an uphill battle to get approved for travel by person aircraft. The legal department only sees visions of a smoking crater where an elementary school once stood and summarily prohibit it. Trust me...we tried! When I worked for a multi-billion dollar corporation I co-owned a Mooney with the CTO. We tried getting travel approved up the chain. No go. Then he was promoted to President. I e-mailed him and said, "So does this mean we can now use the Mooney??!" His response was, "Not exactly." It just wasn't going to happen.
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One of my partners just got approved to use the plane for business travel without other employees. This required the partnership to make some changes to our insurance coverage and his company purchased a non-owned policy to fill the gap between our coverage and the point where their risk retention fund kicks in (somewhere north of 10mil).
 
I have been trying to read up on this and as I understand the FAA regulations...If you are flying yourself, you can be fully reimbursed for the flight costs assuming that the flight is incidental to the business purpouse, but of you are carrying passengers, you can still be reimbursed by the company but not for more than your "share" of the costs. The other passengers can pitch in for their share personally.

Am I correct?...not taking into account company and insurance polices.

...then I thought...what would keep the company from reimbursing the other passengers for their out of pocket expenses?
 
Welcome to the absurd Gordian knot that 14 CFR 61.113 has become. I am working with the legislative coordinators in a US House member's office, a US Senator and the legislative affairs folks at AOPA to get statutory relief from all the FAA GC opinions and case law that has accumulated. We call the initiative "Restoring the Freedom to Fly for Private Benefit Act of 2013". If anyone is interested, PM or email me and I'll send you a white paper that explains the motivation for the initiative and the draft bills that we have prepared for the House and Senate that you can send to your own members of Congress.

Timothy F. McDonough, Ph.D.
SMU Dept. of Economics
tmcdonough@smu.edu
 
DrMack said:
Welcome to the absurd Gordian knot that 14 CFR 61.113 has become. I am working with the legislative coordinators in a US House member's office, a US Senator....
Timothy F. McDonough, Ph.D.
SMU Dept. of Economics
tmcdonough@smu.edu
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I'm very interested! As I mentioned in the thread I started on CC letters, it would be much better if the FAA adopted a system similar to the 'Private Letter Rulings' the IRS uses.

If you have a specific question for the IRS you can get an individual answer in writing from the IRS legal office. BUT

1) You pay a fee in advance.
2) The letter applies only to the writer, and does not set precedent for other taxpayers.

These insane CC letters are in my opinion illegal backdoor rule making.
 
Shawn said:
I have been trying to read up on this and as I understand the FAA regulations...If you are flying yourself, you can be fully reimbursed for the flight costs assuming that the flight is incidental to the business purpouse, but of you are carrying passengers, you can still be reimbursed by the company but not for more than your "share" of the costs. The other passengers can pitch in for their share personally.

Am I correct?...not taking into account company and insurance polices.

...then I thought...what would keep the company from reimbursing the other passengers for their out of pocket expenses?
Click to expand...

Nope, you've got it backwards.

If you have passengers, they can pay their share on a pro-rata basis, and the company can reimburse them for their share, but the PIC cannot receive any reimbursement whatsoever.
 
weilke said:
See: Opinion of the chief counsel to Guy Mangiamele

Also, your company may have insurance and workmans comp concerns that would nix your plans to fly employees on business.
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Yep, just ask Textron. They will not allow the use of (non-corporate) GA on any company business. Small aircraft are dangerous. We should know, we build them (and their engines and propellers).
 
flyingron said:
Yep, just ask Textron. They will not allow the use of (non-corporate) GA on any company business. Small aircraft are dangerous. We should know, we build them (and their engines and propellers).
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Having defended against numerous assaults by the legal system, they are keenly aware that liability for an aircraft accident allways comes back to the deepest pocket.
 
weilke said:
One of my partners just got approved to use the plane for business travel without other employees. This required the partnership to make some changes to our insurance coverage and his company purchased a non-owned policy to fill the gap between our coverage and the point where their risk retention fund kicks in (somewhere north of 10mil).
Click to expand...

We even offered to up our limits (already at $1M smooth) and add them as a named insured. For big companies, the benefit doesn't outweigh the risk.
 
flyingron said:
Yep, just ask Textron. They will not allow the use of (non-corporate) GA on any company business. Small aircraft are dangerous. We should know, we build them (and their engines and propellers).
Click to expand...

Well, they actually have a front row seat on the corporate liability show! I bet they have a dozen or more cases against them going at any one time!
 
I was lucky. The business generated by the division I started in 1969 was booming in the early 1970's. Then the first oil embargo killed a high percentage of flights by the regionals to small-mid market areas in the midwest and southeast that were crucial to our ongoing success. Adding an instrument rating and leasing a plane was the only viable option at the time (from my standpoint regarding QOL) so I did it. I don't remember asking for permission, but nobody ever complained and numerous other planes followed.

LDJones said:
We even offered to up our limits (already at $1M smooth) and add them as a named insured. For big companies, the benefit doesn't outweigh the risk.
Click to expand...
 
DrMack said:
Welcome to the absurd Gordian knot that 14 CFR 61.113 has become. I am working with the legislative coordinators in a US House member's office, a US Senator and the legislative affairs folks at AOPA to get statutory relief from all the FAA GC opinions and case law that has accumulated. We call the initiative "Restoring the Freedom to Fly for Private Benefit Act of 2013". If anyone is interested, PM or email me and I'll send you a white paper that explains the motivation for the initiative and the draft bills that we have prepared for the House and Senate that you can send to your own members of Congress.

Timothy F. McDonough, Ph.D.
SMU Dept. of Economics
tmcdonough@smu.edu
Click to expand...
I think the unfortunate Gordian knot is the result of an attempt to balance 134.5 operators trying to use 61.113 in order to avoid the costs, training and safety requirements for a 135 operating certificate with a desire to allow a certain amount of latitude for pilots to share the cost of flight with friends and family on joint trips and for pilots to use their airplanes for personal business.

Hopefully the result of the effort wont be the simple one - ban all forms of compensation to private pilots.

I'm curious - I know that in theory such concepts as "flight time is compensation" and the limitations on permitted 61.113 compensation are subject to potential government abuse. But has your group collected a series of actual results in which enforcement actions were actually brought against pilots for violation 61.113 restrictions in circumstances the group thinks were unfair? I know that all enforcement decisions are not published but those I have read left me thinking the pilot was definitely acting as an air taxi.

I would be very interested in seeing that.
 
We have a number of smaller oil and gas companies and servicers that use private planes like a KA to get to numerous smaller or out-of-the way locations. When I was at a regional securities firm--no. There are ways to do it but not if the business folks aren't willing to put legal issues in perspective. Of course, if there's not an overriding business reason, it won't go far. If you have to get to places airlines don't go or there aren't easy connections, it can open the door. Our securities firm chartered aircraft to get to smaller offices off the beaten path.

Best,

Dave
 
LDJones said:
We even offered to up our limits (already at $1M smooth) and add them as a named insured. For big companies, the benefit doesn't outweigh the risk.
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1mil or 2mil is small-fry when it comes to corporate liability policies. In the case of my partner, the company thinks they need something like 10mil. The policy to 'top' our aircraft policy to the limits they need is something like 8k. To quote from one of the emails that went back and forth between the C-level people involved in the decision: 'Is Marks happyness worth 8k to us?' In the end they decided that the amount of business he brings in made 8k just another expense, no different from another business class ticket to London.

One other reason companies dont like key employees to fly other employees around is that it has the potential to wipe out an entire area of expertise within the company with one accident. While 'key man' life insurance is available, companies tend not to buy it for people one level down.

Some of it is simply irrational.
 
My company has no corp policy on use. So, I use my plane when I think it's justified and take reimbursement for mileage just as I would in a car. My boss is aware of it, and makes no comment. I will not take other empl or customers simply as a precaution against the chance of an accident. Most of my work is individual anyway. If I were to ask for reimbursement for rental and fuel, I'm sure we would have a new policy, but so far it's not caught on.
 
My dads bank wouldn't let me fly him down to the valley - atleast they wouldn't reimburse me for it. They said it was something to the degree of "Knowingly engaging in a risky activity" but the convenience was so nice that he ate the cost and I flew him down there anyways.
 
DavidWhite said:
My dads bank wouldn't let me fly him down to the valley - atleast they wouldn't reimburse me for it. They said it was something to the degree of "Knowingly engaging in a risky activity" but the convenience was so nice that he ate the cost and I flew him down there anyways.
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At .55 cents a mile he can 'drive' and it will cost more than the fuel you burn.
 
dell30rb said:
At .55 cents a mile he can 'drive' and it will cost more than the fuel you burn.
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Which is what I would have done!

"You made the trip in how many hours?"

"I drive 155 knots!....err....I mean 178 mph!"
 
Shawn said:
I have been trying to read up on this and as I understand the FAA regulations...If you are flying yourself, you can be fully reimbursed for the flight costs assuming that the flight is incidental to the business purpouse, but of you are carrying passengers, you can still be reimbursed by the company but not for more than your "share" of the costs.
Click to expand...
No. If you are carrying passengers, you cannot be reimbursed one dime by the company.

The other passengers can pitch in for their share personally.
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Correct, so with three pax, you can get 3/4 of the direct expenses back from them since you all have "common purpose" for he flight. If they then get reimbursed by the company directly for what they paid you, that's not the FAA's concern.

...then I thought...what would keep the company from reimbursing the other passengers for their out of pocket expenses?
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Nothing. You cannot recover your pro rata share directly from anyone. However...

...you can claim it as an unreimbursed business expense on your personal income taxes at the end of the year -- the FAA is on record as saying such deductions do not constitute "compensation". Put it all together along with the expense sharing with the pax and the marginal federal/state income tax rates for people with enough income to be flying private aircraft, and at the end of the tax day, with three pax, you end up netting only about 15% of the direct cost of the flight actually out of pocket. Seems like pretty cheap flying time not to mention a cheap price to pay for avoiding the $%^&*() airlines.
 
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Here is the draft language of the bill (Senate version) as it stands today:

[FONT=&quot]113TH CONGRESS[/FONT]​
[FONT=&quot]1ST SESSION S. XXX[/FONT]​
[FONT=&quot]To amend the Federal Aviation Act of 1958 to restore the right of private pilots to use private property for private benefit, and for other purposes.[/FONT]​
[FONT=&quot]IN THE SENATE OF THE UNITED STATES[/FONT]​
[FONT=&quot]JULY xx, 2013[/FONT]​
[FONT=&quot]Mr. xxx introduces the following bill; [/FONT]​
[FONT=&quot] [/FONT]​
[FONT=&quot]A BILL[/FONT]​
[FONT=&quot]To amend the Federal Aviation Act of 1958 to restore the right of private pilots to use private property for private benefit, and for other purposes.[/FONT]​
[FONT=&quot]Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,[/FONT][FONT=&quot][/FONT]
[FONT=&quot]SECTION 1. SHORT TITLE.[/FONT]
[FONT=&quot]This Act may be cited as the ‘Freedom to Fly for Private Benefit Act of 2013’. [/FONT]
[FONT=&quot]SEC. 2. Private pilot privileges and limitations: Pilot in command. [/FONT]
[FONT=&quot](a) A private pilot may act as pilot in command of an aircraft in connection with any business or employment and be reimbursed for expenses directly related to the operation of an aircraft in connection with any business or employment, provided the expenses involve only fuel, oil, airport expenditures, or rental fees if:[/FONT]
[FONT=&quot] (1) The flight is only incidental to that business or employment; and[/FONT]
[FONT=&quot] (2) The private pilot shares a common purpose with any passengers or property carried on the aircraft; and[/FONT]
[FONT=&quot] (3) The possession and exercise of the privileges of a private pilot license is not a condition of business or employment for the private pilot; and[/FONT]
[FONT=&quot] (4) Consent of passengers or owners of property to be carried by an aircraft operated by a private pilot is not a condition of business or employment for the passengers or owners of property.[/FONT]
[FONT=&quot]SEC. 3. OTHER DEFINITIONS.[/FONT]
[FONT=&quot]For purposes of this Act—[/FONT]
[FONT=&quot](1) the term 'aircraft' has the meaning given such term in section 101(5) of the Federal Aviation Act of 1958 (49 U.S.C. 1301(5));[/FONT]
[FONT=&quot]SEC. 4. EFFECTIVE DATE; APPLICATION OF ACT.[/FONT]
[FONT=&quot] (a) EFFECTIVE DATE- This Act shall take effect on the date of the enactment of this Act.[/FONT]
 
weilke said:
One other reason companies dont like key employees to fly other employees around is that it has the potential to wipe out an entire area of expertise within the company with one accident. While 'key man' life insurance is available, companies tend not to buy it for people one level down.

Some of it is simply irrational.
Click to expand...

I am aware of one company where the CEO was forced to stop piloting aircraft under the terms of the Key Man policy. Too much risk for the insurer.
 
midlifeflyer said:
I think the unfortunate Gordian knot is the result of an attempt to balance 134.5 operators trying to use 61.113 in order to avoid the costs, training and safety requirements for a 135 operating certificate with a desire to allow a certain amount of latitude for pilots to share the cost of flight with friends and family on joint trips and for pilots to use their airplanes for personal business.
Click to expand...
You are correct and we agree that attempts to circumvent regulations pertaining to commercial operators designed to assure public safety are the problem. So we have taken a middle ground approach in the hope that all factions, as Hamilton would say, might agree to achieving a balanced solution.

Hopefully the result of the effort wont be the simple one - ban all forms of compensation to private pilots.
Click to expand...
We can be sure that one form of compensation to private pilots will not be in jeopardy:91.321, the exception for the carriage of political candidates.

I'm curious - I know that in theory such concepts as "flight time is compensation" and the limitations on permitted 61.113 compensation are subject to potential government abuse. But has your group collected a series of actual results in which enforcement actions were actually brought against pilots for violation 61.113 restrictions in circumstances the group thinks were unfair? I know that all enforcement decisions are not published but those I have read left me thinking the pilot was definitely acting as an air taxi.

I would be very interested in seeing that.
Click to expand...
Unfortunately you are correct, most enforcement actions are not public record. For our argument we have relied on the GC opinions, ALJ rulings and NTSB appeals. Enforcement is usually associated with some sort of mishap.

Some of the more twisted opinions include Haberkorn (2011), Lamb (2010), Sommer (2010), and of course Mangiamele (2009). In Administrator v. Blackburn, 4 NTSB 409 (1982), the FAA receives the gift that keeps on giving in that "good will" is interpreted as a form of compensation. Under that interpretation, if we all don't brow beat and scowl at all of our passengers throughout the flight, including family members, we could be accused of generating "good will" and thus be subject to enforcement.

I have read your comments and Cary's on studentpilot.com and I agree with your assessment, especially the comment about seeking political relief. This thing has turned into such a convoluted mess that the FAA can make the current regulation mean whatever they want it to mean and they have done so. That is why it is fair to characterize it as arbitrary and capricious and thus a worthy candidate for statutory relief.
 
I discussed this with my employer's risk management folks a number of years ago. Gave them the physics lesson about a 172 weighing less than my Jeep, landing slower than I drive down I-5, etc. Went nowhere. No way can I fly myself on business. The only GA aircraft alllowable are listed by tail number, and happen to be our corporate shuttle fleet. And they just shut down the flight that served my location. Rats.
 
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