Commercial Privileges Scenario Question

Penguinforce

Penguinforce

Pre-takeoff checklist
Joined
Oct 9, 2020
Messages
165
Location
Denver, CO
Display Name
Display name:
Penguinforce
My friend is currently training for her commercial pilot certificate and asked me a question about her specific case in terms of if it would be legal to fly as a commercial pilot in a part 91 flight. I wasn’t too sure and now I’m genuinely curious what you all think of it as well. So here’s the scenario:

Scenario 1: My friend and her husband own a plane that is registered to the wife’s trust but both wife and husband are trustees of that trust. Her husband can do contract work in various small towns throughout the country. The places he works for can reimburse him for his travel to and from those small towns. So the question is, can her husband technically hire her to fly that plane?

The reason I’m a little confused is technically the trust owns the plane, and the husband and wife are both trustees of the wife’s trust.

My understanding is that the passenger, in this case her husband, is providing the aircraft through the wife’s trust. Therefore, the wife can operate under Part 91 rules and does not need an operating privilege under Part 119 and therefore can be compensated by the husband through the companies the husband is contracting with. Is this correct?

I have a second follow-up scenario. They have a son and daughter who are pilots as well who are not trustees. If the wife cannot be paid in scenario 1, then in scenario 2, could they “hire” their children to fly their plane for compensation? (They are both commercial rated). And a slight small question associated with this, can two commercial pilots, while flying under commercial pilot privileges, act as a safety pilot for the other while they are under foggles? Essentially, can time sharing be permitted while acting as PIC during commercial operations?
 
Seems to me the problem would be more about who’s paying for the flight and/or how that is documented. if the customer is “reimbursing” them for the flight, this could easily fall under 135.
 
No, he cannot
 
Penguinforce said:
The reason I’m a little confused is technically the trust owns the plane, and the husband and wife are both trustees of the wife’s trust.
Click to expand...
Sounds as though the husband and wife both have "operational control" of the aircraft. Which means it is "their aircraft" for the purpose of figuring out whether this would be legal under a commercial cert, trust or no trust.

Just as: you can't own an LLC, and register the aircraft under the LLC, and then get away with saying, "I can legally fly other people for hire in it because it's not mine, it's the LLC's!" It still quacks like a duck.

I vote "not legal".

The husband can get reimbursed for flying himself to small towns for work, or maybe get equivalent "milage" or something, if his employer is cool with doing so (not all employers are). But he cannot hire her to fly him around in "their" plane.
 
There are legalities of the pilot and the plane/operator.

This also sounds like a wet lease - which is 135 territory. She controls the plane operations - as she is trustee. She is renting the plane out, and thus she is providing now both plane and pilot.

And a plane flying under 135 has different maintenance requirements, etc. which this plane currently doesn’t meet.

And it also sounds like the wife is holding out.
 
Last edited:
How is she holding out? She is not offering to fly anyone. And they are talking about her being hired to fly the plane.

Her being a trustee makes it a lot more complicated. If the husband alone owned the plane, it would be an easy answer.
 
FAA might say she’s holding out because she’s made it known that she’s open to flying.

I’m basing this POV on 1) the FAA seems to go fairly far in labeling “holding out”, and 2) they would use the trust / trustee complication to buttress that argument.

BTW- I’m also deep into the Com oral prep, as I too am working on Com rating.
 
Pinecone said:
How is she holding out? She is not offering to fly anyone. And they are talking about her being hired to fly the plane.

Her being a trustee makes it a lot more complicated. If the husband alone owned the plane, it would be an easy answer.
Click to expand...
He would be the one holding out, not her.
 
Last edited:
I have no idea about the regulations, but it seems like this shouldn't have to be more complicated than spouses going somewhere in their plane. Is this being complicated by the regulations or by the spouses? Why must the wife be "hired" to fly their plane? I mean, couldn't they just go wherever they are going, the husband get reimbursed for travel expenses and deposit the reimbursement in their bank account with no problems, regardless of which of them flew their plane?
 
squincher said:
I have no idea about the regulations, but it seems like this shouldn't have to be more complicated than spouses going somewhere in their plane. Is this being complicated by the regulations or by the spouses? Why must the wife be "hired" to fly their plane? I mean, couldn't they just go wherever they are going, the husband get reimbursed for travel expenses and deposit the reimbursement in their bank account with no problems, regardless of which of them flew their plane?
Click to expand...
It’s complicated by the reimbursement.
 
squincher said:
I have no idea about the regulations…
Click to expand...
Which is the point of the scenario in the context of a commercial pilot. What regulations apply? What’s the common purpose for the trip (i. e., would the pilot spouse be making these trips whether the non-pilot spouse is on-board or not))? If no, then it moves into the commercial space.
 
TCABM said:
Which is the point of the scenario in the context of a commercial pilot. What regulations apply? What’s the common purpose for the trip (i. e., would the pilot spouse be making these trips whether the non-pilot spouse is on-board or not))? If no, then it moves into the commercial space.
Click to expand...
But the OP is asking about commercial privileges vs. Air Carrier requirements, so common purpose isn’t relevant To the discussion.
 
I think he needs to show a receipt for reimbursement. So the couple can make a receipt for transportation services.
I vote not legal for the wife. Don't know about hiring the kids. And probably a no-go on foggles w/ safety pilot during a commercial operation.
I don't think you raise alarms if you just request standard reimbursement for mileage. Maybe they will reimburse if you bring avgas receipts.
 
farangutan said:
I think he needs to show a receipt for reimbursement. So the couple can make a receipt for transportation services.
I vote not legal for the wife. Don't know about hiring the kids. And probably a no-go on foggles w/ safety pilot during a commercial operation.
I don't think you raise alarms if you just request standard reimbursement for mileage. Maybe they will reimburse if you bring avgas receipts.
Click to expand...
If the reimbursement is structured so that it doesn’t fall under Part 135, it doesn’t matter who they hire to fly the airplane as long as they hold a Commercial certificate with appropriate ratings, or whether or not foggles are used…there is no relevant reg outside of 119/135 that would address those.
 
I'm going to say, yes. She can be paid by him to do these flights as a commercial pilot.

Penguinforce said:
Scenario 1: ... The places he works for can reimburse him for his travel to and from those small towns. So the question is, can her husband technically hire her to fly that plane?
Click to expand...

She will be a commercial pilot and can be compensated for pilot services. These are, NON-REVENUE, private flights and she will be hired to be the pilot for these flights. It is PRIVATE carriage, not common carriage and there is NO holding out.

Penguinforce said:
The reason I’m a little confused is technically the trust owns the plane, and the husband and wife are both trustees of the wife’s trust.
Click to expand...

I find no evidence that it matters who owns the aircraft. Should not even be an insurance issue since she presumably will be named as an insured pilot.

Penguinforce said:
My understanding is that the passenger, in this case her husband, is providing the aircraft through the wife’s trust. Therefore, the wife can operate under Part 91 rules and does not need an operating privilege under Part 119 and therefore can be compensated by the husband through the companies the husband is contracting with. Is this correct?
Click to expand...

Correct observation that Part 119 rules do not apply in this scenario. It is purely part 91. She will be a commercial pilot able to receive compensation for services. The flights are not revenue-generating (no charging people or cargo for flying ). Her husband getting reimbursed by his company is a totally separate matter just between him and his company. She is not involved.

Penguinforce said:
I have a second follow-up scenario. They have a son and daughter who are pilots as well who are not trustees. If the wife cannot be paid in scenario 1, then in scenario 2, could they “hire” their children to fly their plane for compensation? (They are both commercial rated). And a slight small question associated with this, can two commercial pilots, while flying under commercial pilot privileges, act as a safety pilot for the other while they are under foggles? Essentially, can time sharing be permitted while acting as PIC during commercial operations?
Click to expand...

Yes, they can also be hired by the husband to be his pilots. If they want to keep each other current and the father has no objection, then why not? The father is hiring them to get him to his destination. How they do it within the regs (which does not prohibit concurrent currency activities) does not need to be an issue unless he cares.
 
squincher said:
I have no idea about the regulations, but it seems like this shouldn't have to be more complicated than spouses going somewhere in their plane. Is this being complicated by the regulations or by the spouses? Why must the wife be "hired" to fly their plane? I mean, couldn't they just go wherever they are going, the husband get reimbursed for travel expenses and deposit the reimbursement in their bank account with no problems, regardless of which of them flew their plane?
Click to expand...
Because the FAA has determined that her logging the flying time is compensation.

He cannot be holding out, as he is not flying. He is the passenger. She is not holding out, as she is not going around telling people she will fly them somewhere.
 
noahfong said:
I'm going to say, yes. She can be paid by him to do these flights as a commercial pilot.

She will be a commercial pilot and can be compensated for pilot services. These are, NON-REVENUE, private flights and she will be hired to be the pilot for these flights. It is PRIVATE carriage, not common carriage and there is NO holding out.

I find no evidence that it matters who owns the aircraft. Should not even be an insurance issue since she presumably will be named as an insured pilot.
Click to expand...

I disagree.

Ownership of the aircraft does make a difference. If someone owns and airplane and hires some one to fly them around, it is Part 91. If the pilot owns the airplane and flies someone around for compensation, that is Part 135.

And remember, the FAA has determine that being able to log the time at no cost is compensation.
 
Pinecone said:
Ownership of the aircraft does make a difference. If someone owns and airplane and hires some one to fly them around, it is Part 91. If the pilot owns the airplane and flies someone around for compensation, that is Part 135.
Click to expand...
Can you tell me where it says that? Someone needs/wants private air transportation. A commercial pilot with a plane can provide it. And only for that one person. It is not an operation to make money from whomever. The only person making money as salary is the pilot. How is that part 135?

Pinecone said:
And remember, the FAA has determine that being able to log the time at no cost is compensation.
Click to expand...
How is this relevant? I thought she is being paid.
 
Looking in from the outside, it seems the FAA has gone well above and beyond making regulations as convoluted and confusing as possible, even by government standards. It's impossible to generate voluntary compliance when people don't even understand what they are supposed to do. Someone with any sense would tear up the whole book and start again.
 
They own the plane, and one of them is flying it to take the other to their job.

I'm not sure how this is even a commercial pilot situation. The fact that one of them submits a receipt for their expenses doesn't make it commercial. It's still two owners flying their own plane.
 
Salty said:
They own the plane, and one of them is flying it to take the other to their job.

I'm not sure how this is even a commercial pilot situation. The fact that one of them submits a receipt for their expenses doesn't make it commercial. It's still two owners flying their own plane.
Click to expand...
I think what I was missing is that the husband wants to bill his company for his wife's time flying. That opens the commercial pilot can of worms. Back to the argument....
 
Salty said:
They own the plane, and one of them is flying it to take the other to their job.

I'm not sure how this is even a commercial pilot situation. The fact that one of them submits a receipt for their expenses doesn't make it commercial. It's still two owners flying their own plane.
Click to expand...
A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:

(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.
Click to expand...
a passenger is being carried for compensation. It’s no longer a Private Pilot privilege.
 
Salty said:
I think what I was missing is that the husband wants to bill his company for his wife's time flying. That opens the commercial pilot can of worms. Back to the argument....
Click to expand...
He’s also not billing “his company,” he’s billing his customers.
 
If the husband was commercial rated and flew himself, this would be legit right?

If so, I think it's legit with the wife as pilot as well.
 
Salty said:
If the husband was commercial rated and flew himself, this would be legit right?

If so, I think it's legit with the wife as pilot as well.
Click to expand...

If the husband was a pilot, would he even need a commercial certificate to fly himself to work and take a reimbursement?
 
TCABM said:
If the husband was a pilot, would he even need a commercial certificate to fly himself to work and take a reimbursement?
Click to expand...
If he wanted to be paid for his time flying, yes he would.
 
noahfong said:
Can you tell me where it says that? Someone needs/wants private air transportation. A commercial pilot with a plane can provide it. And only for that one person. It is not an operation to make money from whomever. The only person making money as salary is the pilot. How is that part 135?
Click to expand...
The commercial operation regulations are a plate of spaghetti for the same reason the internal revenue code is. They tried to write a simple, one-size-fits-all rule, and everyone with half a brain and two nickels to rub together found a potentially profitable loophole. A large fraction of the FARs comes down to keeping people from being compensated to fly passengers or cargo without an operating certificate. (Now you need a whole brain and some real walking-around money to exploit the loopholes.)

A commercial pilot can be PIC of an airplane carrying passengers or cargo for compensation. But he can't supply the plane for it. That's where you get into the commercial operation as defined in, I think, FAR 1.1, and from there you end up in a choose-your-own-adventure trip through part 119 and into parts 121, 135, and friends.

This thread posits a scenario that bends over backwards to find a fresh loophole in the basic rule, but I don't think it gets all the way there.
 
Salty said:
If he wanted to be paid for his time flying, yes he would.
Click to expand...

The scenario says “reimburse him for his travel”, which I take to mean something different than “pay him for his time flying”.
 
Salty said:
If the husband was commercial rated and flew himself, this would be legit right?
Click to expand...
Depends how he’s being “reimbursed” and what the actual job was (is he carrying parts/supplies for the organization he’s contracting with?)
 
I'm still confused as to why he's paying his wife for something.
 
aftCG said:
I'm still confused as to why he's paying his wife for something.
Click to expand...
He's not. The scenario is payment to the wife for pilot services to the husband's business. I can envision tax reasons for wanting to do it that way, depending how things are structured.

It's an interesting scenario for SGOTI commentary (and for professional consultation on the multiple tax, business, and aviation issues in the real world. Might even make a great exam question for an aviation law specialty certification.)
 
noahfong said:
Can you tell me where it says that? Someone needs/wants private air transportation. A commercial pilot with a plane can provide it. And only for that one person. It is not an operation to make money from whomever. The only person making money as salary is the pilot. How is that part 135?
Click to expand...
The bolded portion of your post is incorrect.

A single source supplying both aircraft and crew to provide transportation to someone else in exchange for any form of compensation requires an operating certificate unless it's an activity excepted by FAR 119.1(d), some other specific FAR exception, or a waiver. "Holding out" and the distinction between public and private carriage are irrelevant.

There are plenty of examples. The "flight department company" (one of the letters linked; wholly-owned subsidiary of a company that provides transportation only to the parent company requires a 135 certificate) is a big one. Another is the scenario where an airplane owned by an LLC and company pilot are used to provide transportation for the sole member of the LLC.

It's what makes the scenario so interesting and a bit complex.
 
Does it matter whether the husband and wife live in a community-property state?
 
Palmpilot said:
Does it matter whether the husband and wife live in a community-property state?
Click to expand...
No one cares, probably least of all the FAA, about how husbands and wives share things. The main FAA issues which jump out in this scenario come down realizing that the husband and wife part might be a red herring. Even the reimbursement being from a third party is probably irrelevant.

(1) Legal ownership of the aircraft is a trust. In most (all?) states, a trust is considered a separate legal entity from the settlors, the trustees, or the beneficiaries. Basically, neither spouse owns the airplane. Common equivalent? Three guys set up an LLC to buy and share an airplane. The LLC owns the airplane, not the three guys.
(2) We don't know at this point how the husband's business is owned, but if it's an LLC or corporation, that's also a separate legal entity from either spouse.
 
midlifeflyer said:
No one cares, probably least of all the FAA, about how husbands and wives share things. The main FAA issues which jump out in this scenario come down realizing that the husband and wife part might be a red herring. Even the reimbursement being from a third party is probably irrelevant.

(1) Legal ownership of the aircraft is a trust. In most (all?) states, a trust is considered a separate legal entity from the settlors, the trustees, or the beneficiaries. Basically, neither spouse owns the airplane. Common equivalent? Three guys set up an LLC to buy and share an airplane. The LLC owns the airplane, not the three guys.
(2) We don't know at this point how the husband's business is owned, but if it's an LLC or corporation, that's also a separate legal entity from either spouse.
Click to expand...

To get to this level of a scenario for a Commercial student seems a bit extreme. I know if a DPE presented me with the question, I’d tell them ‘not enough information for me to answer and too complex for me to want to find out and recommend the couple seek competent professional advice to determine the legality.”
 
TCABM said:
To get to this level of a scenario for a Commercial student seems a bit extreme. I know if a DPE presented me with the question, I’d tell them ‘not enough information for me to answer and too complex for me to want to find out and recommend the couple seek competent professional advice to determine the legality.”
Click to expand...
I’d go with “if it’s legal for him to fly himself, it should be legal for her to fly him.”
 
You must log in or register to reply here.
Back
Top