Private Pilot Reimbursement

Discussion in 'Flight Following' started by DrMack, Feb 13, 2012.

  1. poadeleted21

    poadeleted21 Touchdown! Greaser!

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    I think the FAA views "logging time" as compensation, if you're talking about using a company plane to fly to a meeting.
     
  2. TMetzinger

    TMetzinger Final Approach

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    As long as you're the only one in the airplane, you're correct. If there's someone else in the plane the FAA thinks you're a chauffeur, EVEN IF YOU HAVE TO GO TO THE MEETING TOO. This is NOT the way they used to interpret the rule, which is why there is so much angst over this opinion.
     
  3. JeffDG

    JeffDG Touchdown! Greaser!

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    Not only is it not the way they used to interpret the rule, but it actually flies in the face of the text of the rule itself. The letter actually stops quoting the reg before the "for hire" part of the exception.
     
  4. airguy

    airguy Cleared for Takeoff

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    It's not always direct ticket cost in question - in my case I can shave a couple hours (roundtrip) off a common trip I take on company business by being able to fly direct rather than the airline hub-and-spoke - and the cost is about the same. More important to me and the company is that it allows me to set my own schedule and I'm able to make use of several more business-time hours that would otherwise be wasted due to the airline schedule. Flying in and out on personal aircraft (early morning and late afternoon, same day) would allow me to have a full business day on location, versus flying commerical (in the day before and out the day after, plus 2 nights in a hotel and associated meal costs, along with the productivity cost of having me out of the office during all those hours). With all that figured in it's MUCH cheaper for them to allow me to fly myself in my airplane.
     
    Last edited: Feb 14, 2012
  5. onwards

    onwards Pattern Altitude

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    Right, yeah, I think I got that. That's dumb. I mean, what if I am flying down to meet with a client and need my pre-sales engineer with me? that makes no sense at all (luckily I have only flown myself for biz thus far, but this thread is illuminating). Who comes up with these stupid rules, anyway? *shakes head*
     
  6. Pa28-140

    Pa28-140 Pre-takeoff checklist

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    Here is a scenario that maybe some of you could address:

    I am a commercial pilot. If someone I know (non-pilot) rents an airplane from a third party, then hires me to fly him, is that legal? I've had people say "yes" and people say "no, you are essentially entering into charter/Part 135 operations as an air taxi". What say all of you?
     
  7. poadeleted20

    poadeleted20 Deleted

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    It is legal as long as you have no connection with the third party providing the aircraft. The problem is getting the third party to rent the plane to a non-pilot.
     
  8. denverpilot

    denverpilot Tied Down

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    Which shows how much their thinking is tied to airline's puppy ratings mills and the stretching of logbooks that they try to do.

    The thought that people just get in aircraft to go somewhere to do something at the other end, and just happen to want to get reimbursed if there's business to be done at the other end of the rainbow, just like a car, doesn't even figure into the Chief Counsel's world view.

    In response, I'd just say "okay, I won't log it". That'd make their heads explode.
     
  9. denverpilot

    denverpilot Tied Down

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    Actually no one did. The Chief Counsel made it up.
     
  10. Jim Logajan

    Jim Logajan En-Route

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    Speaking of things made up:

    "Common purpose" is a phrase the FAA has not added to the regulation, yet it is pivotal to pretty much all of the Counsel's determinations. The FAA has had years, and probably decades, to insert that phrase into the regulation, but has not. Evidence indicates that few people consider "common purpose" to be implied in the regulation. The question then becomes why the FAA refuses to clarify the regulation, or what it thinks it is accomplishing.
     
  11. dell30rb

    dell30rb Final Approach PoA Supporter

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    What if (you) the cp and the non-pilot show up at an FBO together? FBO knows you'll be flying the plane and knows you're checked out in that type. Plane rental goes on the non-pilot's credit card.
     
    Last edited: Feb 15, 2012
  12. Bob Noel

    Bob Noel Touchdown! Greaser!

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    Why would they actually try to add it? They have the CC "ruling" on it. It's a done deal as far as the ana* lawyers are concerned. Plus, if they actually did that, there is the (remote?) possibility that NPRM would be shot down.
     
  13. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    If they chose to add it, the possibility of shooting down the addition of language that has been enforced for more than 30 years is beyond remote.

    Not necessarily applicable to this part of the reg, but I think there are reasons for the lack of some of the specificity in these regs - the creativity of those who would violate them.
     
  14. Pa28-140

    Pa28-140 Pre-takeoff checklist

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    Actually, that doesn't seem to be a problem. I have no connection to the "renter" who owns the aircraft other than they know me as a pilot. They know that I will be flying the airplane, not the guy who is paying the bill. Insurance company is okay with it too. Again, since I am the PIC and meet their qualifications. I have been reluctant to do this because the FAA hasn't shown a great deal of common sense in their (some people's) interpretations. Common sense tells me that whether the non-pilot buys/leases/rents an airplane, hiring me to fly it is okay, as long as I am not providing the aircraft. Does that fit with what you are saying?
     
  15. poadeleted20

    poadeleted20 Deleted

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    The question is going to be whether you have an existing relationship with the FBO. One thing tried in the past was for the FBO to provide lists of acceptable CP/ATP pilots to fly the plane rented by non-pilot third parties. The FAA fried the pilots due to their pre-existing relationships with the FBO. So, it's an area in which I would fear to tread unless I was a bona fide employee of the company acting as their company pilot (or holding a pilot service contract with the company), and that means having paperwork to back your status. I would also not try it at an FBO where I had any prior business relationship (i.e., working there, not just renting their planes for personal use).

    In addition, if the FBO has any operational control (e.g., being able to decline to allow certain pilots to fly the plane by name), that could create a problem. So, if the FBO rents the plane to the company and says "Must have CP-ASEL-IR, 1000 TT, 100 complex, 100 instrument, 25 in type," and the company is free to get any pilot they choose who meets those quals, that would be OK. If the FBO says, "It has to be someone who's on our renter pilots list," or "I hear you're going to have Fred Smith fly it -- that's not acceptable even though he meets the requirements," that would create pits in which to fall.
     
    Last edited: Feb 15, 2012
  16. AdamZ

    AdamZ Administrator Management Council Member

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    So lets give this hypothetical. Lets say that an attorney who has a practice in Houston is trying a case in Austin for a client. The Attorney is a private pilot and wants to fly to Austin rather than drive. His firm routinely charges clients for the travel costs of its attorneys including , tolls, milage, parking, hotels, commercial airfare or train tickets.

    Attorney flies round trip and with rental and gas lets say pays $500 for the flight.

    Firm reimburses attorney the $500. Acceptable? Yes or No?

    Firm bills client for the $500 travel costs. Acceptable? Yes or No?

    Now lets say that the firm's client is from Memphis and needs to be in Austin for the hearing / trial but flies to Houston first to prepare with the attorney for the hearing.

    Can attorney bring the client along on the flight? There is no extra charge and the attorney is already getting reimbursed for travel expenses and is going to fly there regardless of whether the client comes with him or not.

    Otherwise cleint has to hop on a train, rent a car or go commercial.
     
  17. poadeleted20

    poadeleted20 Deleted

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    Let's keep in mind that there are two agencies to be considered -- the FAA and the IRS...
    To the FAA, certainly. To the IRS, probably "reasonable and necessary."

    Neither the FAA nor the IRS will care -- just the client.

    The IRS won't care, but per Mangiamele, the FAA says "no" -- the attorney has three choices:
    1. Eat the entire cost of the flight personally (no reimbursement at all), which is probably the safest course, or
    2. Eat half the cost of the trip personally while personally collecting the other half from the client as a pro rata share of the trip for which they had common purpose, or
    3. Let the client find another way to get from Houston to Austin.
    BTW, in event of choice #1, the attorney may choose to use the "Now go find the umbrella" method of covering the cost of the flight.;) See Scott Adams' book "The Dilbert Principle," or
    http://ask.metafilter.com/180206/Lo...iendly-and-not-punitive-to-frequent-travelers for more on that.
     
  18. DrMack

    DrMack Line Up and Wait

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    I think the only way we as a community of private citizens can reverse this trample on what I believe to be a fundamental freedom, is to seek statutory remedy (legislative process). But to make that work we need to provide a proposed solution to our legislators. So how do we assure the naysayers in Congress that the relief we seek would still ensure that regulations pertaining to common carriage that are designed to protect the public safety will not be compromised? What statutory language could we use to achieve that relief?

    Since the common purpose doctrine appears so often in FAA Chief Counsel opinions we may as well start there and make sure it is explicitly included.

    What else would provide the bright lines between common carriage and private transportation?

    Of course we need to make clear what we want. When I happily opened up this Pandora's box thread I was thinking of the following:

     
    Last edited: Feb 15, 2012
  19. DaleB

    DaleB En-Route

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    I learned long ago that it was quite useful to have a stock of restaurant, diner and other assorted receipts -- not filled out -- on hand when traveling. My employer wanted receipts for everything, and I sometimes forgot to get one or it was just too much hassle. My current employer only wants receipts for expenses over $25, or meals totaling over their standard allowance of (I think) $60 a day. I haven't needed a receipt for anything other than a hotel or airport parking in a couple of years now.
     
  20. RotorAndWing

    RotorAndWing Final Approach

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    I'm sure glad we don't sit around the office and worry about this stuff........:rolleyes2:
     
  21. poadeleted21

    poadeleted21 Touchdown! Greaser!

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    Well, I guess I'm open for business then. :rofl:

    It's kind of funny to me how many times folks have figured out I have a plane and then offer me money to take them somewhere. Then I get to explain regulations to them.
     
    Last edited: Feb 15, 2012
  22. gprellwitz

    gprellwitz Touchdown! Greaser!

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    Well, I'm at a College, and have had somewhat different experiences. I've flown twice for business.

    The first time, I had no passengers and they reimbursed me based on the coach fare. Well below my actual cost, of course. (When you're going from Chicago to any significant destination, there are typically some pretty good coach fares available.)

    The second time, we had a new controller, who said there would be no reimbursement whatsoever. As it turns out, that was just as well since I ended up taking a couple of colleagues with me, so it would have run afoul of the Mangiamele ruling. However, since there were now three of us in the airplane flying with a common purpose and I was clearly not flying for hire, we were able to do a pro rata share, which actually wound up being more that the coach fare would have been. Not that it matters for the FAA, but I believe that they were prohibited by the Controller from being reimbursed by the College.

    And my wife works for a non-profit University hospital association and is prohibited from flying herself anywhere on company business, even if not being reimbursed.
     
  23. poadeleted20

    poadeleted20 Deleted

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    So am I -- FAA Inspectors have far mure useful things to do. And once again, this is largely just an academic discussion. Unless someone records the sound and plays the tape for an Inspector, nobody at the FSDO is going to hear the tree fall out there in the forest.
     
  24. Tracey

    Tracey Line Up and Wait

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    If I may ask a question without having gone thru and read the entire thread... I asked someone today at my flight school if I could have a ride in their taildragger sometime and they said yes. I wanted to offer to pay for fuel (or his time or something), but I knew that he could not accept it so I didn't.

    I don't want him to think I'm a complete taker/slacker though either. I'd happily pay my share. How do I word it so it's acceptable? Maybe I should go thru and read this whole thread to answer that...
     
  25. poadeleted20

    poadeleted20 Deleted

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    If you want to be squeaky-clean legal, don't offer to pay for either his fuel or time because there's no truly legal way to do it. Buy him lunch, or something, after the flight.
     
  26. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    It's funny. Long before Mangiamele, I was faced with the scenario of a case out of town. I decided to fly and considered taking my passenger (to be reimbursed by the firm and ultimately paid for by the client). With all the bruhaha about how Mangiamele "misinterpreted" the reg, as soon as I read the reg itself, I decided it couldn't be done that way and the client and I traveled separately.

    btw, Tracy, there's absolutely nothing wrong with you, a passenger, offering to pay something toward the flight. The restrictions are on the pilot accepting it. And since Ron (correctly I think) tends to harp on the phrase "quid pro quo" - a bargained-for exchange - not every form of lunch, diner, drinks, even fuel or post-flight voluntary gratuity would necessarily be considered compensation for the flight. But it is an area in which one needs to tread lightly, where one or two extra facts can change the picture considerably.
     
  27. poadeleted20

    poadeleted20 Deleted

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    ...which is why I said "buy him lunch after the flight," not "offer to buy him lunch," or anything else like that. Just a friendly gesture, and no "quid pro quo.". Does it make a difference? There was a recent case involving a restaurant trading meals for pilot services. Guess what? The FAA decided that was not acceptable for PP's.
     
  28. Palmpilot

    Palmpilot Touchdown! Greaser!

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    CAP uses that approach in some situations, and so far, no one's head has exploded as far as I know.
     
  29. Palmpilot

    Palmpilot Touchdown! Greaser!

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    What about pro rata expense sharing? For a recreational flight with no transportation motivation, wouldn't the common purpose be "recreation"?
     
  30. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    Not a difficult guess.
     
  31. midlifeflyer

    midlifeflyer Touchdown! Greaser!

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    Maybe.

    The problem is that the regs have been interpreted in such a way that almost anything can arguably come under it by just tiny changes that are in the real world pretty inconsequential.

    For example, does the rule change depending on who asked whom? Well, if the non-pilot asked the pilot, we get into the "wouldn't have gone otherwise" question that gets bandied about in these discussions.

    At some point most of come to the "oh, give me a break!" break point where you look at whether a situation is the flip side of the duck test: If it doesn't quack like a duck, it's not a duck.

    My personal favorite:

    Your sister wants to go to her best friend's wedding and asks you to take her for the share of the costs (oh, heck, have her pay all of them!). You are not going to the wedding and, try as you might, can't come up with an independent reason for being there.

    Would it be a violation?

    One could technically argue "yes" based on existing Opinion Letters and NTSB precedent.

    But really. Does anyone think that anyone, including the FAA would give the proverbial rat's behind?

    These discussions can be very helpful in highlighting some of the lesser-know intricacies of the private pilot compensation rules. After all, since ignorance is not a defense anyway (even though it may be bliss), it usually makes sense to understand the rule before deciding that it's okay to violate it.
     
  32. Tracey

    Tracey Line Up and Wait

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    Thanks everyone! We flew to Alton Bay and landed on the ice! (Pics on my profile page, if you're interested). I offered to help pay for fuel-- (I had to leave before I had a chance to read everyone's responses) and he said that he's happy to take someone up and that he never accepts anything. One day I will buy him lunch-- (no time today). Pilots are definitely a kind bunch... just happy to take someone up for a ride! Thanks everyone....
     
  33. poadeleted20

    poadeleted20 Deleted

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    First, CAP has some exceptions to the rules under discussion. Second, whether you log it or not does not change the rules regarding carriage of passengers for hire, and that's the issue here. Loggable flight time matters only when the question is whether the flight time itself is compensation, which is another story entirely.
     
  34. denverpilot

    denverpilot Tied Down

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    Some, but they're in relation to the Air Force/State/whomever, paying for the airplane. They do not cover the CFI. CAP CFI's basically get zero compensation, under the letter of the law.

    As others have pointed out, offering to buy them lunch later, is sometimes the appropriate thing to do. A couple I know personally, won't even accept that. They're too worried about it.

    Personally I think CAP CFIs are getting a ****-sandwich by the way both FAA and CAP rules are written, but I still hope to maybe be one many many many years hence...

    Some people will always be willing to teach for free in order to complete whatever "mission" might come along... it's just their way of "giving back" all the help and instruction they've received over the years.
     
  35. Palmpilot

    Palmpilot Touchdown! Greaser!

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    It turns out I was out of date. CAP's instruction to private pilots not to log time for certain types of flights has been removed.
     
  36. ridgebackpilot

    ridgebackpilot Filing Flight Plan

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    Here's what I do:

    1. My company CFO originally did not want me flying on business, reimbursed or not. I told him I was going to keep flying and his job was to figure out how to deal with the liability issues.
    2. The company purchased an umbrella insurance policy on my flying that covers them for any associated liability. I also list the company as an additional insured on my aviation policy.
    3. I ran the numbers and proved that I could save the company more money by flying myself to meetings than they would pay in insurance premiums.
    4. The company reimburses me for business flights in two ways: Either the amount that the airlines charge for a ticket, provided the airports in question are served by an air carrier; or the Federal government's mileage rate for using private aircraft on business.
    5. I occasionally fly colleagues to meetings with me if we would all be going anyway. Sometimes they reimburse me for their pro rata share of my out-of-pocket expenses, as permitted by FAR 61.113. But usually I don't do this since I'm going to be reimbursed by my employer for the flight anyway.

    Please keep in mind that the FAA's interpretation of FAR 61.133 in opinion letters such as Mangiamele is just that: their interpretation and their opinion. The FAA cannot make or extend laws or regulations by themselves absent public notice and comment. As a lawyer, I can assure you many if not most courts would throw out the FAA's interpretation of this particular regulation as overbroad.

    While courts frequently defer to agency interpretations of law and regulation, they do not permit agencies to interpret regulations in an unreasonable manner. Intepretations that fly in the face of common sense and depart from the plain meaning of the law or regulation as written are frequently overturned by courts as being arbitrary and capricious.

    I'm comfortable that my interpretation of 61.113 is more reasonable than the FAA's and that it would be upheld in court. I've never flown for compensation or hire, and reasonable reimbursements for business travel don't violate that element of 61.113. In my opinion, being reimbursed for flying colleagues to meetings where our common purpose is to attend the meeting is neither flying for compensation or hire NOR a violation of this regulation. And if necessary, I'm prepared to defend that in court to the hilt!
     
    Last edited: Mar 17, 2012
  37. ajstoner21

    ajstoner21 Cleared for Takeoff

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    Wow. Look forward for the posts following this....
    :mad2: :popcorn:

     
  38. DrMack

    DrMack Line Up and Wait

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    I like your interpretation but am not convinced that we would receive the relief from the courts that we need and therefore am actively engaged in a lobbying campaign to enact the statutory language that will unambiguously provide that relief. The tone of your remarks leads me to believe that you are as outraged as I am that the regulators have been allowed to virtually strangle the general aviation community (or as the editors at Flying Magazine and I prefer to call it, "personal aviation") with their Machiavellian interpretation of 61.113. I especially like the spunk of your expressed willingness to defend your interpretation in court.

    I invite all who have an interest in breaking the shackles of this regulation that binds us more than most realize, to please contact me at DrMack911@gmail.com with ideas for the language itself and strategies for joining our forces in true pluralistic fashion. I'm an economist, not an attorney, so building the economic component of this case is not that difficult for me but any suggestions from the lawyers among us are most certainly welcome and greatly appreciated. For the record, I'm not a total babe in the woods with our legal system, having one of my own amicus briefs on file with the Supreme Court of the United States in a landmark patent case, so my intention is not only sincere, my track record shows that I mean serious business in this matter and will pursue it for as long as it takes and with whomever it takes. We all have a stake in this thing and I hope that those who have the capacity to contribute to its success will do so.
     
  39. ridgebackpilot

    ridgebackpilot Filing Flight Plan

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    First, the FAA posts all the opinion letters from its Chief Counsel in a searchable database. If you search on "reimbursement" you'll see dozens of such letters in response to inquiries about what is legal and what is not.

    The interesting thing about these letters is that every one of them cites previous letters as precedent! In other words, once a lawyer at the FAA articulates an opinion, it's then cited in future letters and pretty soon becomes accepted gospel. That makes it easy for an erroneous or overbroad interpretation of the regulations to become established and perpetuated.

    A few letters cite court opinions or NTSB decisions, but the vast majority simply cite earlier FAA letters as precedent. Most lawyers would find that unacceptable, even laughable, because the original concept has never really been tested in court and accepted in a published judicial decision.

    Turning to Congress for relief might work, although the hyper-partisan environment on Capitol Hill these days suggests that passing any legislation will be quite difficult. That said, the good news is that related legislation already is moving through the House and Senate. Sen. Inhofe's Pilot Bill of Rights has been introduced in both the House and Senate, and seems to be making progress. While the legislation doesn't directly address the issue of pilot reimbursement, the bill does contain related provisions, such as a requirement for greater transparency in FAA enforcement actions and the right to appeal FAA decisions in Federal court. The bill could also easily be amended to include a more favorable interpretation of FAR 61.113 than the FAA is currently perpetuating through its opinion letters to pilots and owners.
     
  40. ridgebackpilot

    ridgebackpilot Filing Flight Plan

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    I recently spent a couple of hours examining the FAA's recent opinion letters on this matter dating back to the mid-1990s, which are posted on their website. My conclusion is that their longstanding policy of interpreting "compensation or hire" very broadly may be in conflict with their own regulations.

    Specifically, FAR 1.1 defines "Commercial operator" and says, "Where it is doubtful that an operation is for 'compensation or hire', the test applied is whether the carriage by air is merely incidental to the person's other business or is, in itself, a major enterprise for profit."

    Under that definition, which significantly limits the scope of the term "compensation or hire", it's difficult to see how the FAA justifies its traditional interpretation of this term. Reimbursing private pilots for the actual expenses they incur operating aircraft for business or charitable purposes simply doesn't rise to the level of "a major enterprise for profit." Clearly in such cases, the pilot and passengers share a common purpose that has nothing to do with flying, and "carriage by air is merely incidental to the person's other business."

    I'm surprised no one has yet challenged the FAA's overbroad interpretation of "compensation or hire" in FAR 61.113. A competent lawyer would have a field day with this before a Federal court!