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This question specifically involves FAA regulations in the U.S.

Some U.S. corporate flight departments will set up a separate business entity for their flight operations to limit the liability of the parent company. Because this business operates with on-demand passenger transport for compensation as its primary business, it must be operated as a part 135 (or 125 if they are running big ships) instead of part 91. In some cases, this new subsidiary will provide additional revenue stream by servicing outside clientele in addition to meeting the travel needs of its parent company, and sometimes they remain exclusive.

If a corporate flight department doesn’t want to use their aircraft to supplement income with charter flights, is liability the only reason to set up and operate as a Part 135 instead of keeping it Part 91?

Are there any other reasons, aside from liability and supplemental income, to bother with a 135?

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  • $\begingroup$ If a company's needs are such that they don't need an aircraft on call 24/7, I think most will do fractional ownership shares instead of renting out. $\endgroup$
    – John K
    Aug 23 '20 at 2:11
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    $\begingroup$ “better” is opinion-based. Asking for factors to consider, so you can make up your own mind, isn’t. $\endgroup$
    – StephenS
    Aug 24 '20 at 0:43
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    $\begingroup$ @AaronHolmes It was a helpful suggestion to avoid getting your question closed (there’s already one vote, not me), and it seems a minor rephrasing to match what you are actually asking anyway. $\endgroup$
    – StephenS
    Aug 24 '20 at 0:49
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    $\begingroup$ @StephenS I fully agree. I took the liberty of making the changes. Aaron Holmes, feel free to edit again if I inadvertently changed the meaning of the question. $\endgroup$
    – Bianfable
    Aug 24 '20 at 7:12
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    $\begingroup$ @AaronHolmes I agree that the word "better" in the question does not justify closing it as opinion-based (and I didn't vote to close it). Nonetheless, the initial version of this question was borderline opinion-based because it was essentially asking about a business decision, where "better" depends on a lot of things like: is it better financially (cheaper), is it legally riskier, is it more flexible, etc. In the end, most business decisions are quite subjective. $\endgroup$
    – Bianfable
    Aug 24 '20 at 13:33
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There is no reason you can't operate as a part 91 department but simply adopt the standards of 135. Government contracts work this way. It's all pt91 work but adheres to pt135 rules.

Actually holding a 135 is a lot of work and is expensive. The training and checking requirements are onerous for your average flight department. How do you feel about potential career limiting checkrides every six months? You also need to keep the planes up to a higher standard. This means observing TBO hours and calendar times.

You don't mention aircraft types, but Continental requires piston engine overhauls at 12 year intervals or upon reaching the time limit, whichever is first. Even a piston single becomes expensive to operate.

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