A non-pilot purchases an aircraft and puts it into an LLC. Then non-pilot hires pilots, places insurances, rents a hangar and pays for all other costs and expenses with the sole purpose to fly the his family on personal trips and vacations (no business purpose), can the aircraft still be operated under Part 91? Or, because the non-pilot who owns the LLC is providing funding for the operation of the aircraft, does this constitute operations under Part 135?
1$\begingroup$ Part 91 does not prohibit commercial operation of an aircraft. It does not matter if the aircraft is owned/operated by an individual or an entity. Part 91 does not prohibit compensation for hire. Part 135 does require a Part 119 certificate from what I can tell from the regs. And, a Part 119 certificate is not required when common carriage is not involved in aircraft of less than 20 passengers or 6k lbs payload. In other words, the owner, operator, and/or pilot can not hold themselves out as a carrier of the general public to the general public. They are strictly for private carriage. $\endgroup$– Dean F.Jan 2, 2021 at 3:21
1$\begingroup$ Review FAA AC 120-12A. It gives you guidelines for defining private versus common carriage. The owner of the LLC is what this part specifically relates to. They can fly as many family members, friends, company officials, etc., as guests as they choose. However, they can not change those guests for the flight. This would be considered operating as an air carrier or “holding out”. $\endgroup$– Dean F.Jan 2, 2021 at 3:56
1$\begingroup$ I can not point to specific numbers or sources for numbers. Anecdotally, I can say that most aircraft that I know of are owned by an LLC formed solely to own and operate an aircraft. Every Cessna, Piper, Robinson, etc., that I have flown were owned by an LLC or other corporate structure. Sometimes, those LLCs were owned again by other corporations. This is quite common in aircraft rental, flight schools, flying clubs, leasebacks, and fractional ownership. For the most part, they are all flown under Part 91. It is done for liability purposes. And, I meant charge, not change, earlier. $\endgroup$– Dean F.Jan 2, 2021 at 4:12
4$\begingroup$ Does this answer your question? Can a commercial pilot fly passengers for hire without an air carrier certificate? $\endgroup$– Peter DunihoJan 2, 2021 at 20:35
1$\begingroup$ Would everyone who is arguing about private vs common carriage please review FAR 119.23(b). Private vs common carriage is not what determines Part 91 vs Part 135. What determines that difference is 119.1: "This part applies to each person operating or intending to operate civil aircraft as an air carrier or commercial operator, or both, in air commerce..." The proposed operation is not an air carrier or commercial operation (as long as family is not paying for the flight). Since it does not fall into the applicability requirements of Part 119, this flight can be made under Part 91. $\endgroup$– Dave-CFIIJan 4, 2021 at 19:56
The short answer is yes, an aircraft owner can hire a pilot to fly him or her, as well as other friends and family, and operate under Part 91. This is called private carriage, as opposed to common carriage.
Just to clarify a few points:
- The pilot hired would need to have a Commercial Pilot Certificate, even if no money changes hands, because the FAA considers flight time as compensation.
- The owner could not charge other passengers because this would constitute common carriage, (operating as a charter) and require a Part 135 Operating Certificate.
- It makes no difference whether the owner is a rated pilot or not. Some owners fly themselves, but want the security of having a more experienced pilot along with them.
P.S. I realized looking related questions on the right side that this is pretty much a duplicate of this question: Can an aircraft operator hire a Commercial Pilot to fly their aircraft under part 91?
1$\begingroup$ Your answer is correct for the wrong reasons. The proposed operation is not "private carriage." Private carriage is when a commercial operator does not hold out to the public, and instead only flies under contract with one or two clients. This situation is not that; this situation is an aircraft owner arranging to have someone fly himself and his own family in his own plane. It is not a commercial operation and not covered by Part 119. It is clearly a Part 91 operation. If it had genuinely been a private carriage operation, that would still be Part 135. See FAR 119.23. $\endgroup$ Jan 4, 2021 at 19:49
$\begingroup$ @Dave-CFII, I appreciate the feedback, but if a contract is in play and money is changing hands between an owner/operator and a commercially rated pilot, then it is most definitely a commercial endeavor. And since it is obviously not common carriage, it is, by default, private carriage. I stand by my answer that this deal would constitute commercial private carriage, and I never stated that it fell under part 119. $\endgroup$ Jan 5, 2021 at 4:52
$\begingroup$ P.S. according to an article I found on Avweb.com: "Private Carriage for Hire is any business-related flying for hire that does not involve advertising or holding out to the public. It is done under special exceptions to the general operating rules of Part 91." That mirrors my answer... $\endgroup$ Jan 5, 2021 at 4:53
1$\begingroup$ Avweb is a great resource, but the FAR is better. FAR 110.1 defines: "Noncommon carriage means an aircraft operation for compensation or hire that does not involve a holding out to others" ("private carriage" and "noncommon carriage" are always found together in the FAR). It does NOT define noncommon carriage as "any business-related flying." It is defined as a certain kind of operation for hire, and the OP's situation is not an operation for hire. Merely hiring a pilot does not make an operation an operation for hire, no. See definitions of "air carrier" and "commercial operation" in FAR 1.1. $\endgroup$ Jan 5, 2021 at 12:52
$\begingroup$ @Dave-CFII, your comments are not making much sense. Paying a commercial pilot is not commercial? Hiring someone is not for hire? “An aircraft operation for compensation” is non-common, or private carriage, but this aircraft operation, with this pilot being compensated, is an exception because _____ (the LLC owner is a passenger?). Please justify your points with logic statements and don’t simply tell me to read the FARs. $\endgroup$ Jan 5, 2021 at 17:42
In order to find out whether a particular operation requires an operating certificate or an air carrier certificate (and thus must conform to Part 135 or 121 or etc), you have to look at Part 119, which describes all the operations that need to be conducted under those Parts. So let's take a look at FAR 119.1:
This part applies to each person operating or intending to operate civil aircraft - (1) As an air carrier or commercial operator, or both, in air commerce; or... [yada yada large airplanes]
Let's assume that you don't mean a large airplane for the purposes of this discussion. If you do mean a large airplane, flown privately by the single owner, then the flight must be under Part 125.
If you mean a small airplane, then Part 119 would only apply if the aircraft were operated as "an air carrier or commercial operator" So the question becomes whether a private entity (being an LLC has no bearing on these questions; it might as well just be Bob the airplane owner) can hire a pilot and not be an air carrier. The practical answer is that that happens all the time under Part 91. Corporate aircraft with hired pilots fly under Part 91 regularly. They are able to do this because when an entity like Bob or the LLC or the corporation flies their own airplane, then they are not acting as air carriers or commercial operators.
The definitions of these things are in FAR 1.1:
Commercial operator means a person who, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property, other than as an air carrier or foreign air carrier or under the authority of Part 375 of this title. 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.
Bob, LLC is clearly not a commercial operator because Bob, LLC is not carrying persons or property for hire. Bob, LLC is engaged in private flights for the benefit of its owner(s) and is not a major enterprise for profit. Nor is Bob, LLC an "air carrier." An air carrier is all those things a commercial operator is, and operates interstate routes. Again, the definitions are in Section 1.1, but you have to root around a bit to really get to the heart of the question.
As an aside, most commercial operations are air carriers. But because Federalism, Part 119 has to formally treat interstate and intrastate commerce differently. That is why there is a difference between "air carrier" (which is interstate commerce) and "commercial operator" (which is intrastate commerce).
Since the LLC does not act as an air carrier or commercial operator, Part 119 doesn't apply to it and it can operate Part 91.
All this noise about "private" vs "common" carriage is a red herring. Part 119 applies to both. The only difference it makes is whether you have to look at 119.21 or 119.23 to determine what kind of certificate you need and which part of the FARs (135 or 121) you must comply with. ...IF you're a commercial operator, which your LLC is not.
$\begingroup$ Excellent answer, and I didn't see it before I added to my comments below. So, don't feel the need to respond to my comments directly, yet... But, I will have some questions for you: First, I quoted the definition of Air Carrier below, and is says nothing about interstate, major, or for profit. I agree that Bob the LLC doesn't meet our typical image of an air carrier, but he certainly meets this definition, right? As a person engaging in air transportation? (I guess if you want to get silly a student pilot renting a 150 for a solo also falls under this extremely vague definition...) $\endgroup$ Jan 5, 2021 at 18:51
$\begingroup$ Second question, you make a point that Bob the LLC is not a commercial operator because he isn't carrying people for hire. However, the commercial pilot he hires is definitely a "person, who for compensation" is carrying people. Why does this fact not make the operation commercial? It makes no distinction between who owns the aircraft... $\endgroup$ Jan 5, 2021 at 18:56