FAA ISSUES LETTER ON ILLEGAL CHARTER OPERATIONS
March 14, 2022
On January 31, 2022, the U.S. Federal Aviation Administration (“FAA”) issued a public notice, available here, addressing illegal charter operations, specifically the misuse of expense sharing and other misunderstandings related to pilots’ certificate privileges in regard to unauthorized operations involving compensation. In the letter, the FAA targeted unauthorized Part 135 operations, or carrying passengers for compensation, as it said these operations put the “public in danger” and undercut the business of “legitimate operators.”
The FAA’s letter begins with a clarification of the limitations around expense sharing. According to FAA, one commonly misapplied provision is the expense sharing exception in 14 C.F.R. § 61.113(c), which permits a pilot to share operating expenses of a flight with passengers as long as the pilot pays at least his or her pro rata share of the operating expenses for the flight, which is expressly limited to fuel and oil costs, airport expenditures, and/or rental fees. Additionally, FAA reiterated that only reimbursement from passengers is allowed under this provision and cautioned pilots to be careful of giving the appearance that they are “publicly holding out” their services to the public. The FAA also noted that a great test to determine whether it is permissible to collect contributions from passengers is the “common purpose test,” which requires a pilot collecting expense money to show and document that they have their own reason for travelling to the given destination that is apart from simply transporting the passengers to the destination.
The FAA’s letter also includes guidance regarding a common misunderstanding about the privileges afforded with pilots’ certificates and the limitations on the type of operations pilots may perform. The FAA said that it has come to its attention that, in general, many pilots do not know or completely understand the difference between pilot certification rules vs. operational rules. Specifically, the FAA noted that commercially rated pilots sometimes mistakenly believe that they can legally carry passengers for hire without complying with 14 C.F.R. Part 119 requirements for the operational rules involved. For example, a pilot operating a flight under 14 C.F.R. Parts 135 or 121 must not only hold a commercial pilot or Airline Transport Pilot (“ATP”) certificate but must also meet additional qualification requirements such as training, checking, and experience requirements. In fact, according to FAA, prior to conducting any operation, a pilot must determine what operational rules the flight will be conducted under, they should determine whether they have the appropriate operational certificate (i.e., a Part 119 certificate), and they should determine whether they have the requisite qualifications to conduct the operation.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665).
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