Go Back  Airline Pilot Central Forums > Career Builder > Flight Schools and Training
Co-ownership and 100hr inspections >

Co-ownership and 100hr inspections

Notices
Flight Schools and Training Ratings, building hours, airmanship, CFI topics

Co-ownership and 100hr inspections

Old 07-25-2018, 10:13 PM
  #1  
New Hire
Thread Starter
 
Joined APC: Mar 2011
Posts: 6
Default Co-ownership and 100hr inspections

I've taken a look at FAA opinions and have not found one discussing whether co-owners of aircraft who happen to be CFIs are at risk of violating 100 hr rules when they fly with their co-owners.
91.409(b) reads as follows:

(b) Except as provided in paragraph (c) of this section, no person may operate an aircraft carrying any person (other than a crewmember) for hire, and no person may give flight instruction for hire in an aircraft which that person provides, unless within the preceding 100 hours of time in service the aircraft has received an annual or 100-hour inspection and been approved for return to service in accordance with part 43 of this chapter or has received an inspection for the issuance of an airworthiness certificate in accordance with part 21 of this chapter. The 100-hour limitation may be exceeded by not more than 10 hours while en route to reach a place where the inspection can be done. The excess time used to reach a place where the inspection can be done must be included in computing the next 100 hours of time in service.
I'm thinking about asking for an opinion about the following hypothetical flights. I'd love thoughts and opinions to refine my question. Here are the assumptions:
  • Three pilots decide to purchase an aircraft together and form an LLC as an ownership entity.
  • assume equal ownership of LLC by pilots A, B, C (if the ownership stakes were not equal how would things change.)
  • there have been 99.5 hours since the last annual inspection
  • Company Rules/By Laws state that Pilots A, B and C are free to use any flight instructor they want as long as they meet certain requirements (BPPP, CSIP, insurance specific, etc.)
  • Pilot A is a CFI, but not a CFII, yet meets the requirements set forth in the bylaws.
  • Pilot B is an instrument rated private pilot.
  • Pilot C is a student pilot.
  • Pilot D is not a co-owner of the aircraft, and is renting the aircraft from the LLC. Assume this pilot does not exist for flights 1-5 and 7.

Would 91.409(B) or other FARs be violated in the following scenarios?

Flight 1: Pilot B asks Pilot A to conduct the flight instruction portion of the flight review in the aircraft and pay his for this time.

Flight 2: Pilot A and Pilot B are practicing instrument approaches together. The pilots switch off safety pilots duties throughout the flight. While Pilot B is under the hood, Pilot A makes some suggestions about better approach briefing techniques. Pilot B does not pay Pilot A for his time. They each pay for the percentage of time in the flight they were under the hood.
Is this considered flight instruction where the flight instructor has provided the aircraft?
Would this answer be different if the Pilot A was a CFII?

Flight 3: Pilot C had intended to fly a 2hr VFR X-C (under the supervision of a CFI other than Pilot A) to pick up his wife from a trip she had taken, but the weather is looking marginal.
Pilot C calls up Pilot A and asks that pilot A to join him on the flight. Pilot C pays Pilot A for his time and pilot A acts as PIC under IFR to the destination while Pilot C is the sole manipulator of the controls. Did Pilot A provide flight instruction or transportation? The wife is a pilot and notices that the weather is deteriorating. She about to go into a meeting and can't reach pilot Pilot C. She calls Pilot A and asks him to let Pilot C know about the deteriorating weather. Pilot A then reaches out to Pilot C and suggests that they fly together to get the wife. Pilot A acts as PIC under IFR to the destination while Pilot C is the sole manipulator of the controls. Did Pilot A hold himself out?

Flight 4: Pilot C had intended to fly a 2hr VFR X-C (under the supervision of a CFI other than Pilot A) to pick up his wife from a trip she had taken, but wakes up sick and does not meet the IMSAFE standards and decides he shouldn't fly. He calls up Pilot A and pays for Pilot A to go pick up his wife. Can Pilot C be compensated by a co-owner in an aircraft they share?

Flight 5: Pilot D has been checked out in local flight school aircraft of a similar model, but there are some differences in avionics worth reviewing. Pilot A takes Pilot D flying in the aircraft to note the avionics differences and some other quirks about the airplane and to confirm the pilots judgement and aeronautical knowledge of the aircraft. Would that meet the requirements outline in the check-out exception noted in the 2018 Walters Interpretation? Would the answer here change if Pilot A rather than Pilot D paid for the flight?

Flight 6: Pilot D has been checked out in local flight school aircraft of a similar model, but there are some differences in avionics worth reviewing. Pilot B takes Pilot D flying in the aircraft to note the avionics differences and some other quirks about the airplane and to confirm the pilots judgement and aeronautical knowledge of the aircraft. Would that meet the requirements outline in the check-out exception noted in the 2018 Walters Interpretation?
Would the answer here change if Pilot D or Pilot B paid for the flight?

Flight 7: Pilot C's wife is not an owner of the LLC. She drives home from her trip and flies a sightseeing flight with Pilot C aboard. (He still doesn't meet IMSAFE standards and is not PIC). She is the PIC. Pilot C pays for the fuel and the reserves into the LLC as required by the By-Laws. Did she violate her private pilot privileges by allowing her passenger to pay the full cost of flight?
djackd is offline  
Old 07-26-2018, 06:50 AM
  #2  
Prime Minister/Moderator
 
rickair7777's Avatar
 
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,100
Default

Pretty obvious to me....

As long as the pilots in question clearly determine that the Dual Recipient (or the Dual Recipient's husband) is providing the airplane, ie signing it out, paying any hourly usage, etc then the student, not the CFI, is providing the plane and no 100 hour would be required. They would be best served by having some sort of formal documentation system as to who is signing the plane out.

It hinges on who is "providing" the plane for the flight in question. Student provides, clearly no problem. Instructor provides, maybe a problem or maybe not since the student is also an owner. Both provide, maybe a problem or maybe not.

It might be best to avoid a situation where both owners jointly sign the plane out (or it's not clearly defined who signed the plane out) which could possibly be a grey area. I would definitely not have the instructor sign the plane out.

But I doubt a FSDO would even split hairs on this, since the intent is to protect the unwary public but in this case all of the owners should be fully aware of the MX status of the plane and able to make informed decisions.

I'm talking about an honest joint ownership, not some sort of fraudulent leaseback scheme intended to circumvent the rules.

But if you ask, FAA legal might render an opinion.

Last edited by rickair7777; 07-26-2018 at 07:11 AM.
rickair7777 is offline  
Old 07-26-2018, 08:04 AM
  #3  
Disinterested Third Party
 
Joined APC: Jun 2012
Posts: 5,925
Default

The FAA Chief Legal Counsel has addressed the matter in various interpretations and legal opinions.

The issue is whether the aircraft is operated for hire while carrying other than a required crewmember, and in the case of instruction, whether the instruction is deemed for hire. Remembering that the FAA considers even the logging of flight time as compensation, the specifics as to what is received by the owners and operators and who provides what are some of the details that define the devil inside.

Remember that with legal interpretations, not every letter addresses the matter in entirety; portions of the answer may be gleaned from multiple sources which help to create a better picture.

In my opinion, such as it may be, if you're putting 100 hours on the airplane doing instruction, you really should have the inspection done. I've found too many things during 100 hour inspections to dismiss the need, and whether you're legally obligated due to ownership or not, consider your own safety and well being.

You'll notice that in the Blueline letter below, the FAA addresses an operators question regarding checkouts in rental aircraft. The rental company does not provide instruction, but does checkouts for their own personnel and renters. The FAA indicates that the 100 hour inspection requirement is triggered by three prongs (collectively or individually): Is instruction provided? Is the school/instructor compensated? Does the school/instructor provide the aircraft?

The Blueline letter addresses a situation in which the school provides the aircraft as a rental, but the instructor is not an employee of the school; the instructor is an owner. The instructor is being compensated, however, and flight training is being provided, triggering the 100 hour inspection. The FAA notes that if flight training is not provided during a checkout, the requirement for the 91.409 checkout is not triggered. Again, devil and details.

https://www.faa.gov/about/office_org...rpretation.pdf

https://www.faa.gov/about/office_org...rpretation.pdf

https://www.faa.gov/about/office_org...rpretation.pdf

https://www.faa.gov/about/office_org...rpretation.pdf
JohnBurke is offline  
Old 07-26-2018, 08:16 AM
  #4  
Prime Minister/Moderator
 
rickair7777's Avatar
 
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,100
Default

Originally Posted by JohnBurke View Post
In my opinion, such as it may be, if you're putting 100 hours on the airplane doing instruction, you really should have the inspection done. I've found too many things during 100 hour inspections to dismiss the need, and whether you're legally obligated due to ownership or not, consider your own safety and well being.
Yes, if you're doing a significant amount of flight training, or the associated maneuvers/pattern work you're going to wear some things out faster. Regardless of who's providing the plane.
rickair7777 is offline  
Old 07-26-2018, 10:31 AM
  #5  
New Hire
Thread Starter
 
Joined APC: Mar 2011
Posts: 6
Default

Thanks for the feedback. I'm a CFI and I'm looking to buy a plane with two other partners. I expect the aircraft will likely be used primarily for the personal and business owners of the aircraft. (But initially it might be used for some of the co-owners to advance their certificates with other CFIs.)

Rick, I've read all of those opinions, but I don't think any contemplate my scenario where the student and the pilot both "own" the aircraft and thus either or both could be considered to have provided the aircraft. My guess is that there are many aircraft partnerships out there today where one co-owner is a CFI and they occasionally provide flight instruction to their co-owners: "Hey, buy my partners' 1/2 share and I can even check you out..."

John, I'm glad you think its easy...I'm still stumped...I suppose the key would be the operating agreement which we'll have an aviation attorney write. It will need to be clear that when a co-owner uses the aircraft they are the ones "providing it."
djackd is offline  
Old 07-30-2018, 08:17 AM
  #6  
Disinterested Third Party
 
Joined APC: Jun 2012
Posts: 5,925
Default

Originally Posted by djackd View Post
John, I'm glad you think its easy...
I don't believe I said any such thing.

I did say that the devil is in the details, as you're soon learn.
JohnBurke is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices