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Can A Private Pilot Advertise On Facebook For Expense-Sharing Passengers?

by Greg Reigel 31. October 2011 12:06
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This was one of the questions addressed in an October 3, 2011 Legal Interpretation issued by the FAA's Office of Chief Counsel. The individual requesting the interpretation posed the questions in the context of a proposed trip to a wedding in which the pilot would receive a pro-rata share operating expense reimbursement from additional passengers pursuant to FAR 61.113(c). The questions presented were:

  1. Whether the pilot may advertise, on Facebook, the specific time and date that he was traveling in order to carry two additional passengers with him in exchange for a pro-rata reimbursement of the operating expenses;

  2. If he receives a response to his Facebook post from two friends that expressed an interest in traveling with him in order to attend a baseball game whether he and his passengers share a "common purpose"?

  3. Whether he may post the same information on a fixed based operator's (FBO) bulletin board instead of on Facebook; and

  4. Whether he could receive the pro-rata expenses through Paypal since Paypal extracts a 3% commission from any fees paid through their service.

The Interpretation initially noted that FAR 6l.113(c) "allows a private pilot to receive a pro-rata reimbursement from his passengers for fuel, oil, airport expenditures, or rental fees, so long as the pilot and his passengers share a bona fide common purpose for conducting the flight." It went on to discuss "common carriage," which is not allowed without a FAR Part 119 commercial operating certificate. If an operator is "holding out" to the public or a segment of the public, that "is the 'crucial determination' in deciding if one has engaged in common carriage or not." According to the Interpretation, holding out is accomplished through any "'means which communicates to the public that a transportation service is indiscriminately available' to the members of that segment of the public it is designed to attract." This can be done through signs, advertising or even where an operator has a reputation to serve all.

With respect to advertising the specific time and date of his trip on Facebook to his "friends/family/acquaintances," the Interpretation stated that would be acceptable as a private pilot, since he would not be holding out to "the general public." However, since the pilot didn't provide any additional details about the nature of the Facebook post or how large his Facebook audience was, the FAA cautioned that Facebook advertising could still be construed as holding out. For example, if the pilot advertised to a class such as all Facebook users, that could still be considered holding out if the advertising was expressing a willingness to provide transportation for all within that class.

Regarding the "common purpose," the Interpretation noted that "[t]he existence of a bona fide common purpose is determined on a case-by-case basis." It then concluded that based on the facts presented by the pilot, it appeared to be a bona fide common purpose, since the destination was dictated by the pilot, not the passengers, and he and his passengers both had personal business to conduct at the destination. Thus, the purpose of the flight was not just to transport the pilot's passengers to the destination.

Finally, the Interpretation cautioned that putting the Facebook post on the bulletin board at an FBO could be considered holding out. It also noted that "payment through Paypal would suggest that there is an interest in carrying passengers with whom there is no previous personal relationship and that the offer to accept passengers is being made to the general public," which would suggest that the pilot was "holding out." However, in specific response to the pilot's question, stated that whether or not the passengers reimburse the pilot through an online payment system such as Paypal has no bearing on the legality of the payment so long as the pilot does not pay less than his pro-rata share of expenses.

This Interpretation provides some fact specific insight into determining whether a private pilot may share expenses under FAR 61.113(c). For additional discussion on the topic, please read my article Shared Expenses and the Private Pilot.

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Greg Reigel

Upgrade or Replace Your Aircraft. Now.

by David Wyndham 31. October 2011 11:48
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At the recent NBAA I was taking a very informal poll. The question was (a) Double-dip recession or (b) Really sluggish recovery. Most folks opted for (b), including me. Even most market analysts and economists agree that we are very slowly climbing into a recovery. The aviation economy is still very sluggish.

The slow activity in business aviation leaves plenty of opportunity for those of you looking to upgrade your current aircraft or acquire a new one. Here are four reasons to consider the move right now.

Reason #1

Prices of used aircraft are still competitive in favor of the buyer. Aircraft values have bottomed out for much of the business aircraft market. There are a number of good aircraft to choose from. If you are considering upgrading to a more capable aircraft, do it now. 

The manufacturers still have aircraft to sell. Not every model is available new for “immediate delivery,” but delivery times are as short a ever. This is true for the mid-size and smaller jets, turboprops and pistons. It looks like the big cabin market is continuing its improvement.  Big cabin jets seem to be a leading indicator of a recovery.

Reason #2

Upcoming aircraft models in development are mostly set for the next four to six years. Look at the lead times for brand new designs, take into account the weak order books for most of the business aircraft industry and there is not much cash left over to finance a complete new design. Today's designs offer a number of outstanding aircraft. Unless you are waiting for the super-long-range-global business jets from Bombardier and Gulfstream, there is “something for everyone” out there right now.

Don’t forget with the end of the year comes the push by all the manufacturers to close out 2011 with strong deliveries. There may be a white-tail or two available!

Reason #3

If your upgrade path is with the aircraft that you currently have, once again, now is the time to act. The Maintenance, Repair and Overhaul (MRO) facilities have had some tough economic times. Their schedules are not as tightly booked as a three years ago. Depending on the upgrade, you may be able to negotiate good pricing and favorable delivery schedules. Paint and interior upgrades, and avionics enhancements to current production model standards are some good bets right now. Performance enhancements that can save fuel are worth looking at, too. Engine upgrades may be worth the expense if you are at or near engine overhaul with your current engines. A lot of MRO's may be offering deals. See what they offer, get references and go with quality upgrades that have value for your operation.

Reason #4 - 100% Bonus Depreciation

Important Note: The following information in not tax advice. Consult with your accountant or certified tax advisor to see if your situation qualifies for the 100% Bonus Depreciation allowance.

From the Economic Stimulus Incentives in 2010 & 2011 Tax Relief Act: Businesses that acquire and place qualified property into service after Sept. 8, 2010 can claim a depreciation allowance of 100 percent of the cost of the property. The property must be placed in service before Jan. 1, 2012 (Jan. 14, 2013 in the case of certain longer-lived and transportation property). 

New aircraft purchases and new equipment purchases for used aircraft can be expensed in the year of purchase through December 31, 2011. To qualify, the property must be new, used primarily for business purposes, and meet other tests necessary to qualify for Modified Accelerated Cost Recovery System depreciation (MACRS) for the entire time the owner has the aircraft. The 100% Bonus Depreciation is not limited in amount. 

Whether upgrading to a newer, more capable aircraft, or upgrading the capability of the one you already have, now is a good time to evaluate your available options. Do your homework and plan to take advantage of today's market conditions.

 

How to choose a Fixed Based Operator (FBO) that is right for you

by Jeremy Cox 3. October 2011 11:50
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Choosing an FBO

 

Unless you are based at a rural airport, own your own hangar, fuel your aircraft yourself from your own cache of fuel, and ultimately keep your flying adventures confined to the immediate local area with all take-offs and landings made at your home airport, you will often need to choose which Fixed Based Operation (FBO) is right for you.

 

The definition of an FBO is, in my opinion "any entity or person that provides one or more aeronautical services, at a permanent location at an airport." My own definition can be expanded upon by stating what those services might consist of:  A supplier of aviation fuel, aircraft handling, aircraft maintenance, flight training, aircraft rentals, parking/hangarage/storage, and many other aviation services not defined here.

 

So how do you go about selecting which is the right FBO for you to spend your money with?

 

The easiest way is probably to break out the type of services that you might choose from, into their own categories and then  create a concept of what you consider to be 'good' and 'bad' points of consideration.

 

Aviation Fuel

According to the National Petrochemical & Refiners Association (NPRA) there are 148 operable refineries in the U.S. (excluding Puerto Rico.) The sum total of all production of distilled product per day, in barrels of crude oil equals 17,736,000. Of this only 9%, or 1,400,000 barrels of Jet Fuel is produced. AVGAS production is much less.  Aviation fuel producing companies total approximately only 30 separate corporations, therefore the blend choice and base or wholesale pricing of all aviation fuel here in the U.S. is rather limited. We are lucky as consumers here, as there exists far less freedom of choice in the rest of the world.

 

Very few of the raw product producing companies sell direct to the FBO network across this nation. Most of the product is sold and distributed through non-producing suppliers who obviously seek to make a profit from their endeavors (quite rightly so.) Often an FBO also is unable to deal directly either with the nearest refinery, or fuel distributor because the airport at which they have chosen to hang their shingle, has a tenant agreement in place that requires all of the FBO that at based there to purchase their fuel through the airport or local municipal administration. The further away the supplying refinery, the greater the product cost.

 

Once the fuel makes it into the storage tanks of an FBO, the spot market price quoted by the commodities markets bears very little resemblance to the price that the FBO has paid, and is now ready to sell onto you. In the common situation where the FBO has been required to purchase its resale fuel from the landlord airport, the only way they are able to be price competitive to their neighboring FBO's either at the same field, or at other airports within the same city region/area, is to either reduce their overhead or to buy more fuel than their competitors thus receiving a discount from the airport, based upon how much they buy each month.

 

The distribution system that I have described above is pretty typical and thus makes a tough row-to-hoe for any FBO that is faced with competition at the same airport, a contracting pilot population, and the current administrations attempts to smash the General Aviation into smithereens. Many of the FBO's that have chosen to build comfortable, amenities-rich, and visitor pleasing facilities that are staffed with well trained, competent and customer orientated staff, elect to charge a 'ramp fee.' This practice is widely decried by many as being unfair, however I contest that you basically get what you pay for, i.e. if self-service pumps in the rain are the only service that you require, then you should expect to pay less than when you enter and exit through the smoked glass doors of an architectural wonder that serves coffee, cookies, has sleep, multi-media entertainment, flight planning rooms, courtesy cars, offers hangarage available to all transiting aircraft, and 24 hour guarded security.

 

Aircraft Handling

Often the level of handling services are governed by the geographic location of the FBO. In the wintry north snow and ice clearing and deicing will be readily available. At an urban location that acts as a portal for a major city, luggage service, gourmet catering, door-to-door limousine service, on-site conferencing as well as many other hotel-like amenities that may even include a concierge desk, will be available to you. At FBO's that are located at airports that act as a busy international port of entry, customs and immigration services, including access to customs brokerage agencies, international flight permits, visa and other services will usually be available to a visiting aircraft, passengers and crew. The size of aircraft handled by an FBO is governed by the runway length, load bearing capacities of the runway, taxiways and ramps, and often by locally imposed noise or size restrictions deemed by the municipal leaders. You may have to call ahead if you are going to need a certified dispatcher, a set of air-stairs, a wheelchair lift, luggage conveyor belt, or a galley restock. Size, services and amenities offered all add to the overhead of an FBO, and therefore expect to pay a ramp-fee or buy the required number of gallons necessary to support your patronage of the FBO that you are visiting.

 

Aircraft Maintenance

Generator brushes fail, a transponder shoots craps, an insect blocks a pitot tube, grape juice is spilled on the carpet, a navigation or beacon light burns out; possibly you are transporting company executives on a month long round-robin road show and therefore a scheduled inspection is coming due on your aircraft? Regardless of the service that you require, you must plan ahead to get maintenance performed for you while away from your home base. Occasionally an OEM service centre is also located at your destination city, and this service centre can handle your passenger and get them off to their destination hotel or office, as well as being able to perform your required servicing. Good contingency planning at the beginning of your trip might pay off in major dividends that enable you to keep to schedule if you experience an in-flight failure. Brand choice may be more important to you rather than the price that you pay at the fuel desk.

 

Flight Training

Some FBO's may offer flight training…or I might say that some Flight Schools might offer FBO services. Choosing where you learn to fly might be one of the most important decisions of your life, both from a competency and financial point of view. Unless you are located in a region where the choice of a flight school/FBO is not an option, i.e. there is only one; you should schedule a trial flight at each of your potential schools before you make your decision. Finding an instructor that matches your personality will go a long way in ensuring that you are able to complete your training in a timely and efficient timeframe. If there is a high turnover of instructors, the aircraft are shabby, poorly maintained, the classrooms double as pilot lounges, or you have long holding times because of the airport being too handle to handle training aircraft in their airspace, you might better served to find a different school or airport before you commit your cash to a license or rating.

 

Aircraft Rentals

Once you have your certificate in-hand after completing the great expense, personal fulfillment and exacting experience of becoming a pilot, what is the point if you cant either rent, or buy and hangar your own aircraft at an airport sufficiently convenient to you to maintain your proficiency as a newly certified pilot? In the area surrounding a major city you might have plenty of options available to you which may include aircraft share programs, flying clubs or flight school rentals. Either way what is the point of getting your ticket if you cant continue building flying experience somewhere that is convenient and within your means? Do your research on who rents what, where and for how much before you learn to fly?

 

Parking/Hangarage/Storage

It is possible to spend tens of millions of dollars on the construction of your own hangar in which you wish to house your personal or business aircraft. In most instances the chosen way to house and store an aircraft is by arranging a monthly rental rate for space at your local FBO. It is very common for an FBO to base its quoted rate, or even its willingness to house your aircraft on how much fuel you will be buying from them (remember how their price goes down, and their ability to stay in business is based on how many gallons they need to buy.) When considering which FBO best suits your hangarage needs, visit them all and stick around and watch how the base aircraft are handled, both how they are maneuvered in and out of the hangar (do they have at least 3 people to stack and unstack each aircraft from its berth?) Do they have the appropriate tug and tow bar combination appropriate to your specific model of aircraft? Do they carry sufficient insurance if they run your aircraft into a hangar wall or another aircraft? Is the hangar secure after hours? When will you be able to access your aircraft during the 24 hour cycle? How much notice do you need to give the FBO to make sure that your aircraft is out ready fro your desired departure? It is also important to understand the rules that you agree to regarding on how long your aircraft will sit outside on the ramp while another aircraft is taken in-or-out of the same hangar. I have known some FBO's to park base customer aircraft outside on the ramp, so they can accommodate a transient aircraft in the same spot that they are charging you rent for, while effectively double charging for the same space. Buyer beware.

 

Customer Service

Human beings are motivated by many kinds of behavior and stimulation, through-which creates a value set that they choose to live by. I for one don’t see a budget mindset having any place in the value set of an aircraft owner. This is for two reasons:

 

·         Aircraft can kill you if they are not housed, fed, watered, cared for and operated properly, all for the sake of an owner who is looking to own and operate their own aircraft on a shoestring budget.

·         The purchase price, cost to own and operate an aircraft is usually out-of-sight for most people on this planet. If you are not wealthy, then you shouldn’t be flying your own aircraft.

 

Having stated my opinion above regarding how you approach the ownership and/or operation of your aircraft, you will understand why I hold service, integrity and quality high above the actual cost, and whenever I am in the position (it does happen occasionally) to select an FBO, I treat the decision as a matter of value, instead of cost. Some of the best FBO's that I have had the privilege of using go out of their way to make certain that their customers feel safe, comfortable, cared-for and that all expectations are both met and exceeded. The FBO that greets a Cessna 172 with the same enthusiasm and standards that they provide to a Gulfstream, is sure to score high in customer satisfaction, and  ultimately in number of actual aircraft movements and subsequent fuel sales that they see and make each year. 

 

 

Making Your Choice

So what resources are available to you as an aid in making the best choice of an FBO? Well you are already here! Globalair that is; the very same website that you are reading this article. If you follow this link:  https://www.globalair.com/directories/ You can find links to aviation companies, from flight schools to flight departments, maintenance companies and charter services on the largest search engine in the aviation world. If you follow this link: https://www.globalair.com/airport/ you can rely on Globalair's FBO fuel prices, the most up to date on the Internet, to find the best 100LL and Jet A prices. Search for weather, FAA data, runway lengths and approach information.  Best yet, join MAX-TRAX here: http://www.airportfuelprices.comMax-Trax, the world’s first and only aircraft fuel route-mapping system. Developed by Globalair.com, Max-Trax is an easy and efficient way to improve your aircraft fuel efficiency. By providing a tool that tracks and continually updates aircraft fuel prices, it will help you save time and money each time you use it, regardless of whether you’re dispatching a single aircraft or an entire fleet of aircraft.

 

Max-Trax is user-friendly and extremely flexible, allowing you to modify your flight plan on the fly. Max-Trax utilizes its own proprietary FBO fuel pricing index of jet, avgas and 100LL fuel suppliers, developed in conjunction with Globalair.com’s Airport Resource Center (ARC) https://www.globalair.com/airport, to display up-to-date* aircraft fuel prices, information on the primary destination airport or alternative airports nearby and details on services and amenities available at each.

 

It makes laying out flight routes prior to departure or modifying them once you’re in the air as easy as pointing and clicking. If you need to deviate from your original flight plan enroute, simply rolling the cursor over a new waypoint or keying in the airport identifier or the name of a city is all it takes. Max-Trax will recalculate and display updated, point-to-point routing in a matter of seconds…including the best aircraft fuel prices at the new location.

 

As aviation fuel prices soar to new heights, Max-Trax can help you stretch your budget by saving you thousands of dollars on fuel purchases over the course of a year. Nowhere else on the Internet will you find a resource specifically designed to help you fly the most efficient routes and refuel at the most economical sites.

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Jeremy Cox | Fixed Based Operators (FBO)



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