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D.C. Circuit Court of Appeals Grounds Flytenow & AirPooler Private Pilot Flight-Sharing Concept

As you may know, one of the ways a private pilot is permitted to reduce the cost of a particular flight is to share that expense with the passenger(s) on the flight. The applicable regulation, 14 CFR 61.113(a), provides that "no person who holds a private pilot certificate may act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as pilot in command of an aircraft." However, Paragraph (c) of the regulation states "[a] private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees." This creates an exception to the prohibition on private pilots receiving compensation for flying.

Using this exception, and presumably with the Uber and Airbnb ride sharing concepts in mind, two companies, Flytenow and AirPooler, created websites that would allow a private pilot to offer his or her planned flight to potential passengers who would be willing to share the expenses of the flight under Section 61.113(c). However, before the concepts really took flight, both AirPooler and Flytenow requested legal interpretations from the FAA regarding whether their business concept was in compliance with federal aviation regulations. The FAA responded to both requests with a resounding “no.”

The FAA concluded that a private pilot using a web-based service to offer flights to potential passengers would be holding himself or herself out as a common carrier to transport persons from place to place for compensation. The regulations prohibit that type of operation by a private pilot. Rather, under the proposed scenario the FAA stated that the pilot would need to have both a commercial pilot certificate and also an air carrier certificate. The FAA’s decision relied upon the FAA’s previous interpretations of the terms “compensation” and “holding out” as they are used in the regulations.

Flytenow disagreed with the FAA’s interpretations and its application of both the definitions of “compensation” and “holding out” as they applied to its business model. It then filed a petition asking the D.C. Circuit Court of Appeals to set aside the FAA’s legal interpretations. In a not-so-surprising decision, the D.C. Circuit Court of Appeals in Flytenow, Inc. v. Federal Aviation Administration rejected Flytenow’s petition in its entirety and confirmed the FAA’s interpretations.

First, the court confirmed that a private pilot’s receipt of any reimbursement of expenses is compensation. Thus, given the FAA’s broad view of “compensation,” a private pilot’s receipt of a pro-rata share of a flight’s expenses from passengers would be compensation, albeit permitted compensation under Section 61.113(c).

Next, the court had no trouble determining that private pilots using the Flytenow website to offer flights would be “holding out” as the FAA interpreted that term. The court observed that any potential passenger could arrange for a flight by simply using Flytenow’s website. And although use of the website was limited to members, in order to become a member a potential passenger merely needed to sign up. Further, the court did not think that a member pilot’s authority to decide not to accept particular passengers limited the “holding out” by that pilot. Thus, the court agreed with the FAA’s position that a private pilot’s sharing of flight expenses with passengers obtained through the Flytenow website would be contrary to the regulations.

However, the court went on to note that “pilots communicating to defined and limited groups remain free to invite passengers for common purpose expense-sharing flights.” It confirmed a previous opinion by the FAA that a private pilot’s posting of a flight on a bulletin board may be permitted in certain circumstances. The court also stated that “[o]ther kinds of internet-based communications, such as e-mail among friends, for example, seem unlikely to be deemed ‘holding out’ under the FAA’s Interpretation.” Finally, perhaps in fear that its decision would be misinterpreted, the court concluded by stating “[p]rivate pilots continue to enjoy the right to share expenses with their passengers, so long as they share a common purpose and do not hold themselves out as offering services to the public.”

So, what does this mean? Well, for starters, it means that offering flights through a broadly based flight-sharing system or website open to anyone (e.g. John Q. Public) is likely going to be interpreted as “holding out.” However, the court’s language does suggest that making flight-sharing available to a more limited or defined pool of potential passengers may not be considered “holding out.”

Unfortunately, the court did not provide any further guidance on where the “holding out” threshold would be crossed. Somewhere between “communications between friends” and “communications to the public at large” is neither specific, nor is it helpful. Finding the sweet-spot where the pool of potential passengers is large enough to justify the business model for flight-sharing, yet still small enough that it is not “holding out,” may be difficult. But for those who may want to pursue or revisit this type of flight-sharing arrangement, it is better than a complete ban.

When Is A Touch-And-Go Landing Not A Landing?

As pilots, we all know that with every takeoff we perform, at some point after that takeoff a landing will occur, some better than others. This is true whether we are flying to a destination or simply performing touch-and-go takeoffs and landings in the local pattern. However, the term "landing" may mean different things in different contexts.

For example, in a recent decision issued by the National Transportation Safety Board, Administrator v. Boylan, the Board determined that a touch-and-go landing did not qualify as a "landing" for purposes of determining compliance with 14 C.F.R. § 91.151(a)(1). The case involved a round-trip flight in which the airman departed from his home-airport with the intention of performing touch-and-go's at two other airports before returning to his home-airport. Unfortunately, after performing the touch-and-go's at those two airports, the airman was unable to make it back to his home-airport due to fuel exhaustion and the flight terminated in an off-airport landing.

Naturally, the FAA was not pleased. The FAA initiated an enforcement action to suspend the airman's ATP certificate for a period of 120 days for the airman's alleged violation of 14 C.F.R. §§ 91.103(a) (failure to become familiar with all information regarding the proposed flight), 91.151(a)(1) (day VFR fuel minimums requiring enough fuel to fly to the "first point of intended landing" and for another 30 minutes) and 91.13(a) (careless and reckless). The airman appealed the order of suspension and after a hearing, the Administrative Law Judge ("ALJ") determined that the airman failed to adequately preflight the aircraft because he did not ensure the aircraft contained sufficient fuel for the flight. As a result, the ALJ found the airman violated §§ 91.103(a) and 91.13(a).

However, in a surprise decision, the ALJ concluded the airman did not violate § 91.151(a)(1) because his touch-and-go landing at the first airport was a landing that occurred at the airman's "first point of intended landing." As a result, the ALJ reduced the suspension of the airman's ATP certificate to 105 days. Not surprisingly, the FAA appealed the ALJ's decision to the full Board.

On appeal, the FAA argued the ALJ's determination that a touch-and-go qualified as a landing for purposes of § 91.151(a)(1) was in error. The FAA also argued the ALJ should have deferred to the FAA's interpretation of the regulation. The Board agreed with the FAA and concluded “first point of intended landing” in § 91.151(a)(1) is "the point at which the aircraft finally comes to rest."

In support of its decision, the Board stated:

The Administrator could not achieve the safety purpose of reducing the risk of fuel exhaustion accidents if an operator only needed to have sufficient fuel to conduct a touch-and-go, as well as fly for an additional 30 minutes, notwithstanding the duration of the remaining flight before the aircraft finally comes to rest.

The Board also rejected the ALJ's reliance upon 14 C.F.R. § 61.57 (recent flight experience: pilot in command) and observed that "[w]hat constitutes a “landing” or “landing to a full stop” under § 61.57 does not define what would constitute the “first point of intended landing” under § 91.151(a)." It further disagreed with the ALJ's finding that a touch-and-go landing marks the end of one flight and the beginning of a new one. Rather the Board found such an interpretation would be illogical because a pilot performing a touch-and-go doesn't have a chance to perform a preflight checklist or visually inspect the fuel tanks before the aircraft takes off again.

Additionally, the Board observed that if the ALJ's interpretation were correct, then § 91.151(a)(1)'s fuel requirement would begin anew with each touch-and-go takeoff. As a result, even under the ALJ's interpretation, in the case before it the evidence still supported the airman's violation of § 91.151(a)(1) because the off-airport landing due to fuel exhaustion showed that he did not meet his fuel reserve minimums when he departed his second and third airports. Thus, the Board reversed the ALJ's decision regarding the § 91.151(a)(1) violation and reinstated the 120 day suspension of the airman's ATP certificate.

So, what can we learn from this case? Well, the obvious answer is to make sure you have enough fuel for your intended flight in compliance with the applicable regulations. The not-so-obvious answer is that a "landing" isn't always a "landing." Not particularly helpful, I know.

However, this not-so-obvious answer highlights the importance of understanding not only individual regulations, but also the distinctions between the regulations. Although it may seem reasonable to think that the language of one regulation should mean the same thing in the context of a different regulation, that isn't always the case, unfortunately. As airmen, we all need to understand the meaning of each regulation applicable to our flights in order to operate in compliance with the regulations and safely.

Understanding the "What" and "Where" for Documenting Your Aircraft's Annual Inspection

If you own or operate an aircraft, you probably know that 14 C.F.R. §91.409(a) requires that an aircraft must undergo an annual inspection every twelve calendar months or sooner in order for that aircraft to be airworthy. But once that inspection is complete, what is your mechanic with an inspection authorization ("IA") required to do to document the annual inspection? What maintenance record entry is required and where must that entry be made?

Before we get to those questions, first it is important to understand to what the annual inspection applies. Section 91.409(a) states that an aircraft must receive an annual inspection in accordance with 14 C.F.R. Part 43. When we read Section 43.15(c), which governs annual inspections, we see, and the FAA tells us, that the annual inspection only applies to an aircraft. Specifically, that section requires that the annual inspection of your aircraft be performed using a checklist containing the scope and detail of items contained in Part 43, Appendix D. However, since Appendix D applies to the whole aircraft, including propeller and engine, it is the aircraft itself that receives the annual inspection rather than the individual components. This is true even though the engine and propeller assemblies are also inspected during the course of the annual inspection in accordance with Appendix D, paragraphs (d) and (h).

So, now that we understand the scope of the Section 91.409(a) annual inspection, and that it applies only to the aircraft as a whole, next we need to determine what maintenance record entry is required. 14 C.F.R. § 43.11(a) tells us that a "person approving or disapproving for return to service an aircraft, airframe, aircraft engine, propeller, appliance, or component part after any inspection performed in accordance with part 91 . . . shall make an entry in the maintenance record of that equipment." Since annual inspections apply only to the aircraft, the person who approves or disapproves an aircraft for return to service after an annual inspection is performed must make an entry in the maintenance record of "that equipment," which, according to the FAA, means "the aircraft." Thus, a maintenance entry documenting completion of an annual inspection is required only for "the aircraft."

But, where is your IA supposed to make that entry? In the aircraft's logbook? In a maintenance logbook for equipment other than the aircraft, such as a logbook for the aircraft's propeller or engine? In both? To answer these questions, we need to look at 14 C.F.R. § 91.417 – Maintenance Records.

Section 91.417(a)(1) requires each registered owner or operator to keep maintenance records for each aircraft (including the airframe) and each engine, propeller, rotor, and appliance of an aircraft for the periods specified in Section 91.417(b). But Section 91.417 doesn't say anything about "where" those records are to be kept. The regulation doesn't require you to keep separate or individual records for the required items, nor does it require you to keep all of the maintenance records for the aircraft in a single logbook.

As a result, you may keep one logbook for all of the records for the aircraft and its appliances/components and that is acceptable to the FAA. In that situation your IA would document completion of the annual inspection for the aircraft in that one logbook. Alternatively, it may make sense for you to keep separate or individual logbook records for the aircraft's airframe and appliances/components which then comprise, collectively, the aircraft's records. In that situation, since your IA is only required to document the completion of the annual inspection for the aircraft, your IA may, but is not required to, document the completion of an annual inspection in each of the respective logbooks. This option is also acceptable to the FAA.

In fact, if you maintains multiple logbooks for the aircraft, the FAA suggests that it is probably good practice for your IA to document completion of an annual inspection in each of the respective logbooks. However, if your IA does document the completion of an annual inspection in the maintenance logbook for equipment other than your aircraft, the entry or record in the logbook should be specifically related to that appliance/component. For example, if your IA is going to document the annual inspection in the maintenance logbook for the aircraft's engine, he or she should use language such as "I certify that this engine has been inspected in accordance with an annual inspection and was determined to be in an airworthy condition."

However, it is important to note that this language is different than the language that would be used in the entry that your IA would make in the aircraft's logbook to document completion of the annual inspection and returning the whole aircraft to service rather than its individual components. In that case, your IA would use language referencing the "aircraft" rather than an individual appliance/component such as the engine or propeller. And in both cases the logbook entries would likely contain more detail regarding what was found during the inspection and any maintenance performed on the aircraft or appliance/component.

So, now we know both how and where your IA is supposed to document the annual inspection of your aircraft in order to comply with the regulations and keep the FAA happy. I'll save a more detailed discussion of what should and should not be included in maintenance entries for another day.

When is the 100-Hour Inspection Due for Aircraft Used for Rental and Flight Instruction?

If you work for or operate an FBO or flight school that offers aircraft rental as well as flight instruction, whether Part 61 or 141, you know the timing for completing aircraft inspections can sometimes be confusing. Now, I'm not talking about the annual inspection that must be conducted on all aircraft every twelve calendar months or sooner pursuant to 14 C.F.R. 91.409(a). That requirement isn't particularly confusing. Rather, it is the 100-hour inspection under 14 C.F.R. 91.409(b) and its timing and limitations that are sometimes misunderstood.

Section 91.409(b) states that "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." Thus, unless the aircraft is subject to a progressive inspection program, or is a large aircraft (to which 14 C.F.R. Part 125 is not applicable), turbojet multiengine aircraft, turbopropeller-powered multiengine aircraft, or turbine-powered rotorcraft which has selected an inspection program under Section 91.409(f), then that aircraft must receive an annual or 100-hour inspection if it is going to be used for flight instruction.

Keep in mind that the 100-hour limitation may be exceeded by up to 10 hours as long as that time accrues while the aircraft is enroute to reach a place where the inspection can be done. However, if that happens, the additional time used to fly to the facility performing the inspection must be included in computing the next 100 hours of time for the aircraft to be in service.

Now, in order to determine whether the 100-hour inspection is required for an aircraft that is used for both flight instruction and rental, and when that inspection is due, we need to look at how the aircraft is operated during a particular flight. And this is where some of the confusion occurs. If the flight is operated for the purposes of providing flight instruction, then the aircraft must have had an annual or 100-hour inspection within the preceding 100 hours of time in service. But if the aircraft is simply rented to a customer without a pilot or flight instructor, then the aircraft need not have had an annual or 100-hour inspection within the preceding 100 hours of time in service.

How does this apply in real-life? Here are some scenarios where the FBO or flight school uses an aircraft for both flight instruction and rental and how Section 91.409(b) may or may not apply to the example flights.

Example 1: A customer reserves an aircraft for rental only and anticipates flying approximately 10 hours. When the customer reserves the aircraft, it has a total of 95 hours of time in service since the aircraft's last annual inspection. If the customer's flight does not exceed 10 hours and a 100-hour inspection is performed upon the aircraft's return, does this violate Section 91.409(b)? No, because the aircraft is not being operated for hire or to provide flight instruction. In fact, when the customer returns the aircraft does not need an annual or 100-hour inspection unless it is going to be used for flight instruction, or 12 calendar months have elapsed since the aircraft's last annual inspection.

Example 2: The FBO or flight school dispatches an aircraft on a local training flight with a flight instructor and student pilot that is anticipated to, and does last one hour. At the time of dispatch, the aircraft has accumulated 99.9 hours of time in service since the aircraft's last inspection. A 100-hour inspection of the aircraft is performed when the aircraft returns from the flight.

Is this a violation of Section 91.409(b)? Yes, because the flight instructor and student pilot clearly intend to fly beyond the 100-hour limitation during their training flight. The 10-hour grace period does not apply because the aircraft was not being flown enroute to a location where the inspection will be performed. Rather, the aircraft was operated on a local training flight which does not benefit from the 10-hour grace period. As a result, Section 91.409(b) is violated after the first tenth of an hour during the training flight. If the FBO or flight school wants to continue to use the aircraft for flight instruction after this flight, an annual or 100-hour inspection must be performed and the next inspection after that must be performed before the next 91 hours of time in service.

Example 3: An aircraft is dispatched on a cross country training flight with a flight instructor and student pilot. The flight is anticipated to take 1.5 hours of flight time to the destination and also 1.5 hours of flight time on the return trip. When the flight departs, the aircraft has accumulated 97 hours of time in service since its last inspection. During the cross country flight, unexpected winds and ATC vectoring result in the trip taking a total of 3.1 hours flight time. Upon return, a 100-hour inspection of the aircraft is conducted.

This situation does not violate Section 91.409(b). Why? The flight instructor and student pilot did not intend to overfly the 100-hour limitation. Additionally, the 100-hour limitation was exceeded while the aircraft was enroute to a location where the required inspection will be performed (e.g. the original departure airport). When the aircraft returns, an annual or 100-hour inspection will be required before the aircraft may be used for flight instruction, and the next inspection after that must be performed before the next 99.9 hours of time in service in order to continue to use the aircraft for flight instruction.

Example 4: An FBO or flight school owns an aircraft that has accumulated 100-hours since its last inspection. Although the aircraft is used for flight instruction, an inspection cannot be performed within the next week. As a result, the aircraft's schedule is marked "for rental use only." During the next week the aircraft is rented to customers, without a flight instructor, who accumulate a total of 15 hours of flight time. Additionally, no flight instruction is performed with the aircraft during the week.

Similar to Example 1, this situation does not violate Section 91.409(b). The 100-hour inspection requirement does not apply to aircraft operated for rental purposes and the FBO or flight school is free to rent the aircraft to customers as long as it is not providing a flight instructor or pilot and the customer is not operating the aircraft for hire. However, before the aircraft is again used for flight instruction an annual or 100-hour inspection must be performed and the next inspection after that must be performed before the next 85 hours of time in service in order to continue to use the aircraft for flight instruction.

As you can see, in order to apply Section 91.409(b)'s 100-hour inspection limitation it is important to not only look at the purpose of a flight, but also the intention of the operator in conducting the flight. Further, as is the case with all areas of regulatory compliance, it is critical that you have documentation or other evidence to be able to prove the purpose and intention for the flight. Aircraft schedules and rental agreements should include the purpose of the flight (e.g. rental or flight instruction) as well as the intentions for the flight (e.g. local, cross country etc.). With an understanding of Section 91.409(b)'s limitations and documentation in hand, you will be able to prove that you properly performed your 100-hour inspections in compliance with the regulations.

FAA Updates Its Compliance Philosophy: A Move in the Right Direction?

The FAA has issued Order 8000.373 effective June 26, 2015 to explain its current compliance philosophy. That is, as the FAA explains it, its "strategic safety oversight approach to meet the challenges of today's rapidly changing aerospace system." What does that mean? Well, as the regulator of the aviation and aerospace communities, the FAA is charged with establishing regulatory standards to ensure that operations in the National Airspace System are conducted safely. And as we all know, compliance with those regulatory standards is mandatory.

However, not only does the FAA expect us to comply with the regulations, but it also believes that we have "a duty to develop and use processes and procedures that will prevent deviation from regulatory standards." Thus, we are required to conduct ourselves in a way that not only complies with the regulations, but that will also ensure that deviations are prevented. Sounds great, until something (e.g. a deviation) happens. Then what? In the past, the result was typically unpleasant. But that may be changing.

According to the FAA's new philosophy, "[W]hen deviations from regulatory standards do occur, the FAA's goal is to use the most effective means to return an individual or entity that holds an FAA certificate, approval, authorization, permit or license to full compliance and to prevent recurrence." This appears to be a shift from the FAA's past compliance philosophy. At least from my perspective, in the past the FAA's response to violations has leaned heavily toward enforcement and punitive action (e.g. certificate suspensions and revocations). And that approach never made sense to me.

If we truly want to encourage compliance and ensure that a certificate holder is safe, why would we want that certificate holder to be sitting on the ramp and out of the system for 30-180 days or longer with a suspended certificate? Wouldn't it make more sense to educate certificate holders and do what may be necessary to get them back into compliance and in a position where future compliance is more likely?

The FAA's current policy appears to be a step in this direction, at least on paper. The Order explains that

The FAA recognizes that some deviations arise from factors such as flawed procedures, simple mistakes, lack of understanding, or diminished skills. The Agency believes that deviations of this nature can most effectively be corrected through root cause analysis and training, education or other appropriate improvements to procedures or training programs for regulated entities, which are documented and verified to ensure effectiveness.

Sounds to me like the FAA is talking about letters of correction with remedial training. I think that's a good thing. The Order also notes that "[M]atters involving competence or qualification of certificate, license or permit holders will be addressed with appropriate remedial measures, which might include retraining or enforcement." Here again, the concept of retraining rather than enforcement (which was typically revocation in cases involving alleged incompetence or lack of qualification) appears to more appropriately address the situation in a more positive and productive manner. Maybe not in all cases, but hopefully more cases than in the past.

Of course, this doesn't mean that certificate and civil penalty actions will go away. If a certificate holder fails or refuses to take steps to remediate deviations or is involved in repeated deviations then enforcement may result. That makes sense. Additionally, in those situations where a certificate holder's conduct was intentional or reckless, the FAA indicates that it will pursue "strong enforcement." Also not a surprise.

Although this appears to be a positive shift in the FAA's philosophy/national policy, the rubber really hits the runway with the inspectors at the FSDO level. Will this policy shift actually trickle down? I hope so. But only time will tell.