The privileges and limitations conferred by a pilot certificate should be reviewed before being exercised because compliance issues can easily arise. Under 14 C.F.R. § 61.113, a private pilot generally may not act as PIC for compensation or hire and may not act as PIC of an aircraft carrying persons or property for compensation or hire, subject to limited exceptions such as permissible expense sharing.
Let’s look at an example. Bill owns an aircraft and wants a private pilot named Joe to fly him to a business meeting. Clearly, Joe has no reason to attend this meeting other than to fly Bill there. Bill says he is going to pay Joe in cash and cover the operational expenses of the flight. In that scenario, FAA compliance issues often arise when a flight begins to look more like a transportation service than a personal flight. While direct payment to the pilot is a common red flag, the FAA evaluates the entire arrangement.
The FAA would have a problem with this flight for several reasons, even though Joe did not take any money home. Section 61.113(c) permits a private pilot to share a flight’s operating expenses with passengers, provided the pilot pays at least a pro rata share of those expenses. The allowable operating expenses are limited to fuel, oil, airport expenditures, and aircraft rental fees. Under our facts, Joe did not pay his pro rata share; Bill paid everything. This is not permissible for a private pilot under § 61.113.
Moreover, satisfying the pro rata expense-sharing requirement alone is not sufficient. The FAA has consistently interpreted § 61.113(c) to require that the pilot and passengers share a bona fide common purpose for the flight and that the pilot have an independent reason for traveling to the destination. In other words, a private pilot may not simply transport a passenger to the passenger’s destination and rely on the expense-sharing exception as a means of avoiding the prohibition against acting as PIC for compensation or hire.
In the example discussed above, Bill chose the destination, and Joe did not have a purpose of his own for being in the city where Bill’s meeting was being held. Therefore, this is an example of a situation in which no common purpose exists. As a result, expense sharing would not be permitted under § 61.113(c), and the payment being received would be considered compensation for hire and therefore illegal.
When the FAA determines whether a bona fide common purpose exists, it does so on a case-by-case basis. This means the analysis depends on the particular facts and circumstances of each flight. The FAA considers whether the pilot chose to travel to the destination for personal reasons of his or her own or solely because the passenger needed transportation. If the pilot is not traveling for his or her own reason, it may suggest that the pilot is simply providing transportation in exchange for payment.
A common purpose does not mean that the pilot and passengers must be traveling for exactly the same reason. Rather, they may be traveling to the same destination for different reasons, provided the pilot has an independent reason for making the trip. The key is that the pilot must have a personal or business purpose of his or her own at the destination. If the pilot has no reason to be there other than taking passengers to their favorite lunch spot, then no common purpose exists.
A simple way to think about the test is this: Would the pilot have taken the flight anyway if the passengers had not helped pay for it? If the answer is yes, a common purpose likely exists. If the answer is no, and the flight would not have occurred without the passengers’ payment, then a common purpose likely does not exist.
The key takeaway is that seemingly informal arrangements between aircraft owners and private pilots can create unintended compliance risks. When the structure of an arrangement and the parties’ actual conduct do not align with the privileges and limitations of a private pilot certificate, the FAA may scrutinize the operation as unauthorized commercial activity. Careful planning and consultation with qualified aviation counsel can help ensure that both ownership and flight operations remain consistent with applicable FAA requirements.
