The Sharing Expense Misunderstanding

We all want to save money, and the Federal Aviation Regulations (FARs) outline the privileges and limitations of a Private Pilot in FAR 61.118 in that regard — but how well do you understand them? One of the most remembered parts of the rules states: ‘A Private Pilot may share the operating expenses of a flight with his passengers.’ We are also quick to realize that this regulation does not say that expenses must be shared equally. But there are some major misunderstandings about this rule.

The paragraph at the beginning of 61.118 says: ‘A Private Pilot may NOT act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire.’ The intent of Part 61 is to prevent Private Pilots from becoming professional pilots until they get further training and certificates. But the ‘shared expenses‘ rule seems to be an exception to the ‘no compensation or hire‘ rule. When is it legal to share expenses with passengers and when is it not legal? The answer seems to lie within the original intent or reason for the flight. Look at these two similar examples.

EXAMPLE 1: A Private Pilot is walking out the door of the FBO to preflight a single engine rented airplane plans to fly to another airport 100 miles away in order to practice VFR navigation and to build his cross country flight time. A friend of his sees him walking to the plane and calls to him. ‘Do you mind if I ride along with you?’ The Private Pilot remembers the ‘sharing expense‘ rule and says, ‘Sure you can ride along, but this flight is going to cost me about one hundred bucks, do you mind chipping in a little of the cost?’ The passenger agrees to help pay and they takeoff.

SITUATION 2: A relative of a Private Pilot calls and says that he must attend a meeting in a city 100 miles away. The relative asks if the Private Pilot could fly him to the city for the meeting. The Private Pilot says, ‘Sure, I’ll fly you over there, but that trip will cost about one hundred bucks, do you mind chipping in a little of the cost?’ The relative agrees and the Private Pilot takes the relative to the meeting.

Are these ‘shared expense‘ flights legal? They could both be to the same airport, they could both cost the same, and they could have a passenger sharing expenses of the exact same dollar amount. But the FAA currently does not think they are the same. The FAA feels that situation 2 is a direct violation of FAR 61.118.

What’s Wrong? The second situation is a violation because of the reason for the flight — this flight would never have taken place at all if it were not to transport a passenger. Transporting a passenger is an ‘air charter operation‘ that is governed by Part 119. FAR Part 119 does not allow Private Pilots to operate as air charter, or on-demand air taxi pilots.

The regulation is, therefore, about the intent of the flight, not the action of making the flight.

Look at a recent case where the FAA Administrator took enforcement action against a Private Pilot. The Private Pilot in question got a telephone call in the middle of the night from a neighbor. The neighbor had discovered that his father had fallen ill and wanted the Private Pilot to immediately fly him to see the sick father. The Private Pilot packed up and together with the neighbor took off at 4 a.m. on a mission of mercy. On the way to the airport the Private Pilot asked the neighbor to share expenses of the flight, which the neighbor gladly did at the time. But later, the neighbor thought the shared cost of the flight was excessive and called the FAA and asked a question about how much an airplane would cost to fly. The end result was an FAA issued emergency revocation of the Private Pilot’s certificate.

LEGAL BREAKDOWN — Beyond What Meets The Eye
During the investigation of this Private Pilot, the FAA turned up two other flights that they felt were violations. One took place when the Private Pilot flew in a guest speaker to his child’s school science fair. The Private Pilot took a tax deduction for the flight on the basis that the cost of the flight was his donation to a charity. The other flight in question involved the transportation of an elderly lady across the state to consult with a physician about her medical treatment. Maybe this guy should have been nominated for citizen of the year! But the FAA didn’t see it that way.

In the case of each flight, the FAA charged that the Private Pilot accepted compensation in the form of money or tax advantage that was outside the law. The FAA believed that the original intent of each flight was to transport another person — the only reason the flights were taken in the first place was to carry a passenger. If the passenger had not needed transportation the flight would not have been made at all … the way the FAA saw it, anyway. The Private Pilot had not originally planned on making these flights, so shared expenses in these cases were illegal compensation. A judge agreed with the FAA (Docket number SE-12735) and suspended the Private Pilot’s certificate for 180 days.

You are saying now, ‘How can the FAA possibly know my true intent on any flight?’ The answer is, obviously, that they really can’t. If you really want to, you can argue these rules back and forth until we all run out of breath. But you should be careful — and honorable — and use your Private Pilot Certificate for the purpose it was intended. The FAA knows that people violate the shared expense rule everyday… maybe that’s why they are so eager to go after the ones they do catch!