Enterprising but is it legal?

[Unusual Attitude]

Spotted this on fleabay:-

http://bit.ly/R0CX09

Hats off to the chap for thinking out of the box but I do wonder about the legality of getting around needing an AOC? :cool:

UA

[Pace]

If he is selling a genuine 1/4 share in an aircraft for £1200 (Cannot be much of an aircraft) Has the correct commercial licences and is offering his services to fly non pilot owners around then yes its legal.
But what sort of aircraft will you get for £1200 for a quarter share?
Sounds fishy as surely a Rallye is worth more than £4800?

Pace

[Torque Tonight]

Doesn't say 1/4 share anywhere, in fact I think groups can have up to 20 shares. I would think it was probably legal as those paying for the flights are owners of the aircraft, even if they are non-pilots.

[peterh337]

This one was done well on Flyer and there was IIRC no consensus as to whether this was legal.

[Unusual Attitude]

My next question was going to be how he is getting paid but if it's 20 shares at £150 each per month then that answers that question!

Wonder what the contract says about maintenance costs if something needs repaired / replaced?

Interesting concept if done right however....

[Pace]

Doesn't say 1/4 share anywhere, in fact I think groups can have up to 20 shares

Sorry my mistake read it too quick :{ If a genuine owner who does not fly wants to hire a commercial pilot to fly it for him then there is no problem with that infact there is nothing enterprising about it either!
The enterprising bit is sticking the idea on E BAY see if he gets any takers

Pace

[xj8driver]

The web site mentioned in the ad is currently 'unavailable' :confused:

[znww5]

Is this not the same model as the Spitfire group, where membership entitles people to a certain number of flights/hours per year - pilot or not?

[Sir Niall Dementia]

The CAA have looked at this a few times, IIRC the share must be an equity share for the scheme to be legal, and therefor it must have a value at which the share owner can sell it on. If the theory is that you pay £1200 AND THE SHARE DEVALUES AT £100 per month over a year and then you re-purchase then it is not a true equity share and is in fact highly illegal.

But a Rallye?? Much as I love them I can't imagine many slower, or more uncomfortable aircraft for the job. The ad says Fenland-Inverness in 3 hours, it is, just, but what about in winter, in icing, turbulence and other horrors, the share owner will want to go and will get mighty stroppy when told "no"

has all the makings of another commercial failure.

[Genghis the Engineer]

But a Rallye??

Indeed - I'd have thought something like a C182 would give rather better utility and comfort at similar running costs and field performance.

De-icing capability would be nice, but a lot more expensive.

Isn't the business model basically the same as Netjets' , just with several zeros dropped off both the price and capability?

G

[fwjc]

If it's the same model as NetJets, isn't it necessary to have an AOC?

The same contact phone numbers appear on an aerial photo service at myskypics dot com. If he's using the same aircraft for that, it seems quite limiting.

Plus his ARC is showing as due to expire this weekend (may be not yet updated, of course)

[peterh337]

If the theory is that you pay £1200 AND THE SHARE DEVALUES AT £100 per month over a year and then you re-purchase then it is not a true equity share and is in fact highly illegal.

I am sure you know this but it isn't illegal as such; it just becomes "rental" and you lose the concessions on lower grade maintenance etc (the old Private CofA).

If you maintain to the Transport CofA level then you can sell whatever shares you like :)

I can't get my head around the legalities of that Ebay proposal but I suspect he is playing one of the old wheezes that explore ANO ambiguities. The CAA occassionally prosecutes them but reportedly always settles the case on the court steps, avoiding it properly tested.

Years ago there was a chap in Scotland doing something like this. I have only a very vague recollection but he was using a two-company structure. The CAA prosecuted him a few times but always failed to get a conviction. I am sure old timers here will remember it.

An obvious wheeze would be to own the company that owns the plane (or better still get your wife to own that company) and you rent the plane from the company for say £1000/hr (for a PA28 :) ). You can then carry 3 people, them paying £750 total. There is no doubt this is legit, because your "direct cost" is £1000/hr. The fact that from the £1000 rent you pay into the company you then recover it, minus taxes etc, via a salary or dividend from the company does not make it illegal. If it was illegal, no instructor or other employee of any business that owns planes (e.g. a flying school) would be allowed to rent a plane from his organisation and cost share it.

[maxred]

There have been a number of loose arrangements around the ANO. There were actually several notable ones in Scotland.

I operated a De Havilland Chipmunk. I had a couple of aircraft, was not flying the Chipmunk much, other than displays, and I was approached to do air experience flights. I set up a 'club' , advertised the Air Experience, and was inundated. The premise was simple, join my club for the day, get a free flight. Everyone benefited. Lots of people got - air experience in a vintage plane, I got lots of hours, and to be honest the fee's generated contributed to the maintenance. Did not, contrary to the jealous zealots, make much money.

However, someone phoned Gatwick, I was threatened with imprisonment, plane impounded et al. End of experience flights. I did contest it, but they said they would send it legal. Life is too short, so dropped it. Shame really.

What was that about enterprising Britain??

[Genghis the Engineer]

If it's the same model as NetJets, isn't it necessary to have an AOC?

The same contact phone numbers appear on an aerial photo service at myskypics dot com. If he's using the same aircraft for that, it seems quite limiting.

Plus his ARC is showing as due to expire this weekend (may be not yet updated, of course)

ARCs expire - you renew them. If there's a 2 week gap and you don't fly in that 2 weeks, no issue.

Okay, not quite identical to all of Netjets operation - but the principle of partial ownership, pay for operations, is part of their business plan and doesn't so far as I can see require an AOC.

Crap aeroplane, but the rest looks entirely reasonable.

G

[peterh337]

I am sure an expert will come in soon but I believe Netjets operate under a Portugese AOC, which allows their particular type of operation.

It's a kind of fractional ownership. That's another arrangement which is common in the USA and well supported by legislation there but has been a difficult area in the UK. One UK outfit, now defunct, were briefly operating some TBM700s, N-reg, in that way, and claimed they had DfT permission for it. I am sure they did. But it probably could not have been done with G-reg planes.

[Genghis the Engineer]

I did say business model, not regulatory model.

G

[Unusual Attitude]

Eddie Todd did something similar with his "Fast Jet Club" scheme.

You paid XXXX to buy a membership to the club and as part of that membership you got a flight in his Mk4 JP, CAA seemed to let him get away with it for years and the only reason he stopped was when the aircraft ran out of FI. Remember seeing it on Ebay for sale with no permit.....

Then again there are others that have been doing JP flights for fare paying punters for years without getting caught.... :rolleyes:

[maxred]

Yes, I flew with Eddie a couple of times. A very interesting experience.

The club concept, in my opinion, was a very good idea. It did no harm to anyone, got hours on the airframe, and got a lot of people in the air, in machines, that they may never get the opportunity.

I understand the ANO, argument, the guys spend a lot of time and effort into getting it, then maintaining it. That said, there could have been a watered down, ANO, structure that could have opened a market. It was a no discussion with the CAA.

Lots of machines could be in the air, promoting positively, GA, and flying. Driven 'underground', only opens up more inventive ways of getting round having a full ANO. Problem is, lots just give up and don't bother. It may change one day, and that would be beneficial.

[peterh337]

Selling hour blocks up front, as a measure of entitlement to airborne time or whatever, is not uncommon. The SR22 "147" group does it, as do others.

It encourages long term customer participation :E and currency on type which is what you don't get with straight rental.