Thank you for your email, dated 15 February 2023, answering my questions sent on 2 February 2023.
I am particularly surprised by CASA’s answer to my question 4 and I am not sure what CASA’s answer to my question 5 means. The scenario for those questions was:
Scenario for questions 4 and 5: I conduct a flight as PIC in an aircraft with a maximum seat configuration of not more than 6, including the pilot seat. I have 3 passengers. I am not remunerated for the flight. The flight is not advertised to the general public. I bear the entirety of the direct costs of the flight.
My question 4 was:
Do you comprehend that the flight in that scenario meets the definition of one that is “cost-sharing”?
CASA’s answer to that question was:
I interpret that answer as meaning that CASA’s opinion is that the flight in the above scenario is not one that is ‘cost-sharing’.
I note that in answer to a subsequent question (question 6) in my email of 2 February 2023, based on the same scenario except that the POB other than the PIC met some of the direct costs of the flight, CASA agreed that the flight in that scenario is ‘cost-sharing’. However, I also note that in further questions (7 and 8) based on the same scenario except that persons other than POB met some of the direct costs of the flight, CASA’s opinion is that the flight in those scenarios is not ‘cost-sharing’. This is because, in CASA’s opinion, the payment from a non-POB is ‘remuneration’ of the PIC, notwithstanding that the ‘dollars out of the PIC’s pocket’ in direct costs are the same as if they would be if the POB had met the same costs.
I interpret the combination of CASA’s answers in the context of the different scenarios as meaning that CASA interprets the definition of ‘cost-sharing’ such that:
- A flight will not be ‘cost-sharing’ if the PIC meets the entirety of the direct costs of the flight.
- A flight will not be ‘cost-sharing’ unless at least ‘some’ of the direct costs of the flight are met by POB other than the PIC.
- A flight will not be ‘cost-sharing if any person other than POB meets any of the direct costs of the flight.
Question 1: Can you please confirm that CASA’s opinion is that a flight will not be ‘cost-sharing’ if the PIC meets the entirety of the direct costs of the flight?
Question 2: Can you please confirm that CASA’s opinion is that a flight will not be ‘cost-sharing’ unless at least ‘some’ of the direct costs of the flight are met by POB other than the PIC?
Question 3: Can you please confirm that CASA’s opinion is that a flight will not be ‘cost-sharing’ if any person other than POB meets any of the direct costs of the flight?
Question 4: If it is CASA’s opinion that a flight will not be ‘cost-sharing’ unless at least ‘some’ of the direct costs of the flight are met by POB other than the PIC:
(a) what is the minimum amount of the direct costs to be met by POB other than the PIC?
(b) do each of the POB other than the PIC have to meet some of the direct costs?
Question 5: For example, in CASA’s opinion, can a flight with 3 passengers be a ‘cost-sharing’ flight if I, as PIC, meet at least a quarter of the direct costs of the flight and:
(a) only one of the 3 passengers meets the balance of the direct costs of the flight?
(b) only two of the 3 passengers between them meet the balance of the direct costs of the flight?
(c) all 3 of the passengers between them meet the balance of the direct costs of the flight?
Question 6: If CASA’s opinion is that more than one of the 3 passengers, or all of the 3 passengers, must meet the balance of the direct costs of the flight in order for it to be ‘cost-sharing’, what is CASA’s opinion as to the ratio of those passengers’ payment? For example, must they share, equally, the balance of the direct costs?
Question 7: Does it make any difference to CASA’s answer to questions 5 or 6 if the balance of the direct costs of the flight is $1?
Question 8: If the answer to question 7 is ‘yes’, what is CASA’s opinion as to the minimum balance – expressed in dollar or percentage terms - of the direct costs to be met by one or more of all of the passengers, in order for the flight to be a ‘cost-sharing’ flight?
Question 9: Where does CASA find all these nuances in the plain words of the definition of a ‘cost-sharing’ flight?
On the plain words of that definition, a PIC who meets the entirety of the direct costs of a flight has, literally, paid an amount of the direct costs that is at least equal to the amount that would be paid – note: “would be paid” not “are” paid - by each person if the direct costs were evenly divided – note: “if” not “are” evenly divided - between all POB. The definition has been drafted expressly on the basis that the direct costs do not have to be shared equally by the POB. That was one of the flaws in the previous definition.
The current definition has been expressly drafted on the basis that the PIC’s contribution to direct costs can be greater than the PIC’s nominal ‘share’ of the direct costs. The definition says nothing about who has to bear the balance, if any, of the direct costs of the flight after the PIC has met “at least” the PIC’s nominal ‘share’. And it is patently absurd to suggest that there is some safety consequence arising from the difference between the PIC meeting all of the direct costs compared with, for example, the other POB meeting some of those costs, such that there is some safety justification for reading (many) words into the definition.
As noted at the start of this email, I am not sure what CASA meant by its answer to my question 5 of 2 February 2023. My question 5 was:
Where is the hire and reward in that scenario [in which the PIC meets the entirety of the direct costs of a flight]?
CASA’s answer was:
See previous answer.
The ‘previous answer’ was the one which I interpret as meaning that CASA’s opinion is that a flight in which the PIC meets the entirety of the direct costs is not one that is ‘cost-sharing’.
My confusion arises because it does not automatically follow, from the fact that a flight is not ‘cost-sharing’ (in CASA’s opinion), that the flight is for ‘hire or reward’.
Question 10: If I as PIC meet the entirety of the direct costs of a flight, with the corollary being that no one else is meeting any of the direct costs of the flight, and I receive nothing from anyone for anything connected with the flight, what, in CASA’s opinion, is the precise nature and source of any ‘hire or reward’ connected with that flight? And to close off any potential distractions: I’m flying my own aircraft, so please focus on ‘reward’.
Scenario for question 12: I conduct a flight as PIC in an aircraft with a maximum seat configuration of not more than 6, including the pilot seat. I am not remunerated for the flight. The flight is not advertised to the general public. The direct costs of the flight are borne by the POB, including the PIC, in whatever way CASA reckons satisfies that element of the definition of ‘cost-sharing’.
There are 7 passengers. My partner in the front right seat, a couple of our friends are in the second row and their 4 children are carried in accordance with AC91-18v1.1 para 3.2 in row three.
Question 12: Does CASA comprehend that the flight in this scenario is a ‘cost-sharing’ flight with 8 POB and, as a ‘cost-sharing’ flight, is not a ‘passenger carrying operation’ and, consequently, is not an ‘air transport operation’?
Question 13: If CASA’s answer to question 12 is ‘no’, could CASA explain why its answer is ‘no’?