Private Flying Renumeration? [Archive]

bookworm

25th Apr 2004, 15:00

The ANO's Article 130 is the definitive text on this.

Generally speaking, a private flight is one for which no valuable consideration is given or promised in respect of the flight. Note that this doesn't necessarily mean that just you, the pilot, can't take remuneration. No one can.

There are a number of permitted exceptions to this:

1) Hiring an aircraft: while the aircraft must be on a PT C of A, the flight is classed as private for other purposes.

2) Reimbursement of costs for flying displays, races

3) Charity flights with the permission of the CAA (general permission is laid out in an AIC)

4) Cost sharing when no more than 4 people are carried and the flight is not advertised outside a flying club [Note also that the pilot may not be employed as pilot by the aircraft operator -- you can't cost share if a club instructor is the pilot.]

5) Reimbursement of direct costs by employers of the pilot

6) Contributions by co-owners to group funds

For details, see the ANO (CAP393).

PAUL101

25th Apr 2004, 17:05

BEagle and Bookworm. Many thanks for yr replies. Bookworm please assist further if poss. I have been through CAP393 (a rather large document and cannot find the sections containing similar text to yr message. Can you give me a section number?

I have found Schedule 8 Sect 1 and 2 but this more or less repeats what is in LASORs - any gen on percentage sharing or advertising criteria - in writing - as mentioned by BEagle gratefully received. Thank you for yr help.

bookworm

25th Apr 2004, 18:41

Paul

CAP393 is a collection of legislation. Section 1 is the Air Navigation Order. It consists of 134 numbered articles, and 15 Schedules, which are effectively appendices cited by the Articles. For convenience, the articles are divided up into parts, and Art 130 is in Part XI GENERAL, which is the part they put stuff in if they can't think of anywhere better. :) Rather unhelpfully, they don't bother to number the articles in the bookmarks in the PDF version. The article is entitled Public Transport and Aerial Work (which are the two other posibilities if a flight is not Private). It does not win a plain English award, hence I was simplifying with my list.

130(8) is the paragraph that deals with the cost sharing exemption. That says:

no information concerning the flight shall have been published or advertised prior to the commencement of the flight other than, in the case of an aircraft operated by a flying club, advertising wholly within the premises of such a flying club in which case all the persons carried on such a flight who are aged 18 years or over shall be members of that flying club;

Flying club does not actually appear to be defined anywhere!

FNG

25th Apr 2004, 19:24

See also the CAA's summary of the position in http://www.caa.co.uk/docs/122/summary_of_public_transport.pdf
I am always sceptical of the motivation for questions of these kinds from PPL holders, especially those with commercial flying aspirations. As I said on the other "please tell me how to do somewthing dodgy and get away with it" thread that is currently running, it's worth recalling what the first P in PPL stands for. If you want to fly for money, get a CPL.

eyeinthesky

25th Apr 2004, 20:39

QUOTE

4) Cost sharing when no more than 4 people are carried

UNQUOTE

This is an important one. Some people think it is dependent upon the number of seats in the aircraft. It is not. You can take a Navajo and cost share if you wish, but you can't have more than 4 people on board. Some people think a Cherokee Six is a great idea because costs are divided by 6, but unfortunately that's not the case.

Mike Cross

25th Apr 2004, 22:01

Paul 101 saidcan anyone tell me what a defintion of renumeration means Try looking in a dictionary:-
Remunerate - reward; pay for services rendered

If the legislators mean a term to have any meaning other than it's ordinary meaning then it will be specifically defined in the legislation (in this case the Air Navigation Order).

Mike

Flying Lawyer

26th Apr 2004, 06:23

Cost Sharing
The requirement is that the pilot must pay his proportionate share of the cost.
eg If there are 4 POB including the pilot, then the pilot must pay at least 25% of the cost.
There is no requirement that the cost is divided equally between the persons on board. The passengers may divide the remaining cost as they wish, or one may pay for all three passengers.

Private or Public Transport?
The ANO provides a number of very complicated tests and exceptions to determine whether a flight is private or public transport.
In the context of Paul 101's question -
Article 130 provides that (with specified exceptions) "an aircraft in flight shall for the purposes of this Order be deemed to fly for the purposes of public transport if valuable consideration is given or promised for the carriage of passengers or cargo in the aircraft on that flight."

If 'remuneration' was the test for determining whether a flight is a private or public transport, it would be easy to apply. However, nothing in UK aviation legislation is ever that easy to understand or apply, so the pilot has to ask himself whether 'valuable consideration' has been given or promised. To assist him, the ANO provides a helpful definition:
'Valuable consideration' "means any right, interest, profit or benefit, forbearance, detriment, loss or responsibility accruing, given, suffered or undertaken pursuant to an agreement, which is of more than a nominal nature."
This definition is not only very difficult to understand but extremely wide - far wider than remuneration.

I can't vouch for the accuracy of the following example (I wasn't involved in the case) but I'm told the owner of a flying school was prosecuted for illegal public transport in these circumstances:
He agreed to fly some local 'celeb' to publicise a local event, providing both the helicopter and his services completely free of charge. He was prosecuted by the CAA for illegal public transport on the basis that, because the school's name was on the side of the helicopter, he obtained 'valuable consideration' in the form of publicity in the local press and on the local tv station.
I'm told he balanced the costs of fighting the case and paying the CAA's costs if he lost the case against the cost of just pleading guilty, paying the fine and a smaller sum in costs - and decided to plead guilty.

FNG

26th Apr 2004, 06:50

I have to say that I disagree that the definition is difficult to understand. Doing my best to think how I'd find it if I were not a lawyer, I still don't think that it's that hard to follow. Valuable consideration is something of value to the recipient, and free publicity might well count as such.

PS: looking at our respective posting times, there's too much getting up early in EC4

Flying Lawyer

26th Apr 2004, 07:53

FNG
You don't find the definition difficult to understand because you are a lawyer. I learned about 'valuable consideration' in the first few Contract lectures as student; you probably did too. But most non-lawyers don't know what it means, and I suspect very few of those who do know would realise how many things might fall within the very wide definition. I regularly deal with pilots trying to understand aviation legislation, or who have fallen foul of it. Not only do they frequently find it difficult to understand, but I can readily see why. Plain English hasn't reached aviation legislation yet!
In the context of this question .....
Most PPLs believe (wrongly) that the test is 'payment'* or 'remuneration' and honestly believe they are doing nothing illegal as long as they aren't being paid, either for the use of the aircraft or for flying it.
I wonder what proportion would realise their company name on the aircraft would in itself be enough to get them into trouble - or even think about that aspect. I know it came as a shock to the owner in question when he was prosecuted.
You say free publicity "might well" count as valuable consideration. Does that mean you're not certain, or that it depends upon the circumstances? If (as I assume) the latter, isn't it quite difficult for a non-lawyer to determine which circumstances fall inside or outside the law?

(*The CAA's own document to which you provided a link, refers throughout to 'payment'. Granted, there's a warning to look at the ANO itself which refers to 'valuable consideration' and makes no reference to payment, but IMHO it's rather harsh to criticise PPLs thinking in terms of 'payment' when the CAA does the same thing.)

Re your comment in your previous post:
I agree questions like Paul 101's can sometimes be attempts to evade the law, but they are often questions by people who are thinking of doing something, want to make absolutely sure they wouldn't be doing anything illegal, and find the relevant provisions difficult to track down and/or understand. Pprune is a valuable source of information on all aviation matters so they ask here.

PS
I'm at 9-12 Bell Yard - let's meet some time if you're not bothered about losing you Pprune anonymity. :)

FNG

26th Apr 2004, 08:09

Flying Lawyer, I have attempted to consider how an educated lay person might understand the definition, and believe that such a person would find the concept which it expresses to be reasonably intelligible. It is of course virtually impossible for any piece of legislation to prescribe precisely the outcome in every conceivable situation, and those in doubt may need to seek legal advice. In a hypothetical case of free publicity, I would be inclined to regard the publicity as a benefit accruing to the aircraft operator. In such a hypothetical case, the operator might allow his or her decision to provide an aircraft to be influenced by the possibility of free advertising, in which case he or she could hardly be described as a naive innocent.

As to the possible motivation underlying questions such as that raised in this thread, you are perhaps more charitably inclined than I am in this respect. Note that the topic starter is looking for advice on advertising. Why push the envelope if you are not looking to see how many fivers you can stuff into it? It's a pity that all these PPL-entrepreneurs won't be able to set the costs of all this free advice against their profits. Ain't life unfair?

PS: FL, I'm at Blackstone Chambers, it would be a pleasure to meet you.

PPS: the CAA Summary explicitly makes the point that "valuable consideration" is wider than payment (last page)

Monocock

26th Apr 2004, 08:35

Is this what's known as "professional sparring"?

We do it in our industry too although it normally involves how much milk we can get from our best Friesian.

:D

FNG

26th Apr 2004, 08:38

...and there was I thinking that it was all about who has the most attractive sheep. It's good to learn how people live their lives. Pprune's like one great big Ladybird book really.

DRJAD

26th Apr 2004, 08:55

I must say I'm finding the debate between FL and FNG most interesting.

I suppose I'm one of the 'educated lay persons' to which FNG refers, since I'm not a lawyer, though I am taking an OU Law degree out of interest.

I haven't, though, studied this part of the ANO in detail, and had missed the subtlety of 'valuable consideration' as opposed to 'payment'. The meaning of the former phrase, though, does not seem obscure. I believe the possible confusion in this respect, possibly added to by language used in the publication from the CAA which has been cited, should be clarified by the CAA as soon as possible.

As far as I know, all private pilots are attempting to stay within the law: it ought to be straightforward for them to assure themselves that they are doing so. In the meantime, it is good to have fora such as Pprune where issues can be aired and debated.

BEagle

26th Apr 2004, 08:55

Contract Law. Quite brightened up an otherwise dull 3rd year Aero Eng course at QMC, that did! Karsales (Harrow) ltd v. Wallace 1956 - and, of course, Carlill v The Carbolic Smoke Ball Company 1891! Much more fun than trying to understand entropy and enthalpy!

Even the Eurobabble of JARs is easier to comprehend for the average person than the tortuous prose of the ANO.

Given that even the average educated lay person has difficulty in understanding the ANO due to its total lack of plain English, the old CAA argument of 'It is regulated by ANO Article blah' is perhaps almost reason in itself for a good defence, were one to fall foul of some obscure piece of legislation contained therein. Because the ANO might as well be written in Albanian, for all the sense it makes to many.

Which is why we are so lucky to have mates like Flying Lawyer and FNG around on PPRuNe to clarify matters pertaining thereto....

We (the CAA and I) recently drafted the new NPPL re-validation and renewal proposals. As written by me, it took up only a few lines. But as needed in the ANO, it will doubtless occupy many paragraphs, sub-paragraphs and include difficult-to-follow cross-referencing.

(PS - Are you still up for 8 May, Tudor? Pse see your private e-mails)

Enjoy quaffing claret in chambers, or whatever you legal chaps do at luncheon!

FNG

26th Apr 2004, 10:48

The problem of drafting to which Beagle refers stems, in my opinion, from the culture of the Parliamentary drafting offices, and this affects many fields of activity as well as aviation. UK legislation has a particular adherence to the ""If X then Y", "A, provided that B, except for C" approach to legal drafting. Lawyers in general have greatly improved their use of plain English over the last decade or so, but this culture change has not thus far penetrated to the Parliamentary draftspersons.

Claret over luncheon? Not these days. We have modernised our vices, so are more likely to had up for sending inappropriately worded emails to the girly pupils than for quaffing too much Chateau Glug. Hoorah for progress.

PS: when I was very little, I did a hilarious unfair dismissal case involving two of the waiters in the Judges' dining room at the Old Bailey (where the Great and Good are entertained) hurling claret decanters at each other in the scullery.

BEagle

26th Apr 2004, 11:06

Notwithstanding the aforementioned references to the worthies who draft the ANO, yes, the "Thou mayest not unless as provided for in sub-para blah or as excepted hereunder" BS really gets one's capricorn!

I wanted to write "To revalidate NPPL aeroplane ratings you may either (by proficiency check) or (by revalidation). To revalidate by experience, you must do the following in the 24 months before the expiry date: (etc))". Shall be interested to see how it finally appears in ANO-speak!

The nearest plain language explanations of licensing requirements are in LASORS - but even then there are references to JAA requirements which are not described. If they're going to quote JAA regs, then it's only fair to spell them out!

On the question of sending e-mails to girl pupils, be careful not to write what my brother once did on his e-memo system to his prospective new secretary: "I look forward to meeting you - my pen is poised!" Unfortunately he missed out the gap between 'pen' and 'is'!!!

Unfair, wrongful or constructive dismissal. That also had my head spinning in those law sessions of my Aero Eng degree in the early 1970s. Vaguely recall Donovan v Invicta Airways, I think it was?

FNG

26th Apr 2004, 11:35

Blimey, BEagle, you have a good memory. I can't remember the names of cases that I read yesterday, and I do it for a living. I wonder why the law bits of your engineering degree included such stuff? I had some fun defending BA on assorted dismissal raps a few years back (pished-up Pursers, mostly, rather than sacked Nigels), which got me some jump seat rides on the shuttle to Manchester.

Plain English legislation is a possibility. A good example is the Human Rights Act (or, more accurately, the Convention, scheduled to the Act), which was drafted for the most part by a Brit team led by Viscount Kilmuir in the late 1940s. Some of the clearest statutory drafting I know of dates from the late C19 (late Victorian Judges also wrote their judgments with sparkling clarity, economy and precision).

BEagle

26th Apr 2004, 11:51

Pugh vs London Brighton and South Coast Railway 1896(?) being such a case. If I recall it was judged that you didn't need to suffer actual physical injury to be considered as having suffered an accident?

Then there was the famous snail in the ginger beer bottle.....I'm sure you know that one!

No memory trick - just 5 or 6 cases remembered from many years ago in case I should ever need to refer to them!

Ludwig

26th Apr 2004, 12:01

Gentlemen, I wonder if I might ask a small related question, about when it is or isn’t legal, especially based on FL’s point about people who write their company name on the a/c getting valuable consideration by the publicity it generates

There are a growing number of aerobatic aircraft with sponsors names on them, either in little letters or massive letters. To the extent that these are flown by Professional licence holders that seems fine, but what about when they are flown by plain vanilla PPL’s who may own some or all of that aircraft. It would seem that even if all that is derived from the sponsor is say a free can of oil every 100 hours it is still valuable consideration, and would make it illegal? Presumably the same would apply to record attempts with loads of stickers on it?

One loop hole of which I have heard tell for PPL’s to be paid for display flying is to have someone else, e.g. girlfriend mother son etc, bill the display recipient for “organisation” and for the pilot to fly for free, often with something emblazed down the side. Is this OK
:ok:

FNG

26th Apr 2004, 12:25

The most interesting thing about the snail in the ginger beer bottle is that....there wasn't one. The whole of the modern law of negligence is built upon a hypothetical semi-decomposed snail. (Donohue v Stevenson went to the Lords on assumed facts. When it went back for trial, it was found that there was no snail in the bottle after all).

As for Ludwig's question, my head is too muzzy from lunchtime sunshine (not claret, honest) to delve into that one. Anyway, it's time for me to do some paid lawyering for a change.

Evo

26th Apr 2004, 12:27

Then there was the famous snail in the ginger beer bottle.....I'm sure you know that one!

I'm having all sorts of fun learning these at the moment :confused: but they are for the most part much more interesting than statutory law. Besides, some (such as the Carbolic smoke ball company) sound so improbable that i'm sure that you could make other cases up as required - i've been tempted to reference Grenouille v National Union of Miners to see if anybody notices... :)

(Donoghue v Stevenson btw - edit: d'oh, FNG beat me to it... )

IO540

26th Apr 2004, 14:26

FNG

I think you will find that a CPL is nearly worthless without the aircraft operator having an AOC.

It is the lack of an AOC for which flying schools have been prosecuted. This is also why pleasure flights have to be called "trial lessons". All the people involved have a CPL already.

I don't think the law is clear. The PPL cost sharing rule is clear when you rent a plane for £90 wet and fly 3 mates and then if you pay £10 landing fee they can reimburse you £75 max.

It gets less obvious if you own the plane personally, and do a flight to see a customer of your own business. You then invoice your company for some money. Is the reimbursement under PPL Cost Sharing Rules ? You had no passengers!

Whatever you think the answer is to the above, let's assume you are a 100% shareholder (and a Director) of a ltd co X which owns the plane. You are also a 100% shareholder (and a Director) of another ltd. co Y which is your main business, and you do a flight to a see a customer of Y. It is actually OK for X to invoice Y for the full cost, in fact X can invoice Y anything it likes. And X doesn't invoice you personally for the flight at all. I have it from the CAA that this is OK, and it is certainly standard practice.

FNG

26th Apr 2004, 14:51

IO540, I'm not the one looking for ways to do commercial flying on PPLs, or otherwise in questionable fashion. When I say "get a CPL", it's just a shorthand way of suggesting to the wannabes that they can forget about turning a profit on their private licences. The CAA is content for pilots to claim direct costs as a form of equivalent to motor mileage expenses for business trips. This is very different from being paid for flying on a PPL.

PS: Ludwig, I still can't be ersed to provide a detailed answer to your question, but wood containing loopholes may make for bad furniture. "Hello, I'm the pilot. I fly for free, but my granny over there charges £1000 a day for admin". Do people think that the CAA is completely stupid?

DRJAD

26th Apr 2004, 16:02

All the debate on here about legalities and subtleties of the ANO have now made me a little apprehensive, and I would be grateful for some advice.

If I, a PPL holder, were to decide to undertake a flight for a meeting in connection with my employment, would it be legal if:

a) I have a company car from that employer, and claim the mileage cost (at company car rates, not private rates) back from the employer?

b) I mention, at the aero club, etc., that I am making this flight, and would welcome one or two passengers to accompany me, and shadow the navigation if they wish?

c) I suggest to those passengers that they may wish to share costs of the flight, not more than £tot/number of passengers?

What makes this confusing is that I would be undertaking the flight in working time, exactly as if I were driving to the meeting venue in my company car.

Any opinions as to the legal position will be welcomed!

Capt. Manuvar

26th Apr 2004, 16:09

In this US, i believe it is common practice to use PPLs for business. Unfortunataly, in the UK there is a CPLs/ATPLs flying jets for business and PPLs flying grandma to norwich in a spamcan attitude.
I understand both sides of the argument, but i think that CAA need to have a flexible attitude on this issue. I agree that the interests of commercial operators and professional pilots need to be protected. iI know that there' s a tiny minority who will try to abuse the situation.
I think that the legislation should be changed to allow business flyers to make better use of PPLs and also to make the CPL more useful. I think a lot more can be done without compromising safety.
While you try to digest Ludwig's question, i think i'll throw in another for the aske of argument.
Is it illegal for a third party to pay for flight training e.g. parents, GAPAN, airlines?
Capt. M

FNG

26th Apr 2004, 16:09

Question (a) ???? Flying content apparently zero. Suggest you ask that question on the "Private Driving" forum of the Professional Driver's Rumour Network.

Questions (b) and (c), see the CAA's summary, linked to on the remuneration thread.

You can claim direct costs as travel expenses just as you might claim back a train fare. It would be naughty to claim from your employer the full direct costs but get paid a share of those by your pax, but you are never naughty, I am sure.

DRJAD

26th Apr 2004, 16:15

Thanks FNG.

Yes (a) is zero flying content, shouldn't have mentioned it! Other than to illustrate how the regulations, and multitudinous attempts to explain them, in the CAA publications and elsewhere, can cause confusion.

I'll consider myself lucky to get the business mileage reimbursed, let alone direct flight costs! No temptation there.

FNG

26th Apr 2004, 16:15

There's nothing in the rules to prevent you flying yourself to business meetings using your PPL, and plenty of people do it. As to the question "will my granny go to prison if she buys me a flying lesson?", after reading that I have resolved to drink myself to death, and so am unavailable for further comment.

IO540

26th Apr 2004, 16:17

FNG

Let's forget the passengers in this case. Is there a scale which the CAA approves of, for claiming back expenses from the employer?

This is why it is better to let the employer provide the aircraft (e.g. by renting it in) and in that case it is generally regarded as OK for the individual to do the flight, provided the individual (the P1) is an employee of the company on whose business the flight is, and provided the individual is not contractually required to fly.

I wish I had a reference for the above :O

If the man in this case gets to fly on his employer's business, in a plane provided FOC by the employer, and he takes passengers who offer/give him some money, personally I wouldn't touch that with a bargepole. At the very least, his employer can go after him for the money thus made. But non-paying passengers might be OK.

IO540

26th Apr 2004, 16:34

FNG

Unfortunately this thread needs merging with the other one.

You mention "profit" but why "profit"? Recovery of "direct costs" still results in a loss if the P1 is the owner, because there is no contribution towards the 50hr check, 150hr check, the annual, the engine fund, the prop fund, etc, etc.

This is why you have to be very clear.

As I say in the other thread, an individual can do a business flight if the employer provides the plane, and the employer is allowed to provide the plane free of charge (e.g. the employer owns the plane; the employer rents or leases it in, etc). This gets around whether the individual can recover just the fuel+landing fee, or some of the other costs.

That way, the individual doesn't lose out. What I don't know is whether he can be paid for the travelling time....

Now let's make the situation more clear as mud :)

Let's say an individual works, as a part-time lavatory cleaner, for a flying club, and one day he rents a plane in from that same flying club, and takes 3 passengers. Under the PPL cost sharing rules, this man can recover 75% of what the club charged him for the rental. OK so far. But remember the club charged MORE than the direct costs; the club can make a profit.

BUT this man also gets some money from the f.c. because the cleans the bogs there. Some of this money comes from the plane he rented. So in effect he is getting more than 75% reimbursed by his passengers.

Can you see the problem?

I actually wrote to the CAA about this, and astonishingly they replied that it is permissible. It has to be permissible, otherwise anybody working for a business that rents out planes, and doesn't have a CPL etc, could not rent a plane privately from the company and make full use of the PPL cost sharing rules.

But it is open to abuse because man X, controlling Director of Ltd Company Y that owns a plane Z, could rent Z from Y at £1000/hr, get 3 passengers to reimburse £750/hr. This money goes to Y but X can draw most of it as salary, and even after allowing for tax/NIC he is still recovering more than 75%. I was concerned about this some time ago, for obvious legitimate reasons (anyone drawing money from a company that owns a plane could inadvertently bust the PPL cost sharing rules), and I got a written reply from the CAA legal department that this is OK, though presumably only for more reasonable numbers. I inflated the rental merely to illustrate the point.

What it comes down to is that the CAA seeks to keep a lid on what people can do without having a CPL+AOC. The CAA wishes to maintain extra standards where people pay for transport, plus of course the CAA very much likes the very substantial fees they get for AOC issue and renewal :) But as my example shows, the regulations can't address every possible type of usage.

C.M.

I think that you can do business flights on both N-reg and G-reg (both Private and Transport CofA) provided you are employee of the company on whose busines the flight is, and you are not contractually required to fly.

Evo

26th Apr 2004, 16:35

I'll consider myself lucky to get the business mileage reimbursed, let alone direct flight costs!

Knowing who you work for, so would I! I've got to pay for myself to go to London on business on Weds... :)

FNG

26th Apr 2004, 17:00

Hic. Still alive, barely, although that one might just finish me off. Life ain't that complicated really. The source of the money with which the airborne bog cleaner pays his club rental (the average club spamcan resembling a flying khazi in any event) is irrelevant. He is not being paid to fly. His income is in no way flying related, and he isn't charging his mates (glad to hear that bog cleaners have mates) more than the proper share. Where's the problem? Time for another drink.

As for my reference to "profit"; really, IO540, you could wrestle a lawyer to the ground in a pedantry contest. I simply mean that PPLs shouldn't think that they can earn doubloons, shekels, zloties, wonga, clams or coppers through flying around in puddle jumpers. I really can't figure out why people think any of this is important. A PPL is for having fun with whilst gaily spending vast amounts of cash. Or it's a stepping stone on the way towards qualifying to be paid to fly, but not a means of obtaining such payment.

bobdee

26th Apr 2004, 17:33

Just to drag things back to frightening reality, I run a small consulting partnership. As far as I can see there is no problem in my hiring from the local club a mini spam can, flying to a business meeting and charging the full cost of the hire plus landing fees etc to myself as a business expense. The argument being, should there ever be one with the IR bods, that the alternative could have been a first class train fare which 98% of the time would heve been more expensive, but the latter would certainly by a 100% allowable expense.

IO540

26th Apr 2004, 18:05

bobdee

I agree; in fact it is better than that because the Revenue has no power to require that your chosen method of travel is the most economical. Otherwise, everybody would be forced to fly Ryanair and then take a bike.

Just make sure you have some documents supporting the flights, especially if it is done on a weekend and the business meeting is in Biarritz :O

FNG

May I suggest you stop being vague about this :O Let me go back to my previous example.

X is a Dir of Ltd Company Y that owns a plane Z.

He rents Z from Y for £1000/hr (inclusive), for 500 hrs/year. X always takes 3 passengers who pay him £750/hr. In a given year, X thus spends £500,000 and he recovers £365,000 under the PPL cost sharing rules. So he is £125,000 out of pocket - exactly what the CAA wants. The whole point of PPL Cost Sharing is that the pilot doesn't make any money. All legit so far?

But Y now has £500,000 in the bank. Assuming a £500k plane and generous 25% capital allowances, Y will have made a net profit of about £350,000. X can draw this out in a gross salary of £350,000. (I am avoiding dividends because the CT treatment and the 10% tax credit complicate matters). He takes home about £200k from this.

So he is no longer out of pocket. Yes, you are right, he was not paid to fly. But he's made £75,000.

But as you say, no problem.

Clearly, these things are OK in moderation.

strake

26th Apr 2004, 20:59

What a load of absolute B******s...!

Chap wants to fly to France with some chums..all agree to divi the cost..bit of lunch here, landing charge there, perhaps a slice of fuel.........this is PRIVATE flying for goodness sake.

FNG

26th Apr 2004, 21:16

I agree, Strake. Anyone that comes flying with me is welcome to buy me a beer later, or to volunteer a landing fee (although I shall likely refuse that). I shall buy my own fuel, thanks.

IO540, it is a jolly game to to conceive of a variety of wholly improbable scenarios which produce outcomes likely to be offensive to certain sub-sects of strict aviation Methodist, but, er...what is the point?

I am glad to say I shall be off radar for the rest of the week so shall not have occasion to read, or indeed to write, any more of this stuff.

Edit: Alas, the last bit proved untrue: blooming laptops.

paulo

26th Apr 2004, 21:48

Ludwig's question interests me.

I was pipe dreaming the other day. "Balloons! Yes, I'll get a balloon license!" (I probably won't - well, not for awhile). In one of the more informative sites they said that 70% of the balloons in the UK are sponsored. Now, with your ship paid for, that's most definitely a damn good consideration. Are they all CPLs?

I'm just curious - I'm not about to go 'playing' at being a pro, or bending rules that will snap back. I just find the fuzzy edges of the law very interesting.

Justiciar

27th Apr 2004, 12:38

This is a bit more likely scenario. I fly to a business meeting in an aircraft in which I hold a share. I am reimbursed the cost of the flight £60 per hour plus two landing fees by my company. I charge the client travel of 4 hours (2 there and two back) at £x per hour. Is that lawful?

Arguably it is not, as "... valuable consideration is given or promised in respect of the flight or the purpose of the flight" (ANO article 130(1)(a)), the purpose of the flight being to get me to a meeting with my client. My client is actually better off as had I gone by road it would have taken 4 hours each way, but that is irrelevent.

Coming back to the helicopter and the celebrity, any flight which results in a "profit or benefit" is aerial work. So, the business man on his business trip may well fall under article 130, whether he directly charges his client for travel time or not. If he thereby secures a deal or contract then he has certainly derived a 'benefit'. The only get out is that the benefit is not "undertaken pursuant to an agreement" where there is not deal or contract in place when the flight is made - though there may be on the way back:hmm:

70% of the balloons in the UK are sponsored. Now, with your ship paid for, that's most definitely a damn good consideration. Are they all CPLs?

Here valuable consideration is not given "in respect of the flight", since the sponsorship would be independent of any particular flight. It might be otherwise if the payment was on a per flight basis or there were particular or enhanced payments for particular flights, say at particular events.

PAUL101

27th Apr 2004, 13:03

Flying Lawyer, FNG and BEagle et al,

Many thanks for some very helpful information and clearly free legal advice. First point, I think amongst the legal profession there is understandably debate - that's one of the reasons we have a legal profession and ultimatey courts of law, is it not?

Second point, FNG you are a little harsh. Flying Lawyer was absolutely right I do not wish to cross the line, I also do not wish to even think of pinching CPL type work - I just wanted to know could I take some collegues airborne and split the cost - I am very grateful for the indepth information supplied.

Mike Cross, believe or not I do know how to use a dictionary (though with my spelling you can tell I don't bother to open it much) but as you can see I was not after the COD defintion of renumeration which you kindly supplied but the CAA/legal defintion and how that was applied - with no other reason than staying the right side of the CAA/law - as kindly explained by Flying Lawyer, FNG, BEagle.

I do not think is in the slightest bit unreasonable for a PPL to wish to stay the right side of the law (and of CPLs!) but seek to reduce costs to build hours - that is why I asked my original question.

Thank you to those of you have guided me to various publications and paragraph/schedules to read for myself. I have a MSc degree level education and considerable contract law experience so hopefully I can add the common sense element and find a way forward!

Cheers, Paul101

FNG

27th Apr 2004, 13:33

Ah, so that explains why you enquired about advertising.

Cost sharing is legal, but that doesn't mean that using it systematically to build hours is other than cheesy. If private flying is a hobby, can you think of another hobby in which the participant expects friends who do not share the hobby to subsidise it? If private flying is a route to an ATPL, can you think of another training course in which trainees expect friends to subsidise them? Trainee chefs inviting their friends to dinner and rendering a bill at the end of the evening? Service not included.

IO540

27th Apr 2004, 13:38

Justiciar

Coming back to the helicopter and the celebrity, any flight which results in a "profit or benefit" is aerial work. So, the business man on his business trip may well fall under article 130, whether he directly charges his client for travel time or not. If he thereby secures a deal or contract then he has certainly derived a 'benefit'. The only get out is that the benefit is not "undertaken pursuant to an agreement" where there is not deal or contract in place when the flight is made - though there may be on the way back

I see what you are getting at, but ... in this business, the bunch of people who should know more than anybody what is legal are the insurers. If a flight is illegal they can walk away.

My insurance says "private and business". It has a few named pilots, too, plus "anyone authorised by XYZ Ltd" (the company that owns the plane).

The insurer knows perfectly this is not an AOC operation. They also know the main pilot (me) is only a PPL+IMCR, not a CPL. On top of that, a CPL without an AOC has privileges so limited they are practically worthless, in the context of flying for money. Even spotting for traffic jams needs an AOC. Flying schools avoid the need for an AOC by the narrowest of margins legally, and the CAA wouldn't dare to insist because many would go under if they had to part with the fee, and not infrequently they get done by the CAA for stepping over the line.

Yet the insurer has issued the policy for "private and business".

Obviously, anyone doing a flight on business must be facing the possibility of the business improving as a result of the trip.

So there cannot be a problem :O

My feeling is that the lack of a contract to fly is the get-out.

Furthermore, I always make sure that if I do a business trip, any passengers are somehow connected with my business and not just somebody getting a lift. Also if I carry any commercial goods, they are wholly connected with my business.

Paul101

Please ignore people who have a go at somebody who wants to get to the bottom of these complicated matters. It is absolutely right to make sure one is legal. We all know that one is unlikely to get caught but that isn't the point.

Sadly, asking your favourite instructor is no good because more often than not he will give you a very confident but duff answer. And most PPL pilots have nobody else to ask.

FNG

Please stop moving the goalposts and fudging the ground in between them.

There is nothing wrong with getting people to subsidise one's flying. I rent out my plane, at slightly more than the direct hourly cost. So I get a contribution towards the fixed operating costs.

If somebody is learning while flying (doesn't that apply to everybody anyway) there is no harm in carrying people and getting them to pay something. They will learn too.

PAUL101

27th Apr 2004, 14:04

10540 - many thanks for your comments - thanks.

FNG - What? I've never mentioned advertising. Also, I suppose you would not be interested to know in the number of mates who have asked me for a flight and have volunteered to share costs - not one of them thought it was 'cheesy' (good word like it). They had a good flight, I flew with some good friends, which was fun in its self and we all did it at a reduced price. From all I have read this was perfectly okay, certainly not cheesy(!) and not many people would have any sort of problem with it. All without exception really enjoyed their flight (well perhaps they might have lied to me!). FNG, please calm down a bit, life's too short.

Kind regards,

Paul101

Justiciar

27th Apr 2004, 14:15

My feeling is that the lack of a contract to fly is the get-out.

Yes, I think that is the very important point. You would in theory only get problems if you had an on-going relationship with a customer or client, when it could be said there is an 'agreement', always remembering that legally there may be a contract found even where there is nothing in writing, and one might be inferred from a business relationship by the courts where you did not believe there was one. Of course it is also important to remember that the valuable consideration needs to be in respect of the flight, not the general business relationship of which the flight is an incidental element.

I am frankly surprised that the helicopter man pleaded guilty. It doesn't seem on the information given that valuable consideration was "given or promised in respect of the flight" by the celebrity. The 'benefit' derived from flying a celebrity about was not "given or promised" by anyone; furthermore it would be interesting to know whether the CAA attempted to quantify the consideration, i.e. was it more than nominal. The whole essence of what the ANO seems to be aimed at is the 'agreement' i.e. a contractual relationship. If I offer out of the goodness of my heart to drive you to london there is not contract, as you have not promised anything, e.g. payment in return. If you happen to be a celebrity and I obtain some personal cudos by being seen to drop you off at the Ritz there is still no contract/agreement. The position is exactly the same if car becomes helicopter or aeroplane. Any benefit I may get is not as a result of a contract with you since there is no contract:ok:

However, don't rely on the wording on an insurance policy, which is no guarantee that in any particular class of business use a flight is private. If I fly my client to a meeting in relation to a transaction for which I ultimately charge him then I suspect that is aerial work, even if I do not specifically charge him for my time in the air at the controls.

What a minefield:{

bookworm

27th Apr 2004, 14:43

This is a bit more likely scenario. I fly to a business meeting in an aircraft in which I hold a share. I am reimbursed the cost of the flight £60 per hour plus two landing fees by my company. I charge the client travel of 4 hours (2 there and two back) at £x per hour. Is that lawful?

It's an interesting one. I would argue that, provided there is no contract requiring you to fly, then:

a) it is lawful for your employer to pay you the direct costs of your flight

b) it is lawful for the client to pay you the direct costs of your flight on behalf of your employer

c) the situation you describe differs from a and b only in the path the money takes -- it would be unreasonable to interpret a payment from client to company to pilot any other way.

Valuable consideration is certainly capable of broad interpretation, but there must be rational limits. If I make a private flight with a friend from A to B to see other friends or family, both I and the passenger obtain a benefit from the flight -- at least the opportunity cost of using another mode of transport. Yet this is the epitomy of a private flight. The test, surely, is whether a thing of value has been exchanged (or a debt written off) in lieu of a payment.

The helicopter + celeb one is an interesting one too. If you start from the default position that the helicopter pilot would have sought to charge the celeb for the ride, and that this charged was waived in return for some sort of publicity, then I can see the case. But presumably the helicopter pilot was not in the habit of providing such air taxi services, so it would be very difficult to prove that there was anything to waive.

IO540

27th Apr 2004, 15:11

bookworm

What about the case where an employee of a company freely chooses to fly somewhere, and the company provides a plane to the employee free of charge?

That is the most common mode in reality, where a plane is used to fly "on business". The employee doesn't pay anything then. If the plane is rented in, the employer is reimbursing the direct costs but the money doesn't pass via the employee.

The heli+celeb scenario probably included some facts not reported in the press... but certainly the CAA gets very active when it comes to anything that looks like getting around the need for an AOC. They prosecute flying schools that drop somebody off at a location different from the departure location.

Justiciar

27th Apr 2004, 15:42

it is lawful for the client to pay you the direct costs of your flight on behalf of your employer

I don't think that's right as "valuable consideration" does not have to pass from the client or customer to me, the pilot. All that has to happen for the flight to be aerial work is for the consideration to be "given or promised". This corresponds with contract law, where A can contract with B for a consideration which passes from B to C rather than to A.

Evo

27th Apr 2004, 15:56

This all looks like a case for the "reasonable man" of common law fame :)

The man on the Clapham omnibus would undoubtedly consider the private flight perfectly reasonable, even if you could argue about valuable consideration. He would also, I believe, consider that the flying school owner gave a free ride to the celebrity in the expectation of free publicity as he would not reasonably be expected to offer free transport to a member of the general public. That case does appear less clear-cut, however, although with the English legal system being what it is pleading guilty to avoid losing in court is sadly understandable.

Rather than argue about what valuable consideration does and doesn't mean (which is fun if you would like to be a lawyer, probably fairly irritating if you actually are a lawyer, and terribly dull for everybody else), isn't it better to just keep to reasonable behaviour without trying to push it? You may be able to argue that other behaviour is allowed, and a judge may even agree, but isn't it better to stick to what is clearly allowed, rather than arguing about what the ANO might mean? The same could be said for this endless IMC minima debate... :)

FNG

27th Apr 2004, 16:18

Paul, when you wrote, near the beginning of the thread:

"any gen on percentage sharing or advertising criteria - in writing - as mentioned by BEagle gratefully received",

I took that as an enquiry about advertising, but I'm glad to hear that it was something else. Flying with friends rarely needs the services of the Saatchi brothers. As you say, nothing cheesy about friends going flying and chipping in, but in my view it's somewhat cheesy to ask for or to expect payment (I am not suggesting that you do either). Renting out a public C of A aircraft is completely different.

Incidentally, are many people unfamiliar with the sharing of costs amongst four people rule? I vaguely recall that it was covered in the Thom Air Law Book and the Confuser, and sometimes featured as an exam question.

TonyR

27th Apr 2004, 17:07

We would all like to fly when someone else is paying and most people do not want to bother with a CPL, but thats life for the PPL, You want to fly You must pay ,I think is it very simple to understand and I am not a lawyer,

I and my friends go to Europe a fair bit from Belfast, usually 4 up in the TB20, if we fly EGAA - LFRD - LFMP - EGJJ - EGAA, that is about 11 hours in the TB. All 4 pilots will fly a sector and all will have a different flight time but we divide the total cost by 4 and that is legal.

I have flown "for free" at both gliding & para dropping clubs, with the belssing of the CAA, but I think you will find that when it comes to transporting yourself and friends around the CAA will want you to pay your share of the flight.

Tony

PAUL101

27th Apr 2004, 17:48

FNG -thanks for your last missive - I agree.

Thanks to all who have contributed, I certainly have learnt alot in the last few days.

Best regards and safe flying,

Paul101

IO540

27th Apr 2004, 19:05

What Direct Costs means is interesting.

In the latest ANO, available as CAP393.PDF, Article 129 states

‘Direct costs’ means, in respect of a flight, the costs actually and necessarily incurred in connection with that flight without a view to profit but excluding any remuneration payable to the pilot for his services as such;

In a CAA document entitled Summary of Public Transport (intended to explain some bits of the ANO; I have a copy but I am sure it is at caa.co.uk somewhere) it says

Direct costs are those incurred directly in relation to a flight (e.g. fuel)

However there is no doubt that the direct costs of a flight are
(1) Fuel
(2) Cost of 50hr check divided by 50
(3) Cost of 150hr check divided by 150
(4) Cost of engine overhaul divided by the full engine TBO
(5) Cost of prop overhaul divided by the full prop TBO
and a few other things like that; all of these relate directly and inescapably to airborne time. Yet the CAA doesn’t like anything other than fuel, it appears. I wrote to them for clarification but they never answered, instead sending me the above summary document.

The meaning of “direct costs” is relevant to the case where an individual X owns a plane Y PRIVATELY and does a business flight. The business probably cannot reimburse him for more than the “direct cost”.

But there is a way around this. The key is to make sure the direct cost to the pilot is the entire cost of the flight.

The obvious way to achieve this is to rent the plane in from somewhere; the direct cost is then the full cost of the rental and you can get that back from the business without contravening any rules.

Similarly, it can be done if X has two companies:

C1 - owns the plane
C2 – X’s main business

If X flies privately, C1 invoices X (and X can then do the normal sort of PPL cost sharing if he wants)

If X flies on business of C2, C1 invoices C2.

If somebody else (Y) rents the plane, C1 invoices Y

The above is standard practice, and differs from renting a plane in from a flying school only in that X is involved in both companies.

The remaining option

If X flies on business of C1, C1 invoices C1 i.e. nobody invoices anybody

is interesting but I can’t see why it should not be allowed. Views?

There are advantages in owning the plane in a company separate from X's main livelihood, especially if the plane is being rented out.

FNG

27th Apr 2004, 21:09

Attentive readers of this exciting, nay, thrilling thread will have noticed that the CAA's summary was linked to very early in the thread by, er, me. Someone else provided a link to Article 130 of the ANO, which is the Ur-text. Attentive readers of (a) the Summary and (b) the ANO, will have noticed that it also includes a definition of "annual costs", which include maintenance, and so forth.

IO540, it sometimes seems that, whenever you can, on assorted threads, you denounce CAA advisory documents as misleading, and slag off well-meaning instructors for being ignorant. How the CAA must love receiving your daily "...and here's another thing!" letters.

Given the Biblical Authority with which you pronouce your opinions [there is "no doubt", you say, that direct costs include 50 hr checks (ie maintenance, ie annual costs, ie the costs excluded from direct costs, derr...)], I assume that you are a Law Lord (I know that at least one of the Law Lords has a PPL, but I thought that he'd been a bit busy in Ulster just lately). I also assume, naturally, that you read the definition of annual costs before you made your last posting here.

IO540

27th Apr 2004, 21:27

FNG

You are taking the **** but I will reply, this time.

From Article 129 of the ANO (Definitions):

‘Annual costs’ in relation to the operation of an aircraft means the best estimate reasonably practicable at the time of a particular flight in respect of the year commencing on the first day of January preceding the date of the flight, of the costs of keeping and maintaining and the indirect costs of operating the aircraft, such costs in either case excluding direct costs and being those actually and necessarily incurred without a view to profit;

‘Direct costs’ means, in respect of a flight, the costs actually and necessarily incurred in connection with that flight without a view to profit but excluding any remuneration payable to the pilot for his services as such;

I can't see that the above separates maintenance costs based on airborne time from maintenance costs based on the calendar. Have you actually ever owned and maintained a plane yourself? If so, you must know about this.

And exactly which part of Article 130 do you think is relevant, and exactly to what?

bookworm

27th Apr 2004, 21:35

I don't think that's right as "valuable consideration" does not have to pass from the client or customer to me, the pilot. All that has to happen for the flight to be aerial work is for the consideration to be "given or promised". This corresponds with contract law, where A can contract with B for a consideration which passes from B to C rather than to A.

Not sure I follow. The cases I labelled a and b appear to be specifically permitted by the ANO [130(9)].

Flying Lawyer

27th Apr 2004, 21:40

FNG
What does ‘cheesy’ mean? I assume from the context it’s pejorative. Cheeky? Mean? Bad form? Poor show, old chap?
Assuming it means something along those lines, why is it “somewhat cheesy” for a PPL to ask for, or to expect, a contribution towards the cost of the flight? I agree it would be if a contribution was first mentioned after the flight but, if they agree in advance and are happy with the arrangement?
It’s one of those areas where the law eventually (possibly mid-80s ?) caught up with what was known to be a harmless and widespread practice. The prohibition was largely ignored, and very sensibly not enforced by the CAA, where a PPL and friends simply shared the cost of a flight. The CAA recognised that the practice was harmless and cost-sharing became legal provided the pilot complied with certain specified conditions.
It’s commendable that you don’t accept more than a beer from anyone who flies with you, but you are also fortunate to be a high earner. (I don’t know what you earn, but I know what you do so I’m reasonably confident in my assertion. ;)) You say a PPL is for having fun with ‘whilst gaily spending vast amounts of cash’, but many PPLs don’t have high incomes and don’t have vast amounts of cash to spend.
Many PPLs couldn’t afford to fly, or fly as often, if they didn’t cost share. Cost-sharing isn’t a means of making money, but of subsiding the high cost of flying. If everyone’s happy with the arrangement, what’s the problem? Friends may not ‘share the hobby’ but, if they are happy to share the cost in return for the experience, why do you disapprove? Flying is very expensive in this country. Surely you wouldn’t wish to see it restricted to the wealthy?

Advertising
Paul 101 asked for further details of the ‘no advertising’ rule in light of Beagle’s mention of restrictions on advertising cost sharing. When the law was changed, the CAA recognised that PPLs might wish to advertise within their club that they are planning a flight, accepted that was harmless and whilst, for obvious reasons, there is a general prohibition on public advertising of cost-sharing flights, an exception was made for members of the same club.

Are many people unfamiliar with the sharing of costs amongst four people rule?
The question crops up on Pprune fairly regularly so I assume quite a few people are. You’re probably right that it’s covered in text books and PPL examinations, but I’m not entirely confident I could pass even the Air Law paper without some revision. (I’m totally confident I’d fail some of the others!)
We are used to understanding and remembering legal provisions. Don’t be too harsh on people who don’t have our skills, but have other skills we don’t have. IMHO and experience, most PPLs are merely concerned not to break the law and risk getting into trouble, rather than trying to find a dubious ‘fiddle’ to get around the law.

FNG

27th Apr 2004, 21:45

10540, in your example of someone flying their own aircraft, the distinction between direct costs (fuel, oil, landing fees) and annual costs (maintenance, hangarage, insurance) becomes meaningful, as the only costs that may be shared are the direct ones. In that case,to assert that there is "no doubt" that the direct costs include maintenance is, well, confident.

I have never maintained an aeroplane, as I'm not a mechanic. I have owned an aeroplane, and paid people to fix it. Really, what's the point of all this wearisome discussion? The CAA does not mind when business people do a bit of flying to meetings, and does not mind when four blokes share the cost of spending a boozy evening in France. It does mind when people contrive elaborate dodges and wheezes, and so it should. You are evidently not short of cash, as you frequently remind us that you fly the finest and best equipped aeroplane in the world (on instruments, too!), so why do you care two hoots about any of this? We both have PPLs. We use them for different things, but we can afford them, and aren't they such fun?

Edit: Flying Lawyer, I have absolutely no objection to cost sharing amongst friends, on a friendly and voluntary basis (which, as you point out is sensibly recognised as valid by the CAA), but I detect the whiff of cheese if someone invites their friends to fly only on condition of contribution. Your view of human nature is perhaps more generous than my own, and, if so, this is commendable in a lawyer, as we see so much of the rotten side of life, but I can't help noticing how often the questions of this nature posed on this forum (not the current question) appear to be directed towards finding ways around the fact that a PPL is not a licence to earn money for flying. They are often posted by wannabe airline pilots looking for subsidised hour building. I don't suppose that your asked your friends to subsidise you in the precarious route to a practice at the Bar, and no more did I.

I would not like flying to be restricted to the wealthy, and some of the most enjoyable flying is the cheap-as-chips PFA variety (practised by, amongst others, several merchant bankers of my acquaintance), but one thing on which I agree with IO540's general stance on this forum is that there's no point in doing it if you really, truly can't afford it, and needing other people to pay for it is a pretty good indication that you can't afford it.

TonyR

27th Apr 2004, 21:52

Why do you all have to make it so complicated:

If you are a PPL you must pay at least your share of the flight, there are a couple of exceptions which don't apply to most PPLs, ie. Glider tug and Para drop "clubs"etc.

As FL states most pilots just want to keep out of trouble with the CAA, so instead of some of you looking for the loopholes, just find people to fly with and keep it legal.

Tony

IO540

27th Apr 2004, 22:34

Direct costs of an aircraft being in the air most certainly do include the hourly-based maintenance (as anyone who owns a Transport CofA plane for more than 50 hours discovers) but I don't think the CAA see it that way, based on their other publications.

I doubt it's ever been tested. PPLs doing straight cost sharing aren't likely to get checked, and people flying on their own business don't need to worry about the definition because there is a way to get the lot back.

There's some interesting stuff for business flyers in Article 130, very convoluted though.

TonyR

I don't think anybody here is looking for loopholes. Just trying to stay legal and insured, in common PPL type usage situations.

Bronx

27th Apr 2004, 22:45

FNG
I'm kinda cynical myself. I see you quick on the draw to see the worst in pilots and just as quick to say how reasonable your CAA is about things. Flying Lawyer says he knows you so that shot down my hunch you might be a CAA man but I'm still kinda skeptical about your pro CAA stand that must make the CAA guys who read your posts happy bunnies. Now why would you want that. Maybe we're too cynical at times.

Fuji Abound

27th Apr 2004, 22:48

TonyR - whilst I agree, I think this debate has highlighted one important exception.

I suspect there are a reasonable number of pilots who use their aircraft for business. After all it is a very efficient means of getting from A to B.

Moreover it seems to me not unreasonable for the client to pay the cost of travel.

It seems to me that the cost might arise in two ways. In an employee employer relationship the employee seeks reimbursement from his employer, who in turn recovers the cost as a disbursement from his client. In a proprietor client relationship the proprietor is effectively recovering the cost directly from his client. Whatever the relationship, the pilot is seeking to recover the cost of getting himself to his client.

The other situation that seems to me likely to arise is that in which the pilot is providing transport for his client. For example he and his client together wish to attend a business meeting and the mode of transport of convenience is a light aircraft.

Setting aside for a moment the law in all these scenarios were the transport provided by car we would be happy to pass on the cost to our client.

As FL says we all want to operate within the law but equally I do not see any of these scenarios constituting "looking for loopholes". I have therefore found this debate very interesting in terms of helping to define where the boundaries might be in the scenarios I have outlined.

Justiciar

27th Apr 2004, 22:55

Not sure I follow. The cases I labelled a and b appear to be specifically permitted by the ANO [130(9)].

bookworm: I think (a) is OK but (b) in your post is not. The reason is that the client paying either you direct or your employer indirectly is valuable consideration for the flight. The position might be different if the client was in the aircraft and paying his share of the direct costs of the flight. Paying you to visit him or similar is quite different.

FNG

28th Apr 2004, 05:24

Maybe if I worked for the CAA I wouldn't have to get up so early, but I don't work for them*, and don't think that everything that they do is reasonable and beyond criticism. The approach to public transport and aerial work indicated in their published Summary does, however, seem to me to be a sensible one, capable of being readily understood.

IO, I agree that the costs, in real terms, of flying for an hour include maintenance, and any group or renter prices each hour to reflect this, but "direct costs" for ANO purposes has the specific meaning to which you have alluded, and this excludes maintenance. I'm not sure that the present definition is a particularly good one, but we are stuck with it for the time being.

(*as a lawyer in private practice working to the cab rank rule, I have, over the years, done cases both for and against the CAA, but I am neither retained nor employed by them)

bookworm

28th Apr 2004, 06:40

bookworm: I think (a) is OK but (b) in your post is not. The reason is that the client paying either you direct or your employer indirectly is valuable consideration for the flight.

What do you think the purpose of the "by or on behalf of the employer" phrasing is intended for if not that?

IO540

28th Apr 2004, 07:21

I think that Article 130 9 in

(9) (a) Subject to paragraph (b), a flight shall be deemed to be a private flight if the only valuable consideration given or promised in respect of the flight or the purpose of the flight other than:
(i) valuable consideration specified at paragraph (2)(c); or
(ii) in the case of an aircraft owned in accordance with paragraph (10)(a),
valuable consideration which falls within paragraph (10)(b);
is the payment of the whole or part of the direct costs otherwise payable by the pilot in command by or on behalf of the employer of the pilot in command, or by or on behalf of a body corporate of which the pilot in command is a director, provided that neither the pilot in command nor any other person who is carried is legally obliged, whether under a contract or otherwise, to be carried.
(b) If valuable consideration specified at paragraph (2)(c) is given or promised the provisions of that paragraph shall apply to the flight.

is intended to limit business flying to peoples' own business. To fly in connection with an unrelated business would permit the carriage of unrelated people and freight and the CAA wants to keep a lid on that even if no money changes hands - that's AOC territory and payment often cannot be proven especially if made after the flight.

I don't think there is a need to look for particular logic in this. It's in the same category as the min 5% shareholding in a group owned Private CofA plane. The plane isn't any less safe if a shareholder has only 4% or 0.1%. The CAA make a concession on maintenance, and this is a way to limit how many planes take advantage of it.

I also don't think that Fuji's concern is a problem because with absolutely every business flight there is money or potential money to be made, partly or wholly as a result of the travelling, so if this was a problem the CAA would have to put a blanket ban on all travel connected with a business. Just like car insurers do if you buy a private use only policy.

Article 130 5 is also interesting

(5) (a) For the purposes of paragraph (2)(a), there shall be disregarded any valuable consideration given or promised in respect of a flight or the purpose of a flight by one company to another company which is:
(i) its holding company;
(ii) its subsidiary; or
(iii) another subsidiary of the same holding company.

This appears to make it a private flight if the payment is made between thus related companies. But the pilot still has to be an employee/director of one of them. In practice, in the scenario I described earlier (and which FNG got so wound up about for some reason), the ltd company owning the plane would be a subsidiary of the pilot's main business, and in any case he would be a Director of both of them. Exactly what is wanted here.

I get the feeling that the people I have spoken to years ago about how to do this have actually read through some of this stuff, or paid someone to do it :O

Justiciar

28th Apr 2004, 08:52

What do you think the purpose of the "by or on behalf of the employer" phrasing is intended for if not that

I think that could include where payment is made, for example, by an agent on behalf of the employer. I do not think it is wide enough to cover a situation where a third party agrees to pay the cost to the employer, as that is caught by the concluding words of 130(9)(a): "provided that neither the pilot in command nor any other person who is carried is legally obliged, whether under a contract or otherwise, to be carried.

So, if A (client or customer) pays C (employer) so that B (pilot) makes the flight that is valuable consideration and caught both by 130(1)(a) and 130(9), as there would be an agreement, i.e. a contract, in place. Whether the pilot is re-imbursed any costs of the flight he has paid by C is irrelevent in this scenario as it is the valuable consideration paid by A which takes it out of the private flight category.

IO540

28th Apr 2004, 10:04

Justiciar

if A (client or customer) pays C (employer) so that B (pilot) makes the flight

As you have put it, I totally agree. The key, IMV, is that the pilot must not be obliged to fly.

However I think it would be pretty unusual if one of my customers actually specified that I FLY to see him :O

One situation which I didn't get into was when a customer once asked whether I could take his son up for a flight. Before FNG gets all worked up about this :O , such a variation isn't that uncommon, and CAA's view would be the last of my concerns; it would be the insurance. In the end it didn't happen because the customer felt he would fall foul of his company's rules on gifts :yuk:

Bronx

28th Apr 2004, 13:24

Aaaah! Always a nice warm feeling to hit the target!
Good luck with getting to prosecute pilots for your CAA, FNG. ;)

Some of this discussion goes right over my head. Wouldn't it be a lot easier of the law said No Payment or No Remuneration like itt says in the CAA's own paper.
How the hell are ordinary pilots meant to know what 'valuable consideration' means? Even folks here who know what it means can't agree if a scenario is or isn't valuable consideration. An ordinary pilot has no chance and could easily get into trouble if someone decided to make trouble for him by reporting him to the CAA. I bet the guy who gave his helo for nothing for a local cause was dobbed in it by some jealous wellwisher. :rolleyes:

Justiciar

28th Apr 2004, 16:03

I bet the guy who gave his helo for nothing for a local cause was dobbed in it by some jealous wellwisher

I'm sure thats absolutely right. Lets face it, most minor transgressions never come to light until something goes seriously wrong, at which point the CAA etc crawl over you, your licence and your aircraft. How may people pilots have made an ILS approach with non-FM immune equipment; flown without a chart or that second pair of glasses that their medical requires? Its a bit like having no MOT on your car - most people only get caught out when stopped for something else!

Bronx: Laws can never be made that simple - I've spent 20 odd years trying and sometimes succeeding in getting a favourable interpretation of some statute or regulation for a client.

The helicopter was very unfortunate and who knows whether he was correctly advised by his lawyer. The main point in my view about this is that there has to be an agreement which suggests something formal and of legal force, with something of value passing the other way. A mere expectation that someone might get publicity or someone's business in the future does not seem to be enough.

I think this has been talked almost to death;)