RENUMERATION
 

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

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.

Justiciar

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.

RENUMERATION
 

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

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:{

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.

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.

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.

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... :)

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.

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

RENUMERATION
 

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

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.

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.

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?

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

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.

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.

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

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.