Commercial and Private Operations

Whether a flight is private or commercial decides almost everything about it: the licence the pilot needs, the certificate the operator must hold, the operating rules, the fuel and weather minima, the maintenance standard and the insurance. The line is not drawn by the size of the aircraft, nor simply by whether the pilot is paid. It is drawn by what is being sold and to whom.

Commercial air transport is the carriage of passengers, cargo or mail for remuneration or other valuable consideration, and it may be done only under an air operator certificate. Paid flying that carries nothing from place to place, such as aerial photography or instruction, is commercial but not air transport. Private flying, including flights on which the occupants legitimately share the costs, sits on the other side. Pilots get into trouble at the edges: the friend who insists on paying, the charity flight, the "shared" trip advertised to strangers.

Commercial air transport defined

ICAO divides operations into three families in Annex 6: commercial air transport operations, aerial work and general aviation (GA), defined as any operation other than the first two. Part I of Annex 6 covers aeroplanes in international commercial air transport and Part II aeroplanes in international general aviation. The same split appears in item 8 of the ICAO flight plan, where the type of flight is S for a scheduled air service, N for non-scheduled air transport, G for general aviation, M for military and X for other.

EASA's definition of commercial air transport follows ICAO: the operation of an aircraft to transport passengers, cargo or mail for remuneration or other valuable consideration. Neither a timetable nor the size of the aircraft is part of the test. More broadly, EU law treats an operation as commercial when it is performed for remuneration and is either made available to the public or flown under contract for a customer who has no control over the operator. The EU Air Operations Regulation then sorts every flight into one of four regimes:

A company that flies its own employees in its own business jet, selling no seats, is not in commercial air transport: it operates under Part-NCC, and its pilots may be salaried. The same aircraft flown for a paying charter customer is CAT.

Common vs private carriage

The FAA approaches the question through the older legal concepts of carriage. Common carriage, as AC 120-12A explains, has four elements: holding out to the public, to transport persons or property, from place to place, for compensation. Common carriage requires an air carrier certificate under Part 119, with operations under Part 121 or Part 135.

Private carriage is transport for one or a few selected customers, usually under individual contracts, without any offer to the public. It is not common carriage, but if it is done for compensation or hire it still needs an operating certificate unless an exception applies. The general rule, often at issue in illegal charter cases (see FAA regulations and enforcement), is that a person who provides both the aircraft and the pilot to someone for payment is operating an air transportation service. A commercial pilot who rents an aeroplane and offers to fly a customer between two cities for a fee needs a Part 135 certificate, whatever the pilot's licence allows.

What the pilot's certificate allows is a separate matter. An FAA commercial pilot may be paid to fly, for a certificate holder or for a Part 91 operator, but the certificate does not make the pilot an air carrier. A company that flies its own employees and goods in its own aeroplane, when the transport is incidental to its business, operates under Part 91 and may hire a commercial pilot to do it.

Holding out

Holding out is the act that turns private carriage into common carriage: advertising or otherwise showing a willingness to carry anyone who wants to be transported. It may be done by advertisements, through a booking agent, on a website or simply by a reputation for taking all comers. The number of flights actually made does not matter; the offer to the public does. For this reason a private pilot who advertises seats on flights to the public, even with the intention of sharing costs, risks being treated as offering common carriage.

Compensation or hire

Compensation or hire is any payment or benefit received for the flight. It need not be money, and it need not be paid to the pilot: a payment to the aircraft's owner or operator for the flight makes it a flight for hire just as much. Under both systems the licence decides who may be paid:

• An EASA PPL(A) holder (see student, private and recreational pilot licences) may act as pilot-in-command only without remuneration, in non-commercial operations (FCL.205.A).
• An EASA CPL(A) holder may act as pilot-in-command or co-pilot of any aeroplane in operations other than commercial air transport, as pilot-in-command in commercial air transport of single-pilot aeroplanes, and as co-pilot in commercial air transport (FCL.305). Command of a multi-pilot aeroplane in CAT needs an ATPL (see commercial and airline transport pilot licences).
• An FAA private pilot may not act as pilot in command for compensation or hire, or carry passengers or property for compensation or hire, except as 61.113 allows, for example a flight only incidental to the pilot's business or employment carrying no passengers or property for hire, pro rata cost sharing, some charitable and search flights, and demonstration flights by an aircraft salesperson with at least 200 hours.

Cost-sharing flights

Cost sharing is the usual way passengers may contribute to a private flight, and the rules are strict on both sides of the Atlantic.

Under EU rules, a cost-shared flight by private individuals is outside commercial operations when the direct costs, such as fuel, airport charges and aircraft rental, are shared by all the occupants of the aircraft, pilot included, and no more than six persons share them. No one may make a profit. If the pilot contributes nothing, the free flight is itself remuneration.

Under FAA rules, private pilot cost sharing is governed by 61.113(c): the pilot may not pay less than the pro rata share of the operating expenses of the flight with the passengers, and the expenses shared may involve only fuel, oil, airport expenditures or rental fees. Pro rata cost sharing means dividing by all the people on board, pilot included.

General aviation and aerial work

Much paid flying carries no passengers or cargo. ICAO calls it aerial work: specialised services such as agriculture, construction, photography, surveying, observation and patrol, search and rescue and aerial advertisement. Older European rules defined it as flying, other than public transport, for the purpose of paid work. EASA now calls these activities specialised operations under Part-SPO. A commercial specialised operation such as remunerated aerial photography needs a declaration to the competent authority; only listed high-risk commercial activities need a specific authorisation.

In the United States, 119.1(e) lists operations that need no air carrier or operating certificate even though they are flown for compensation, among them student instruction, ferry and training flights, crop dusting, banner towing, aerial photography and surveying, firefighting and certain parachute operations. They are flown under Part 91, or Part 137 for agricultural work; a pilot paid to fly them needs at least a commercial certificate, and some also need a waiver: banner towing, for example, requires a certificate of waiver under 91.311. Remunerated flight instruction is commercial in both systems but is not commercial air transport.

Commercial air tours

A commercial air tour is a flight carrying passengers for sightseeing. Under FAA rules a sightseeing flight is normally a Part 135 or Part 121 operation, but 91.147 creates an exception for nonstop commercial air tours that begin and end at the same airport and stay within 25 statute miles of it. An operator without a certificate may fly these under Part 91 if it holds a letter of authorization under 91.147, complies with the safety rules of Part 136, Subpart A, and runs an FAA drug and alcohol testing programme.

In the EU a paid sightseeing flight offered by an operator in an aeroplane or helicopter carries passengers for remuneration and is commercial air transport under an AOC. The main exception is the introductory flight, which a flying club or training organisation may offer under the non-commercial rules within limits set by the Air Operations Regulation. For flights that stay local the CAT rules contain alleviations; for example, an operational flight plan is not required for VFR flights in other-than-complex aeroplanes that take off and land at the same aerodrome or operating site.

Fractional ownership

In a fractional ownership programme, several owners each buy a share of an aircraft, and a program manager provides the aircraft management, pilots and scheduling, so that an owner can call up a program aircraft much as a charter customer would. Because the owners are flying their own aircraft, the flights are private operations under Part 91, and the FAA wrote Part 91 Subpart K (Fractional Ownership Operations) to add requirements suited to the arrangement. Subpart K sets requirements for program management, operational control, flight crew training and flight, duty and rest well beyond those of ordinary Part 91 flying. Time as pilot in command in certain Subpart K operations (91.1053(a)(2)(i)) counts toward the 1,000 hours of air carrier experience a Part 121 captain needs under 121.436.

Library articles are written for study and exam preparation. They do not replace your aircraft's approved documentation, your operator's procedures or the regulations themselves.