Using a Friend’s Aircraft: What is Allowable under FAA Regulations

Group of businesspeople walking to corporate jet

In today’s private aviation market where charter availability is becoming more scarce, pre-owned inventory is at a historic low, and fractional and card programs have slowed down their sales; I am getting an increased number of questions related to how someone can legally share in the use of their friend’s aircraft. The first piece of information to understand when answering this question is if the aircraft is on a FAR Part 135 charter operating certificate. If the aircraft is on a FAR Part 135 charter certificate, then it is easy to charter your friend’s aircraft through the charter company. If the aircraft is not on a charter certificate and is only eligible to be flown under FAR Part 91, then the use of the aircraft is limited. Since most charter aircraft today are very busy with charter, we will assume that the friend’s aircraft is not on a Part 135 charter certificate for the purpose of this article.

If your friend wants to allow you to use the aircraft as an invited guest, even if the friend is not on the aircraft, this is permissive if no compensation is being paid for the flight. However, if there is any type of compensation for the flight, then it is not allowed under the regulations unless one of the exceptions detailed below. These exceptions include a dry lease, time share or interchange.

Before I describe each of these exceptions in more detail, it is important to understand two critical points. First, compensation does not only mean cash but also means things like an exchange of services, use of boat or house, or an expensive present like a watch given in consideration for the use of the aircraft. Second, if the arrangement you make to use your friend’s aircraft under Part 91 is not allowed under FAA regulations, then an illegal charter flight has occurred. The number of enforcement cases for illegal charter flights has grown significantly in recent years and continues to be a top enforcement priority for the FAA.

The most common way to use a friends aircraft is under a written dry lease agreement. A dry lease means your friend is providing (leasing) the aircraft to you without crew. It is then up to the user/lessee to hire and pay for the crew for the flight. Also, and, most significantly, under a dry lease, the user/lessee is in operational control of the aircraft and needs to understand what that means from a regulatory and liability standpoint.

A time share arrangement, which is allowed under 14 CFR § 91.501(b)(6), can be put in place to allow a friend to use your aircraft and your crew. Specifically, under FAR 91.501(c)), a time share agreement “means an arrangement whereby a person leases his airplane with flight crew to another person, and no charge is made for the flights conducted under that arrangement other than those specified.” In this case, the friend can receive payments for the specific items as defined in 14 CFR § 91.501(d), which is two times the cost of the fuel plus some other specific expenses. It does not, however, allow the friend to capture reimbursement for the capital expenses involved in owning/operating an aircraft.

Another option under FAR Part 91.501(b)(6), is an interchange agreement. The interchange agreement as defined by FAR Par 91.501(c) is “an arrangement whereby a person leases his airplane to another person in exchange for equal time, when needed, on the other person’s airplane, and no charge, assessment, or fee is made, except that a charge may be made not to exceed the difference between the cost of owning, operating, and maintaining the two airplanes.”  If both you and your friend have an aircraft and you want to share the aircraft when one or the other aircraft is down for repairs or otherwise unavailable this is allowable as long as there is a written interchange agreement in place. If the aircraft are two different types, there can be an exchange rate included in the agreement. However, there cannot be a true up if the hours utilization is not balanced.

Whether a dry lease, time share or interchange agreement is selected, the agreement must be in writing, kept on the aircraft when in use, and if truth-in-leasing requirements are applicable, then certain language regarding operational control must be included. Additionally, the agreement must be filed with the FAA for truth-in-leasing purposes and at least 48 hours before the first flight. Finally, notice of the first flight must be provided to the local flight standard district office.  Additional considerations include any applicable tax that may be due and the number of agreements in place with regard to an aircraft.  Specifically, if there are a number of agreements (dry lease, time share and/or interchange) for the same aircraft, this could be interpreted by the FAA that the aircraft owner is using such agreements as a sham and is actually conducting an illegal charter operation.

In general, while it is far simpler to find an aircraft on a Part 135 certificate or a generous friend who is not worried about being paid for the use of the aircraft, this might not be possible. An aviation attorney well versed in FAA regulations should be consulted before there are any payments made for flights under the FAR Part 91 exceptions outlined here. A good alternative to the above scenarios may be to purchase an ownership interest in the aircraft. We will discuss this option in an upcoming article.