In what way are they illegal?

Mike C.

This came up in another thread so instead of hijacking it, I moved it here.

I have witnessed many dry leases that are actually illegal because the owner of the aircraft continued to maintain operation control of the aircraft, often with his preferred pilot providing flight services to the lessee.

I’m not saying the owner’s preferred pilot can’t do the flight, just that he better be contacted, scheduled and paid directly by the lessee. (Operational control)

In my tenure in the industry, I believe that this is more often than not the case. While in the real world it is the “norm” mostly due to due to insurance issues and convenience, that is not the way the FAA defined a dry lease and expects it to work.

Brad

I knew a guy that had a Saratoga that he owned, and had a ton of dry leases on it. It was a full blown 134.5, and no one cared.

That is an interesting point, as long as you’re not messing with a 135 operator on the same field, it doesn’t seem to be an issue the FAA pursues. It’s when you start to “compete” with a guy who is jumping through 135 hoops that you are likely to have a visitor.

Part of the reason I started this thread is to educate people who are doing it wrong, it’s not that hard to do it right. You just have to follow some basic guidelines.

That is an interesting point, as long as you’re not messing with a 135 operator on the same field, it doesn’t seem to be an issue the FAA pursues. It’s when you start to “compete” with a guy who is jumping through 135 hoops that you are likely to have a visitor.

Part of the reason I started this thread is to educate people who are doing it wrong, it’s not that hard to do it right. You just have to follow some basic guidelines.

I’d guess the majority are not illegal. I’d say that in part because I’ve seen some proper arrangements in the Part 91 world, but also in part of the fact that many if not most Part 121 and 135 aircraft are dry leased.

(I’m leaving out that most rental aircraft seem to be subject to two dry leasing arrangements. The leaseback with the owner and the rental agreement with the renter.)

That is the majority of the cases I see, so I don't run in circles where things are mostly illegal like you seem to.

If I were to offer a dry lease, the user would pay by the flight hour some fee and they would have to find their own pilot and get them listed on the insurance. That makes it all legal and covered.

I don't do this because I don't need to and I don't want to void my LUMP inspection program with too many hours (which basically would negate the lease benefits to me). There are also risks to the plane I'd rather not take, like a bad pilot causing engine damage.

Technically, I am already in a lease. Ciholas Aviation LLC (owner) leases the plane to Ciholas, Inc (operator), and Ciholas Inc provides the pilot (me, or I can hire someone). This was for sales tax dodge. If I was doing it over again, I'd probably not set it up like that as the benefits don't really outweigh the effort, and it causes annoying overhead to maintain. If I keep the plane for long enough, I'll actually spend more under the lease in sales taxes than if I had paid the sales tax up front.

Mike C.

In some places, an enterprising pilot may have found several aircraft owners who are willing to dry lease, and also a network of higher net worth individuals who like to fly private without large commitments.

Scheduling is done through the pilot, who then finds an available aircraft for them and flies them to their destination. All done under Part 91 dry leases.

Plane owners are happy. Passengers are happy. Pilot is happy. Who knows if the FAA would be happy. It looks like a 135 operation in some ways but is not. It's not really even an operation - just a series of individual dry lease transactions, all on the various planes' separate insurance policies, that can result in something like the same plane flying 5 trips in a weekend with different passengers on board using the same pilots.

The rules are vague so that enforcement can be arbitrary. Tread carefully.

Ciholas, if that ain't tossin a Turd at Chip....No not a Tomato, like this
Your better than that

This is my playground if anyone wishes to have a conversation of-line.

That said, the FAA is VERY active in ferreting out 134.5s.

The fines can be breathtaking.

As others have said, tread carefully.

...

At the risk of poking a bees nest, I will submit this ....

135 v. 91 has nothing to do with "air safety."

I humbly submit that it is an economic regulation - protecting large 135s and 121s.

To be sure, I can load up a Pilatus with anyone I want as long as the checkbook does not come out.

Once it does, it's all about "air safety,"

Without getting long and tedious, I did a deep dive on this in a case.

At the University of Miami there is a fascinating collection of materials from TWA/PanAm.

Those materials contain the lobbying efforts and Howard Hughes and Juan Tripp as their nascent airlines were just getting started.

Congressional testimony was VERY interesting.

Suffice it to say, both men did not want you and me flying folks around "for compensation or hire" for fear it would deprive their aircraft of butts for seats.

This is back in the days of the CAB which as you know became our overlord the FAA.

Put simply, the package may have been wrapped in "air safety," but in the box was anti-competition.

If only it was that easy.

The FAA has taken a very expansive view of what is "compensation", even so far as to classify "flight time" as compensation in some cases. Since every pilot is getting flight time, the FAA can, at will, deem any flight is for "compensation". Fighting that can be exhausting in court.

This overly broad definition basically gives the FAA unilateral and unfettered power to violate anyone.

https://www.aopa.org/news-and-media/all ... hey-see-it

https://shackelford.law/news-aviation/w ... o-the-faa/

I'd like to see Congress rein in this overreach on the FAA by limiting what the FAA can call "compensation".

Mike C.

Yeah.

I've been peeing into the wind for years over this "because I said so" manner of governance.

I believe we fought a war over that.

The first one.

In 1776.