The FAA provides clarification on “Holding Out” - Expense Sharing vs. Compensation or Hire

On February 25, 2020, the FAA issued Advisory Circular No. 61-142 in an effort to clarify the exemption to the prohibition on compensation or hire for private pilots acting as PIC in Part 61 operations. This well known, but often misunderstood, exemption is for pilots simply looking to share flight expenses with passengers.

The important take away from this AC is that modern technologies like phone Apps, Social Media, flying club websites, etc., while they may seem to make expense sharing on ‘common purpose’ flights easier, these technologies broad reach also increase the risk that the FAA will take a position that you are “Holding Out” and that your expense sharing is actually compensation or hire.

Please contact us to schedule a consultation to discuss whether your intended operations could result in an enforcement action.

Key terms:

• Air Carrier

• Air Commerce

• Commercial Operator

• Compensation

• Common Carriage

• Common Purpose

• Holding Out

• Operating Expenses

• Private Pilot

• Pro Rata

AC: “Sharing Aircraft Operating Expenses in Accordance with 14 CFR 61.113(c)” is available here: https://www.faa.gov/documentLibrary/media/Advisory_Circular/AC_61-142.pdf