NO CAPITAL GROUP - WARNING

Group Flying

NO CAPITAL GROUP - WARNING

Andrew Komosa 23/06/2009, 10:36 PM
I have operated a number of light aircraft groups in my time, normally maintained to public transport standards as most pilots prefer the no equity system whereby they pay a monthly subscription, but apart from hourly flying charges and landing fees, have no further liability towards maintenance.
However, I am aware there are numerous such groups running private category aircraft and this could be potentially illegal and those pilots could find themselves uninsured in the event of a claim.
The CAA regulations demand that any aircraft used for "hire or reward" must be maintained to public transport standards. The other problem being since 2008 most air cooled light aircraft engines cannot be used for "hire or reward" if they're older than 12 years (+20% on condition), even if the engine has not reached it's TBO.
However, a minimum share holding of 5% will get around the rules, as the aircraft is seen as being privately owned and, hence, can be maintained to private category standards.
However, not all pilots can, or want to, afford that 5%, or the liability that can lead from their share holding, so it's possible for a contract to be drafted to keep within the rules, while operating a non capital group using a private category aircraft.
Please contact me through http://AviationLawyer.co.uk to get free advice and assistance today, as I wouldn't want any fellow aviators to fall foul of the regulations.

Re: NO CAPITAL GROUP - WARNING

David1524 31/07/2009, 10:09 AM

Andrew, This was an interesting post thank you but could you please then explain how "hire and reward" can be derived from a "cost share"? ie, precisely that. Sharing an operating cost without any element of profit/reward. If that method of doing something by mutual agreement were not recognised as bone-fide surly a non profit making, charity organisation can't operate as such and the CAA wouldn't have finally accepted that a couple of chaps could share the cost of a flight without calling it "commercial"? Given your obvious expertise and "Warning" I would be most grateful if you would post your legal determination as to the strict meaning in this context of "Hire or Reward" as opposed to "Cost sharing" (without hire/reward/profit/). Why on earth should anyone own any percentage of anything, when you are simply entering into an agreement to share an expense arising from its shared use? Hiring is quite clearly an agreement in a business contract to use something, owned by someone else, for profit. Isn't it? Borrowing something at a shared operating cost is simply that! I can see a distinct difference, can't the law? There, I think lies the answer.

What would the situation be if a few chaps hired an aircraft for a year and shared the flying cost between them. A contract exists between the hirer and a sharing situation exists between the flyers (there is a "consideration" in the contract with the hire firm in that agreement, but "consideration" any contract between the sharers). Or, if I’m talking complete nonsense please explain where I am mistaken.

Why is a "warning" necessary against sharing an expense ??