Flying “off the balance sheet” has always occurred at the fringes of our industry, but now it is becoming mainstream. It shouldn’t be. The IRS seat approach is virtually harmless to companies that have incorporated corporate aircraft shuttles in their flight operations, because the number of business butts in seats then dominates the calculation. That leaves the taxmen little room to disallow deductions for entertainment use of the aircraft by its owners, officers and directors.
Blowing the Whistle
June 2nd, 2009
There are lessons learned looking back 10 years after creation of the Whistle-blower Protection Program for airline employees. Whistle-blower protection does enhance safety. The real price of this safety is the burden of documenting that a pilot’s career is not harmed or ended if a pilot takes a stand to prevent a violation.
Corporate Aircraft Use Policy
May 5th, 2009
For many years, the majority of corporate flight operators did not feel any need to put their aircraft use policy in writing. But times have changed.
Crime, Punishment and Safety
April 1st, 2009
In the vast majority of FAA enforcement cases, the FAA does not have to prove or even discuss the issue of intent. A pilot who puts an incorrect answer on an FAA medical application has not committed fraud if the pilot simply did not understand the question. However, the pilot may still receive a suspension for the innocent mistake. But a suspension doesn’t compare to the consequences for falsifying a form, which start with revocation of all certificates and can end with jail time.
Interpreting FARs
March 1st, 2009
Pilots and mechanics struggling to understand a particular regulation can often find conflicting guidance, because there is so much guidance from which to choose. If operating under Part 91, the guidance hierarchy goes like this: U.S. Constitution, Statute, Regulation, Preamble, Advisory Circulars, Aeronautical Information Manual, then Legal Interpretation. When confronted with conflicting guidance, specific beats general.
Saving the Flight Department
February 15th, 2009
The straightforward options of offsetting costs under Part 91 include time-sharing, joint ownership and interchange. The less-than-straightforward options are dry-leasing the aircraft or sharing the expenses under Part 61.113. Any flight department with a blank flying schedule and an interest in self-preservation should explore all options available for getting its aircraft airborne again.
Operating Illegal Flight Department
January 15th, 2009
There is simply no question that a corporation operating under Part 91 whose sole purpose is to provide air transportation is an improper commercial operation in the eyes of the FAA. If the passengers pay any amount that is not specifically allowed under Part 91, the pilots and the company are at great risk. Then there is the matter of insurance and liability.
Tipping Government Officials
November 15th, 2008
Congress enacted the Foreign Corrupt Practices Act of 1977 (FCPA) to make it illegal for a U.S. company to bribe a foreign official for the purposes of obtaining or retaining business. There is an exception to the law, sometimes called the grease payment, which allows payment to get a government to do what it is supposed to do. There is even a list of examples that might need some grease.
Safety Management Systems
October 15th, 2008
The Safety Management System (SMS) is essentially a quality management approach to controlling risk. Liability issues should not impede adopting a Safety Management System for your flight department. Once SMS become standard for Part 91 flight departments, those operations that don’t have SMS appear negligent for not meeting the standard.
