The Penny Pilot: cost-sharing on private flights to avoid commercial regulations
- Credit: Philip Whiteman
Tim Cooper discovers that the CAA's cost-sharing regulations mean that if passengers on a private flight pay one penny towards the cost, commercial safety regulations are waved
‘If it looks like a commercial flight... is advertised like a commercial flight and if the pilot benefits in almost any way, then it counts as a commercial flight.’ That’s the FAA’s line, but in Europe relaxed rules have made private flying with paying passengers the new norm.
Last year I looked into operating sightseeing flights around the Isle of Wight. We have a Fuji FA-200, G-MDAM, bought for a Covid-delayed African project, which we wanted to put into harness. There was no doubt that this was going to be a commercial operation which in regulatory-speak is, ‘any operation of an aircraft, in return for remuneration… which is available to the public’. Therefore, we would need some level of CAA permission to do our trips round the bay.
The simplest type of permission is a Restricted Air Operator Certificate (AOC) for what are known as A to A operations, which would limit us to day VFR flights, restricted to a radius of operations of fifty nautical miles. The certificate would cost a reasonable £96 for each month of operation. If we wanted to go from one place to another in daytime visual meteorological conditions then we would need a Restricted A to B AOC, which involves more compliance and expense but is far less costly than the full AOC that we would need were we to operate as an air taxi under IFR or at night. This would cost many thousands of pounds, and involves volumes of compliance.
By operating under a Declared Training Organisation belonging to a chum, we could avoid the AOC route entirely by offering our aerial tours as ‘trial lessons’ with the ‘student’ being accompanied by two other people on board. Doing so would eliminate much of the compliance, but we decided against this, swayed by what our insurance company−aviation’s ultimate regulator−would say, were we to splash MDAM into the Solent with three innocent passengers who had paid for a sightseeing trip, not a spurious flying lesson.
Now, you might think I am hopelessly naive, but after decades spent in Africa, I find I remain ignorant of many aspects of aviation in the UK. So, I was genuinely dumbfounded to discover that exactly the same sightseeing trips we wanted to offer to passengers were not only already available, but were being advertised very professionally online. The prices were about the same as we had planned. I had stumbled upon the world of cost-sharing flying.
Cost-sharing flights means no commercial regulatory compliance
I found that it is perfectly legal for any private pilot to share the cost of their flight with other people without any of the regulatory compliance that comes with an AOC. This is possible because as CAP 1590 explains, ‘EASA Ops includes a derogation at Article 6.4(a) that allows a flight that would otherwise be a commercial air transport flight [my italics] to be flown in accordance with the operating rules for non-commercial flights subject to specific conditions. The conditions are that: The flight is a cost-shared flight by private individuals; The actual direct costs of the flight must be shared between all the occupants of the aircraft, including the pilot, up to a maximum of six persons; and only other-than complex [sic] motor-powered aircraft may be used.’
Got that? A flight that would otherwise be a commercial flight can go ahead without the safety net that is designed to protect innocent paying passengers, just so long as the pilot makes a contribution to the costs. Golly. That means that if the pilot pays a share of the flight−as little as one penny per flight, according to the CAA−then the following commercial flying requirements are dropped: pilot licensing, pilot line training, pilot route checks, pilot age limitations, pilot medical requirements, operating limitations, aircraft maintenance standards, flight and duty times, safety management systems, and so on.
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The list is extensive. Instead of complying with these commercial regulations which have been developed with one primary goal, the safety and protection of the innocent passenger, our penny pilot needs only to comply with Part-NCO. These are the relaxed rules for private, non-commercial operations in which greater risks are acceptable. Greater risks, really? Yes, a February 2020 report, CAA CAP 1886 UK Approach to Recreational General Aviation Safety: An Independent Review, had in its terms of reference the following stark statement: ‘applying the same [commercial safety] standard to private or non-commercial flying would, in effect, eliminate private flying as it would be impossible to achieve the levels of safety achieved by Commercial Air Transport in the modern age.’
Forgive me repeating this, but I find it astounding. A brand-new private pilot−with one hundred and thirteen hours of total time in one case we saw−can advertise and then take five paying passengers whom she has never met from London to the South of France, the CAA agreeing that these passengers will forfeit all the ‘the levels of safety achieved by Commercial Air Transport’ so long as the pilot pays one penny towards the flight. Is this the outcome that EASA really wanted when it introduced the new cost-sharing rules?
Let us recall that, ‘the privileges of the holders of a PPL(A) are to act without remuneration as PIC or co-pilots of aeroplanes engaged in non-commercial operations’. Thus, a PPL cannot charge money for flying, but under cost-sharing rules can charge passengers to pay for their flying−minus that important
one penny share of the costs. Isn’t our penny pilot sailing a little close to the wind? No−not according to regulation.
The original reason for cost-sharing flights was ‘building skills and experience’
Writing about the April 2014 changes to Air Ops, the UK CAA, in May 2018, managed to sound like a deputy headmaster who had surprised himself by letting the whole school off a cross country run on an unexpected whim. 'Costs of private flights no longer need to be shared equally between pilots and passengers. Private pilots are also allowed to carry passengers who are not friends, family or flying colleagues. Previously, the pilot of a GA aircraft keen to carry passengers was bound by a number of restrictive rules designed to prevent the pilot benefiting financially in any way. Profit is still not permitted but the costs can now be shared as set out in the rules.’
The passengers pay, the pilot not (well, okay; a penny). A year later, in 2019, the CAA tried to explain the intent of the cost-sharing regulations, ‘Ultimately, the clear intention of the cost-sharing rules is to allow pilots to fly more−building skills and experience−while sharing their passion for aviation with others’. The CAA can talk about ‘the clear intention’ as much as it likes, but with current regulation our penny pilot can carry on ‘building skills and experience’ at the expense of paying passengers. How good is that?
Let us look to the beginnings of the new, permissive cost-sharing regulations, recalling how rapidly consumer technology has changed in recent times. I think this point is crucial. It might explain the difference between the original intention of the regulation, and what is now going on. The first iPhone was launched in 2007, at which time mobile phone apps were something for the future, and social media as we now use it was nascent. In the run up to issuing cost-sharing rule No 965/2012 EASA couldn’t reasonably have foreseen the extent to which social media and associated apps would affect our lives just a few years later, and certainly could not have anticipated how their seemingly simple and well-intentioned rule change would become the catalyst for a successful new form of aviation business−quasi-commercial cost-sharing flights promoted on internet platforms using apps.
Quasi-commercial? Yes, I think this is a fair term to use, since any reasonably savvy penny pilot can arrange their direct costs, as set out in the derogation, to ensure that their flying is to their financial benefit−if you, like me, consider that flying free of cost to be a financial benefit. This is especially true for cost-shared flights in rented aircraft rather than owner-operated aircraft, for which the direct cost rules are far more prescriptive. Let me be clear and state that I do not believe that all pilots who share costs are pushing boundaries in this way, but it is quite clear that the term ‘quasi-commercial’ is appropriate in many cases. I find this worrying−so do almost all the commercial pilots I know.
Here’s a small sample of currently advertised flights: London to Exeter in less than 90 minutes, one way flight, 3 seats, 1h 20m total flying time, £89 per person. That’s quicker than the train. Or this: One way to Bruges in a Piper, 2 seats, 2h 30m total flying time, £165 per passenger. Well, that sounds a reasonable price from West London, and an hour quicker than Eurostar. Or, if you are based in Germany, how about this: Augsburg to St Tropez, First Class in a Pilatus PC-12, €2,133 per passenger, IFR. That’s €10,665 for five friends to pop down to the south of France in executive comfort. But not a commercial flight, it says. I will leave you to scribble some numbers, then decide whether these flights look very ‘sharey’.
In France, DGAC put a stop to cost-sharing apps
Let’s time-travel back to 2015: the smart phone has proved popular, and social media and apps are part of everyday life, from booking bus tickets, to buying a bunch of flowers, to finding a date for the night. The opportunity presented by cost-sharing flying attracted app developers: Wingly started in June, and Coavmi sprinted from the blocks earlier still, in 2014. It is unsurprising that these developers are both based in France, which arguably has the most vibrant GA in Europe.
The French regulator, the DGAC, reacted vigorously when the apps first appeared. In an open letter on 15 September 2015, which I quote at length, the regulator said, ‘Various [cost-sharing] projects are being developed through platforms facilitating the relationship between private pilots and the public. This activity… does not provide the expected safety guarantees for public passenger transport. The regulation allows a private pilot to share the cost of the flight with members of circle of family and friends during a private or leisure flight. The extension to the general public beyond the private circle approaches public transport. But Commercial Air Transport is subject to a set of binding rules on professional pilots, the aircraft, its maintenance, its equipment and operating procedures. Public transport has a very high level of safety, higher than that of general aviation. Thus, any form of marketing or remuneration is prohibited for flights by a private pilot.’
The letter continued ominously, ‘Non-compliance with these provisions is subject to disciplinary and criminal penalties for pilots and companies when projects move away from the regulatory design of private flights. The DGAC recommends great caution to pilots and entrepreneurs considering this option.’
The FAA has rigorous rules on cost-sharing flights
Across the Atlantic, the FAA has long had rigorous rules on cost-sharing. An enterprising app developer, Flytenow, tried to bring ‘market efficiencies’ to cost-shared private flying in the United States with an app. The FAA fought against this and carried the day in court: the app was outlawed. The FAA clarified its position on cost-sharing in
February 2020 in AC 61-142. Pilots cannot receive any compensation which ‘is the receipt of anything of value that is contingent on the pilot operating the aircraft; i.e., but for the receipt of the compensation, the pilot would not have taken that flight. Reimbursement of expenses, accumulation of flight time… can be considered compensation. A pilot can only offer shared flights to family, friends and close acquaintances, and may not advertise the availability of a flight on the web other than in very limited circumstances which specifically exclude cost-sharing flight apps.’ And so on.
The FAA is very clear about apps which are ‘designed to attract a broad segment of the public interested in transportation by air. Any prospective passenger searching for flights could access the app, sign up, search for flights, and readily arrange for travel. Therefore, the FAA would consider pilots advertising flights on the app to be holding out.’ And that’s against the law in the States.
The American stance can be summed up thus: if it looks like a commercial flight, is available like a commercial flight, is advertised like a commercial flight, and if the pilot benefits in almost any way, then it counts as a commercial flight. If that flight is made by any pilot whether private or commercial, without being operated under the proper Commercial Air Transport regulations then the flight is illegal and the pilot will be prosecuted.
The French were clearly of the same mind, and regardless of the Europe-wide prohibition on states gold-plating EASA regulations went ahead and imposed tough additional conditions on cost-sharing flights. Invoking Article 14(1) of the Basic Regulation (‘immediate reaction to a safety problem’) the DGAC imposed restrictions on the pilots, the flights and the aircraft involved in cost-sharing flights. The Euro Air Sports newsletter reported, in December 2018, that ‘The aim was to assure a higher level of safety to ‘members of the public’ paying a share of a private flight, compared to a pilot’s acquaintances flying the same private flight and paying the same amount of money. This has been presented as an intermediate level of safety, between the safety of current private flights and the safety of commercial air transport provided by airlines or air-taxi companies.’
The French conditions imposed on 26 August 2016 were that for A to A flights of a duration less than thirty minutes and within forty kilometres of the airport in daytime VMC, the pilot must: hold at least a PPL; have logged at least two hundred hours since licence issue; and have flown at least twenty-five hours in the last year. Other cost shared flights were similarly restricted to day VMC, but the pilot must also have an Instrument Rating or hold a CPL or ATPL, or be a flight instructor.
A certain Monsieur ‘M’ from Bordeaux decided that the DGAC was acting illegally, and took the matter to court in France. He won: the court wagged a severe finger at the DGAC, instructing it to remove the gold plate, and awarded M €500 for his trouble.
Is cost-sharing flights with "passengers" safe?
Was the French regulator wrong to panic in the first place? EASA has regularly scrutinised the application of the cost-sharing rule since its inception, and has so far found no reason to amend the rules. In 2017 EASA and the main app companies signed up to the Charter to promote the safety of non-commercial General Aviation. This charter is a code of conduct, the terms of which the app providers say they and the pilots who fly with them will adhere to.
EASA agreed to ‘organise an annual meeting with all platforms signatory of this charter and national competent authorities,’ at which ‘The platforms will: share statistical data [and] report on significant safety events known to them; [and] report on the implementation of the charter. EASA will: share safety relevant information with platforms and national competent authorities; [and] update platforms on the publication of relevant safety promotion material. EASA, the national competent authorities and the platforms will discuss the continuous improvement of the charter.’
The last meeting was in February 2020 and so far there have been no significant reasons found to amend the cost-sharing rule. Let me repeat that: penny pilots throughout the thirty-one EASA countries, plus the UK, have not been the cause of significant safety concerns over the past seven years. It would seem that their flights have been no less safe than commercial flights in equivalent aircraft.
I didn’t expect that to be the case, but if true then leads to a very important question: why don’t we simply drop all the commercial requirements for activities in small aircraft and simply apply the relaxed Part-NCO across the board? I hear the gasps from commercial pilots and air taxi operators already! My libertarian instincts tell me that if the evidence is correct then this is the logical conclusion. But my experience as the Accountable Manager of an AOC operating aeroplanes in the exact category covered by the cost-sharing rule tells me the exact opposite. This leaves me feeling very uncomfortable. Libertarian logic versus intuition backed by experience.
I think it is important to consider whether innocent passengers even for a second really understand the potential safety implications of waived commercial regulations at a time when our complicated and opaque licensing regulations are properly understood by only a handful of pilots? I know that the app companies publish plenty of information about the nature of cost-shared flights - they are bound to do this under the safety charter - but how many of their customers actually read terms and conditions on websites? Personally, I rarely read Ts & Cs on websites.
How about asking a question to try to resolve things? Your neighbour’s son is celebrating his eighteenth birthday. His granny has generously bought him and his girlfriend a voucher for a flight to Le Touquet in a light aeroplane. The flight will be made in an aeroplane with unknown maintenance, will be flown by an unknown private pilot with unknown experience who may never previously have crossed the Channel. Lots of unknowns there. What do you advise your neighbour? If you are happy with the scenario then let’s leave the cost-sharing rule as it is. If, on the other hand, you suck your teeth and offer some words of caution to your neighbour then you, like me, might think that cost-sharing flying is due for a review, especially now UK is free from EASA rules. In which case you will be interested to hear that this is exactly what I was told is going on by the Department for Transport.
‘Leaving the EASA system has given the UK the opportunity to consider more closely the rules around cost share flights,’ the DfT told me. ‘We continually review safety regulations to ensure they are fit for purpose. Work is ongoing within the CAA to consider whether the current rules around cost share flying effectively mitigate the risks associated with this form of aviation, while maximising the benefits these flights provide.’ When I asked about the penny pilot issue I was told, ‘Whether the pilot in a cost share flight should be subject to a minimum contribution, as a proportion of the flight cost, is under review. This does not necessarily mean that the policy approach taken will change.’ The DfT added that, ‘More information on effective cost-share flights was published as Annex G to the Independent Review into the UK’s approach to GA safety, published last year.”
I suggested that one of the aims of cost shared flying−making hour building for pilots cheaper−could be achieved by following the FAA rules on the dual logging of PIC time when a CPL student flies ‘under the hood’ while his fellow student acts as safety pilot. I was told, ‘this is not something the CAA are looking into as its regulatory licensing framework is different to that of the FAA’. I was not told what ‘licensing framework’ the UK intends to follow in the future. Is the CAA still in thrall to EASA or might it develop the confidence to look for a better legal framework−ICAO templates, for example, or America’s Federal Aviation Regulations? After all, if the DfT decides to change our cost-sharing rules in favour of pilots paying pro rata costs of a flight then that will be a direct lift from FARs.
In the meantime, it is caveat emptor for our innocent passenger.
Goodwood Flying School said no to cost-sharing
In 2014 Goodwood Flying School was approached by one of the cost-sharing app companies. Mark Gibb, the aerodrome manager, explains what happened next: “We were concerned that pilots would be too tempted by having their flying paid for by third parties, and this would force the pilots into flying outside their own limits. So, we decided that we just didn’t want to be part of that.” Gibb told me that “we did find one PPL who was advertising on an app, and was posting videos on social media of him flying with his white shirt and the epaulettes - passengers get confidence from how someone’s dressed. So, we shut that down”.
Gibb strongly discourages flights from and into Goodwood that have been arranged by online apps, but concedes that there is no way of policing this policy.
A quick straw poll on a Facebook GA forum resulted in an 80/20 split against cost-sharing apps, however the minority were vociferous in their support of the apps. I recently overheard a conversation at Goodwood in which a new PPL with a little over thirty hours post-licence experience was adamant that he wanted to use an app to find passengers. His reason: “I want to be a captain”. Interestingly, his Facebook profile shows him wearing Ray-Bans, white shirt and, yes, you guessed it, captain’s epaulettes.