Flying Ninja

Here's a "theoretical" scenario. A flying club has a Skyhawk, and the airplane is registered under the 501(c)(8) corporation's name: FlyX, Inc. FlyX, Inc. is run by a board of directors (3 people) elected by its club members annually. No member owns any shares of the corporation. No board of directors own any shares of the corporation. No shares are sold to anyone, nor are any shares issued to any member. Each member pays into the flying club an initiation fee and a monthly membership dues fee. New members may join FlyX, Inc. by a general vote of the membership and is subject to the initiation/monthly fees. Members pay an hourly use fee when flying the Skyhawk. FlyX, Inc. flights operate under Part 91.

The airplane is used only by its club members only, and is used for flight instruction given by CFIs who belong to the flying club, as well as CFIs who do not belong to the flying club. The board of directors believe that the Skyhawk does not require 100-hour inspections because the members of the corporation owns the airplanes.

Question: Does this Skyhawk require 100-hour inspection?

(I know the answer to this but want to see what others come up with.)

1wrangler

I have been a member of a flying club that was much like the one your describing. The answer is no, you do not need to do a 100 hour inspection because the members own the airplane i.e. it is not being rented out for a profit. I don't remember what we had for insurance, I'm thinking the plane does not need commercial insurance for the same reason already mentioned.

Flying Ninja

The members do not own anything. Their names are not on the aircraft registration. They do not own shares in the corporation. The aircraft is registered under the corporation name only. Since the corporation is considered a living entity by law, the aircraft is technically owned by the corporation.

In this setup, I would argue that the members are merely a privileged group of renters.

Thoughts?

IDIOTPILOT

The way I understood it was that if the airplane was being used for flight instruction that it has to have a 100 hour. It seems in this case that the plane is used both for recreation and flight instruction. The flight instruction would require a 100 hour.

Mitragorz

It seems as though as long as the CFI is providing the airplane, and is not getting paid for the instruction, then the 100-hour inspection is not required.

1wrangler

Well yeah, when you say it that way what you are describing is a flight school that only rents to members. So yes, in that case you likely would need 100 hour inspections. But, I don't mean to split hairs here, I had experience with a flying club in which I did own a share of the plane, the case you just described is beyond my knowledge..

1wrangler

Not really true, if you go out and buy your own airplane, then hire a flight instructor to give you instruction in it, you certainly do not need the inspection.

NoyGonnaDoIt

That's correct. The reg says very specifically that instruction for hire in an airplane provided by the instructor requires the 100 hour inspection.

There's a >35 year old FAA regional counsel interpretation on this. Regional interpretations don't have the status of the national ones but they do give some idea of the FAA's thinking.

In summary, in a flying club, the members (including students) have direct rights to use the airplane by virtue of their membership in the club. In that situation, and whether or not the CFI is also a member, the airplane is being provided for by the student. So 91.409(b) doesn't apply.

In addition to being a regional opinion, there are limitations. I wouldn't, for example, try to apply that to the "members" of a for-profit organization that was really a rental operation and a "club" in name only. A "real" opinion would need to be based on how the organization was set up and a full review of its incorporation papers, bylaws and organizational rules in the context of not only FAA rules but the laws of the state in which the organization was created.

But FWIW (note the reference to the old number of the reg):

==============================
February 14, 1975
Mr. Robert W. Slater

Dear Mr. Slater:

We refer to your letter dated January 28, 1975, which requests our interpretation of FAR 91.169(b) as that regulation might apply to your flying club.

You state that the Georgia Lockheed Employees Recreation Club, Inc. (GLERC) is a nonprofit organization which owns five Cessna airplanes. These airplanes are operated by members of GLERC Flying Club, Inc. It is not clear whether Georgia Lockheed Employees Recreation Club, Inc. is the same organization as GLERC Flying Club, Inc. If these two corporations are in fact different, I assume that the Recreation Club permits the Flying Club to utilize the airplanes by lease or other similar arrangement.

You pose the following question:

If a student furnishes an airplane which is not operated for hire to be used for his own flight instruction and he then pays a flight instructor for instruction, must the airplane have received a 100 hour inspection within the previous 100 hours in order to comply with FAR 91.169(b)?

For the purposes of our reply, we assume that the "student" referred to above is a member of GLERC Flying Club, Inc. and the airplane furnished is one of the Cessnas operated by the Flying Club.

Section 91.169(b) pertinently provides:

... [1] no person may operate an aircraft carrying any person (other than a crewmember) for hire, and [2] no person may give flight instruction for hire in an aircraft which that person provides unless within the preceding 100 hours of time in service it has received ... 100-hour inspection ... (Numbers and brackets added.)

In the first instance, the student is not carrying anyone for hire. Moreover, the flight instructor is a crewmember. Thus, there is no requirement for the airplane to have a 100-hour inspection.

In the second instance, the flight instructor is not providing his own airplane, the airplane being furnished by the student. Thus, this part of Section 91.169(b) does not appear to be applicable.

In view of the above, it is our opinion that FAR 91.169(b) does not apply to the factual situation presented.

Very truly yours,
R.R. HAGADONE
Attorney
Office of the Regional Counsel
==============================

rickair7777

I don't think establishing a corporation for liability purposes is going to invalidate the ability of the owners to fly and receive instruction in an airplane they provide. The FAR doesn't say they have to "own" the airplane, merely "provide" it.

The FAA is probably not interested in the exact financial mechanism as long as it is not an attempt to circumvent the rules. A one-airplane club with a handful of members, and new members approved by vote sounds very legit.

A large FBO-run for-profit "club" which calls it's renters "members" may run afoul of the reg. But there's a big grey area...my club is very large and the members consist of both owners who offer their airplanes for rent for profit, and non-owners who just "rent". Somehow they stay barely on the legal side and do not require 100 hours (we have been scrutinized 1001 times re. Mx). The lack of ownership on the part of most of the renters is not an obstacle, because they are part of the club which, collectively, arranges to have airplanes available for it's members. The fact that certain owner members can profit from this arrangement apparently does not invalidate the concept of the members collectively "providing" airplanes to themselves.