In a Proposed Interpretation published today, the FAA states that it is “considering revising its broad prohibition on pro rata reimbursement for the cost of owning, operating and maintaining a company aircraft when used for routine personal travel by senior company officials and employees under certain conditions.” According to the proposed interpretation, the FAA has tentatively determined that under FAR 91.501(b)5 “a company could be reimbursed for the pro rata cost of owning, operating, and maintaining the aircraft when used for routine personal travel by an individual whose position merits such a high level of company interference into his or her personal travel plans.” However, all personal travel would not meet these conditions. For example, flights that would not qualify include emergency circumstances and personal travel that is unlikely to be altered or cancelled such as a wedding, funeral of a close family member or necessary surgery or other medical treatment.
In order to qualify, the FAA indicates that a company “should maintain and regularly update a list of individuals whose position within the company require him or her to routinely change travel plans within a very short period of time” and that list would need to be shared with the FAA upon request. Also, the company’s board, or equivalent governing body, would need to determine which employees meet the criteria for inclusion on the list and would need to document their determination that the flight in question was of a routine personal nature.
It is important to note that FAR 91.501(b)5 applies to “large airplanes of U.S. registry, turbojet-powered multiengine civil airplanes of U.S. registry, and fractional ownership program aircraft of U.S. registry that are operating under subpart K of this part in operations not involving common carriage.” However, companies operating other aircraft may be able to take advantage of the regulation under the National Business Aviation Association’s (NBAA) Exemption 7897, as amended. The NBAA’s Small Aircraft Exemption, as it is called by NBAA, allows NBAA Members to operate small civil airplanes and helicopters of U.S. registry under the operating rules of FARs 91.503 through 91.535.
This is certainly good news for business aviation. I would expect that any comments to the proposed interpretation, due no later than August 9, 2010, may focus on the need for further explanation/clarification regarding the types of personal travel that the FAA believes would not qualify and also the specific type/quality of documentation that will need to be maintained in connection with qualifying personal flights.
If you have questions regarding the proposed interpretation or would like further information, you may contact Rebecca B. MacPherson, Assistant Chief Counsel, Regulations Division, Office of the Chief Counsel, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-3073.