Definition of Compensation or Hire

by John

I work for a company flying the company’s plane carrying the company’s owners and employees. Are we considered operating the aircraft for hire?

This question is in reference to FAR 91.205(b)(12) which states:

"(b) For VFR flight during the day, the following instruments and equipment are required:

(12) If the aircraft is operated for hire over water and beyond power-off gliding distance from shore, approved flotation gear readily available to each occupant and, unless the aircraft is operating under part 121 of this subchapter, at least one pyrotechnic signaling device. As used in this section, “shore” means that area of the land adjacent to the water which is above the high water mark and excludes land areas which are intermittently under water."

ANSWER: Where it is doubtful that an operation is for compensation or hire, the test applied is whether the carriage by air is merely incidental to the person's other business or is, in itself, a major enterprise for profit.

Flying an aircraft for company business is not considered compensation or hire.

Return to FAA Regulation Questions.

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