91 to 135

[mense]

Hello, I am looking for info on putting our jet on EJM’s 135. Can anyone give me some insight on I can expect and what I will have to know for the checkride? Does EJM give the checkrides? What happens if you bust? Thanks for any info you can give me.

 

[Capthuff]

OMG - Why would you want to put it on EMJs 135? Just to do overflow for NetJets? The concept seems ok I guess but I have a friend who did it with his owner and now he gets calls at all hours of the night and if he cant respond in reasonable time they cant use him. It ends up costing his owner more than it is worth by a long ways. So he flies a few trips but it is quite a hassle.
There are many other operators out there to hook up with that aren't as expensive. And they can keep your A/C busy. More than likely you wont bust the check ride because it is your plane. You should be able to fly the wings off of it.
And check rides are a breeze.
I dont know what region you are with but even that doesnt really matter, you can operate on anyone's certificate. I work for a 135 that would be happy to put your A/C online.
Good luck with this.
PS if your owner just wants a little use to offset his costs, have you thot about selling 100 hours in block time? or even 200

Cappy

 

[Capthuff]

I just read what I wrote. Please let me clarify myself. I did not intend to imply that EJM is a bad company. They have a great reputation in the industry. It is, however that there are so many other options out there that if I was in your position, I would think there could be other options that would better suit the needs of the owner.

Sorry if I offended anyone.

Cappy

 

[mense]

Cappy,
Could you explain to me about selling block time? I guess you stilll have to be 135 to sell any type of time?
Thanks for the info

 

[Capthuff]

Mense
Selling Block time is an alternative to 135. The owner of the A/C finds a party that needs a plane but cant justify buying a plane. for example, company X has been chartering a plane for a few years. they realize they fly about 100 hrs a year. It would be cheaper for them to buy a block of time on some one's plane then to continue chartering. That is where you come in. Legally your owner can sell a portion of time on his plane to someone without actually selling part of the title of the plane. Figure how much your plane costs to operate minus fuel and crew fees. The block time purchaser needs to pay for fuel, miscellaneous crew expenses and actual crew costs ( if you have a management company for the plane that is easy - just bill company X for your daily fees ) The owner of the plane can not charge company X for pilot services. In order to be legal a copy of the lease agreement needs to be in the A/C at all times.
Lets say your dry cost is $1000 per hour. Company X pays your owner $100,000 for 100 hours to be used over a 1 year period of time as stated in the lease agreement. Every time you fly company X they pay for the fuel and your daily crew rate, as well as incidentals. If they dont use all 100hrs they lose the time. This is how it differs from just renting your plane ( 135 ). There are books out there that explain how to do this and they go into every detail as well as show sample leases. It briefly talks about it in the FAR-AIM too. ( I have seen it but I just looked and I can't remember where it was).
As you know, adding total hours to the useage of an A/C over a year reduces the fixed hourly costs, therefore reducing your owner's cost of flying his own plane. The trick comes in finding the right amount of hours to sell. The more you sell the cheaper it is for your boss to fly, however you will be working more and flying more and you need to be compensated for it. This can be negotiated into the block timer's fees. If you are part of a two captain qualified crew, find a part timer to fly for the block time and the two of you alternate trips.
looking for block time purchasers can be as simple as asking your boss. Rich people know rich people, and he may know some one. Also ask all the line guys you know. They often know who charters alot because they see them all the time.
Putting your jet on some one elses 135 is the first thing and easiest thing that comes to mind but beware of rental car syndrom. If your boss is really particuler about his plane he will probably prefer to know the people in his jet as opposed to letting just anyone on it.
Good luck and I hope I helped alittle bit.
Cappy

 

[mense]

Cappy,

Thanks again for the reply.

One last question, what about capital gains taxes on the 100 hours you sold? If your aircraft is depreicated out all the way and now you sell 100 hours of flying time, will you have to pay the capital gains? This could be our answer to our prayers if we don't have to do the 135 thing.

Thanks.

mense

 

[P3-Adub]

135 ?

Great advice from previous post, I would recommend getting together with your local FSDO and getting the FAA version so as to not stub your toe. Operational control with the "DRY LEASE" is a big concern but not too much trouble, I would say far less than putting your plane on someone's 135 certificate. To Lease time in your part 91 plane to another company is a great way, as mentioned above, to offset some of the costs of ownership. The downside is that the absolute flexibility goes away when both parties want to use the plane. Make sure to get the specifics on crewing the plane while the other company uses the plane. A word of caution about liability, make sure the current owner gets very clear and valid advice on WHO is responsible when it is being operated by someone else, 91 or 135. Make sure to talk this over with your insurance provider. The good old "deep pockets" approch can wipe out any benefits should a claim be necessary. I have found the FAA to be very helpful with second party leases and Interchange Agreements, that is when two companies swap time in each other's planes to better suit varying mission requirements. You are also able to have access to a plane when your's is down for maintenance.

Good Luck !

 

[Capthuff]

Mense,
You brought up a good question. With a block time partner you are only selling time on the jet, not actually part of the title, therefore capital gains is not an issue. Another benefit about block time ( dry lease ) is, it is for a specific period of time. At the end of the lease, usually one year, the parties have the option of renewing it or walking away. As we all know, alot can change with business in a year and if your boss's situation changes he might not need to supplement the jet anymore, or if he "falls out of love" with the block timer, he can find someone else. It also puts you in a good position. If the block timer see he has more use for the plane, he might buy one for himself, and that is great for the industry.
If your boss actually sold a share of the jet, and things didnt work out with the partner, it could get messy when they split up. I've seen this happen with a mooney and a citation I used to fly. One partner wanted to enhance the aircraft and the other liked it the way it was - it created tension.
P3-adub also brings up a good point. The FAA is a good resourse for the wording of the lease. However they are not lawyers so take their recommendations and call your lawyer. The Feds I have dealt with in the past on this subject have really been helpful. ( Imagine THAT )
Another thing Mense, Are you a mamber of NBAA? They have a legal Q&A dept.

Cappy

 

[mense]

Great info folks, Thanks again. I'll take all of this info to my boss.