Turbojets and Leases

[proav]

A company that I do some contract flying for operates a Citation 501SP. They want to do a lease with another company and asked me for information. It appears to me that FAR 91.501 does not allow someone to make a profit on a rental or lease with a "Large or Turbojet powered aircraft". They were told that it was basically the same as renting a small plane like a flight school would do provided they did not provide the pilot. I think that they were mis-led (sp). Can anyone shed some light on the subject? I know that there are provisions for a time share and joint ownership and things of this nature but this does not fall into that catagory.
Thanks

 

[501261]

You’re right; 91.501d clearly states what you can charge for on a dry lease (no pilot).

Only an air carrier can provide a wet lease (with crew).

A big “gotcha” is 91.23. You have to report the “lease” to your FSDO before it becomes legal.

 

[Lead Sled]

A company that I do some contract flying for operates a Citation 501SP. They want to do a lease with another company and asked me for information. It appears to me that FAR 91.501 does not allow someone to make a profit on a rental or lease with a "Large or Turbojet powered aircraft". They were told that it was basically the same as renting a small plane like a flight school would do provided they did not provide the pilot. I think that they were mis-led (sp). Can anyone shed some light on the subject? I know that there are provisions for a time share and joint ownership and things of this nature but this does not fall into that catagory.
Thanks

We are in the middle of making similiar arrangements as we speak. Yes it can be done, BUT...
It must be done very carefully in order for it to be legal. All in all, it would be best (and much safer) to get a knowlegable aviation attorney involved. It will make it much easier to avoid the many potiential traps if it's not done correctly. There are some resources on the NBAA website (www.nbaa.org) that you can use. Search the airmail archives and do a search on aircraft leases. As a flightcrew member, it's your license on the line - so you definately have a vested interest in making sure it's done correctly. Also, you'll want to bounce it past your insurance company. You'll want their official "okey dokey" as well.

'Sled

 

[proav]

If I remember correctly, 91.23 is applicable to "Large" aircraft. The CE501 weighs less than 12,500 #. I didn't think the lease info under that part would apply to us.
I will go back and read the section in 91.501 pertaining to dry leases. Since I am not employed by the companythat owns the plane and the company that wants to lease it can use any pilot they choose it may work. They will talk with an attorney before anything happens and get the final word then.