[Federal Register Volume 81, Number 50 (Tuesday, March 15, 2016)]
[Rules and Regulations]
[Pages 13719-13721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05833]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Chapter I

[Docket No. FAA-2015-2022]


Petition of the Aircraft Owner and Pilots Association (AOPA) To 
Amend FAA Policy Concerning Flying Club Operations at Federally 
Obligated Airports

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final policy.

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SUMMARY: The policy statement clarifies the FAA's policy interpretation 
regarding the operation of flying clubs at federally-obligated 
airports. Specifically, this policy statement amends FAA Order 5190.6B, 
Airport Compliance Requirements, Section 10.6 Flying Clubs to allow the 
clubs to compensate instructors and mechanics who are club members for 
services rendered to the Club. This policy statement also amends the 
FAA's definition of flying clubs.

DATES: This action becomes effective April 4, 2016.

FOR FURTHER INFORMATION CONTACT: Miguel Vasconcelos, Airport Compliance 
Division, ACO-100, Federal Aviation Administration, 800 Independence 
Avenue SW., Washington, DC 20591, telephone (202) 267-3085; facsimile: 
(202) 267-4620.

SUPPLEMENTARY INFORMATION:

Introduction and Background

    On April 3, 2015, the Aircraft Owners and Pilots Association (AOPA) 
Senior Vice President for Government Affairs & Advocacy wrote to the 
FAA's Director of the Office of Airport Compliance and Management 
Analysis proposing revisions to FAA's current policy regarding 
compensation for flight instructors and persons maintaining aircraft 
within the context of flying club operations. AOPA stated in its letter 
that it sought ``to help current flying clubs and airport sponsors 
comply with the FAA guidance outlined in 5190.6B, and to provide future 
flying clubs the opportunity to strengthen and unify general aviation 
pilots.'' AOPA said that its goal is ``to provide guidance that is 
attainable and ensures educated compliance from all airport users,'' 
and asked for ``updated guidance regarding compensation for flight 
instructors and maintainers'' because ``flight instructors and aviation 
mechanics are valuable assets to the aviation industry, and should be 
granted the privilege of fair compensation for their efforts on a local 
level.''
    AOPA proposes clubs be permitted to compensate member flight 
instructors and member mechanics for services rendered to the club or 
club members. Such compensation, AOPA suggests, should be monetary or 
in the form of credit against payment of dues or flight time.
    The FAA requested comments on whether AOPA's recommendations are 
consistent with the FAA's general policies regarding commercial 
aeronautical services and on-airport flying clubs, and if so, whether 
the stated agency policy on flying clubs should be revised to amend its 
definition of flying clubs. In particular, the FAA sought comments from 
commercial service providers that engage in flight training and 
aircraft rental, from associations representing such service providers, 
and other interested parties. Public comments were received and 
considered, and changes to the existing policy were adopted.

I. Current Policy

    FAA Order 5190.6B, FAA Airport Compliance Manual (Order), paragraph 
10(6)(a), published on September 30, 2009, defines a flying club as: 
``a nonprofit or not-for-profit entity (e.g., corporation, association, 
or partnership) organized for the express purpose of providing its 
members with aircraft for their personal use and enjoyment only.'' The 
Order states that,

the ownership of the club aircraft must be vested in the name of the 
flying club or owned by all its members. The property rights of the 
members of the club shall be equal; no part of the net earnings of 
the club will inure to the benefit of any individual in any form, 
including salaries, bonuses, etc. The flying club may not derive 
greater revenue from the use of its aircraft than the amount needed 
for the operation, maintenance, and replacement of its aircraft. FAA 
Order 5190.6B at para. 10(6)(b).

    The Order also notes that ``flying clubs may not offer or conduct . 
. . aircraft rental operations. They may conduct aircraft flight 
instruction for regular members only, and only members of the flying 
club may operate the aircraft.'' FAA Order 5190.6B at para. 10.6(c)(1). 
The Order also states that ``no flying club shall permit its aircraft 
to be used for flight instruction for any person, including members of 
the club owning the aircraft, when such person pays or becomes 
obligated to pay for such instruction. FAA Order 5190.6B at para. 
10.6(c)(3). An exception applies when the instruction is given by a 
lessee based on the airport who provides flight training and the person 
receiving the training is a member of the flying club. Id. Flight 
instructors who are also club members may not receive payment for 
instruction except that they may be compensated by credit against 
payment of dues or flight time'' and that ``any qualified mechanic who 
is a registered member and part owner of the aircraft owned and 
operated by a flying club may perform maintenance work on aircraft 
owned by the club. The flying club may not become obligated to pay for 
such maintenance work except that such mechanics may be compensated by 
credit against payment of dues or flight time.'' Flying clubs are 
defined in such a way as to differentiate from for-profit aeronautical 
businesses offering aeronautical services to general public, e.g., 
FBOs, flight schools and aircraft rental providers.

[[Page 13720]]

    The owner of any federally-obligated airport (airport sponsor) is 
required by the sponsor grant assurances to operate that airport for 
the use and benefit of the public and to make that airport available to 
all types, kinds, and classes of aeronautical activity on fair and 
reasonable terms, without unjust discrimination.

II. AOPA Proposal

    AOPA states that its recommendations are designed to promote flying 
clubs by allowing flight instructors and mechanics who are club members 
to receive monetary compensation for services conducted for other club 
members or club aircraft:

AOPA Policy Proposal Item 1

    ``No flying club shall permit its aircraft to be used for flight 
instruction for any person, including members of the club owning the 
aircraft, when such person pays or becomes obligated to pay for such 
instruction except in the following circumstances; (a) The flight 
instruction is provided to a club member by a commercial operator 
authorized by the airport sponsor to provide flight instruction on 
field. (b) The flight instruction is provided to a club member by a 
flight instructor who is also a club member that is in good 
standings according to the club bylaws. In either case, the flight 
instructor may receive monetary compensation; however the flying 
club is prohibited from holding itself out to the public as a fixed 
based operator, a specialized aviation service operation, or a 
flight school. In the case of (b) above, the Airport Sponsor has the 
right to limit flight instruction for monetary compensation but must 
permit the club to compensate club instructors with credit against 
payment of dues or flight time.''

AOPA Policy Proposal Item 2

    ``Any qualified mechanic who is a member of the flying club may 
perform maintenance work on aircraft owned or exclusively used by 
the flying club. The flying club may not become obligated to pay for 
such maintenance work except that such mechanics may be compensated 
not to exceed a reasonable rate for the work performed at the 
discretion of club members. The club however may not hold out to the 
public as operating as a fixed base operator, a specialized aviation 
service operation, or maintenance facility. The Airport Sponsor has 
the right to limit maintenance work for monetary compensation but 
must permit the club to compensate club mechanics with credit 
against payment of dues or flight time.''

III. Comments Received

    The FAA received comments from 44 airport users including flight 
instructors, pilots and flying club members. Thirty-seven of the 
airport users were flying club members who submitted a letter 
identifying themselves as ``Flying Club Participants at Air Venture 
2015''. The remaining seven airport users submitted individual 
comments. Two industry groups submitted comments: Flight School 
Association of North America (FSANA) and National Air Transportation 
Association of North America (NATA). FSANA is a membership-based 
association representing flight schools and firms involved in flight 
training. NATA is an organization representing the interest of aviation 
businesses such as aircraft fueling, maintenance, parts sales, storage, 
rental, airline servicing, flight training, Part 135 on-demand air 
charter, and fractional aircraft program management.
    Forty-three airport users offered support of both AOPA Policy 
Proposals: An individual commenter believes that the policy change 
would provide an incentive for pilots who belong to flying clubs to 
remain current and continue their education in a convenient, cost-
effective, and familiar environment. Another commenter indicated that 
small airports rely on flying clubs because there is not enough 
business activity to support a flight school. This commenter is an 
inactive pilot because there is no aircraft rental or flight training 
available at the airport. However, the club at a local airport has 
several certificated flight instructors (CFI). Many CFIs have full time 
jobs and are not interested in donating their evenings and weekends 
without compensation. The president of a nonprofit flying club at 
Skyhaven Airport in Rochester, New Hampshire, indicates that the 
airport does not have a flight school. None of the club members can 
receive proficiency checkouts or additional training in club aircraft 
without violating the airport's policy. There are several CFIs in the 
community that would join the club if they could be compensated.
    Supporters of the AOPA proposal believe the proposed policy change 
would (1) provide enhanced opportunities for students to fulfill their 
educational needs in surroundings they find appealing and accessible; 
(2) provide incentive for pilots who are members of flying clubs to 
remain current; and (3) create additional opportunities and incentives 
for certificated flight instructors to actively participate in flying 
clubs.
    A commenter is opposed to a change in policy. He believes it will 
weaken ``for profit'' flight schools which have suffered financially 
for the past eight years.
    FSANA believes that flying clubs can be a positive asset to the 
community. FSANA recognizes that flying clubs that are not for profit 
have a business advantage over for profit flight schools. They also 
believe a flying club should not be classified as a commercial 
operator. FSANA supports compensation for certificated flight 
instructors and mechanics as long as flying clubs serve the needs of 
their members and not promote their services to the general public and 
do not compete with commercial operators. FSANA encouraged the FAA to 
create awareness and enforce transparency for the flying club community 
and airport sponsors to ensure that flying clubs do not compete with 
commercial operators and promote themselves to the general public.
    NATA recognizes AOPA's initiative is intended to increase public 
interest in flying by strengthening flying clubs. Of concern to NATA 
are those entities that classify themselves as flying clubs but are 
commercial aviation businesses thus avoiding compliance with an airport 
sponsor's minimum standards. NATA asserts that flying clubs that offer 
their services to the general public should not be able to enjoy the 
protection of a non-profit flying club to avoid complying with an 
airport's minimum standards. NATA does not object to either of AOPA's 
proposals but recommends that CFIs and mechanics receive either (1) 
monetary compensation or (2) discounted/waived regular club member dues 
or flying time, but not both. NATA believes that without such a 
restriction, outside instructors or mechanics could receive waived dues 
and monetary compensation for performing work without ever having 
invested in the club as would a bona-fide member. NATA suggests that 
the policy change with these limitations will be beneficial and will 
create a more level playing field.
    FSANA and NATA suggest that any clarification of the policy should 
emphasize that (1) flying clubs should at no time hold themselves out 
as fixed based operators, flight schools, or as businesses at which 
people can learn to fly; and (2) CFIs and mechanics should be permitted 
to receive monetary compensation as long as flying clubs of which they 
are members meet adequate criteria, which may include the airport 
sponsor's authorization and/or sponsor-imposed conditions. FSANA and 
NATA also recommended that flying clubs must not indicate in any form 
of marketing and/or communications that they are a flight school, and 
flying clubs must not indicate in any form of marketing and/or 
communications that they are a business where people can learn to fly.

IV. Final Policy Changes

    FAA's primary concern is that flying clubs operating at federally-
obligated

[[Page 13721]]

airports must conform to the FAA definition found in FAA Order 5190.6B, 
paragraph 10.6. As stated, the Order defines ``a flying club as a 
nonprofit or not-for-profit entity (e.g., corporation, association, or 
partnership) organized for the express purpose of providing its members 
with aircraft for their personal use and enjoyment only.'' In addition, 
the ownership of the club aircraft must be vested in the name of the 
flying club or owned by all its members, the property rights of the 
members of the club shall be equal and no part of the net earnings of 
the club will inure to the benefit of any individual in any form, 
including salaries, bonuses, etc. These flying clubs can be 
distinguished from commercial service providers that use the term 
``flying club'' to describe their operation in order to avoid having to 
comply with the airport's minimum standards for commercial service 
providers Those ``flying clubs'' do not conform to the FAA definition 
and put other commercial aeronautical service providers at an economic 
disadvantage. Generally, they hold themselves out to the public as 
alternatives to traditional flight schools and aircraft rental 
providers, and charge only nominal annual ``club fees.''
    FAA policy will emphasize three points: (1) Flying clubs should at 
no time hold themselves out as fixed based operators, flight schools, 
or as businesses offering services to the general public; and (2) CFIs 
and mechanics should be permitted to receive either monetary 
compensation or discounted/waived regular club member dues but not 
both; (3) flying clubs must not indicate, in any form of marketing and/
or communications, that they are a flight school and flying clubs must 
not indicate in any form of marketing and/or communications that they 
are a business where people can learn to fly. FAA agrees with NATA that 
flight instructors and mechanics should be bona-fide club members 
paying dues as a condition to receiving compensation for services or a 
bona-fide member receiving a discount or waiver of dues with no 
compensation. To offer both compensation and discounted/waived dues may 
result in abuse and the use of outside instructors and mechanics who 
have no investment of time or commitment to the club. Additionally, FAA 
agrees with NATA and FSANA that flying clubs must distinguish 
themselves from other aeronautical service providers.
    FAA expects that sponsors of federally-obligated airports will take 
appropriate action to ensure that commercial operators and flying clubs 
are properly classified, and the sponsor's actions are consistent with 
its grant assurances, specifically Grant Assurance 22, Economic 
Nondiscrimination.
    FAA's policy regarding flying clubs is amended by revising FAA 
Order 5190.6B paragraphs 10.6(c)(3) and (4) and by adding paragraphs 
10.6 (c)(8) and (9):
    b. General The ownership of the club aircraft must be vested in the 
name of the flying club or owned by all its members. The property 
rights of the members of the club shall be equal; no part of the net 
earnings of the club will inure to the benefit of any individual in any 
form, including salaries, bonuses, etc. The flying club may not derive 
greater revenue from the use of its aircraft than the amount needed for 
the operation, maintenance and replacement of its aircraft.
    (c)(3). A flying club may permit its aircraft to be used for flight 
instruction in a club-owned aircraft as long as both the instructor 
providing instruction and person receiving instruction are members of 
the club owning the aircraft, or when the instruction is given by a 
lessee based on the airport who provides flight training and the person 
receiving the training is a member of the flying club. In either 
circumstance, a flight instructor may receive monetary compensation for 
instruction or may be compensated by credit against payment of dues or 
flight time; however that individual may not receive both compensation 
and waived or discounted dues or flight time concurrently. The airport 
sponsor may set limits on the amount of instruction that may be 
performed for compensation.
    (c)(4). A qualified mechanic who is a registered member and part 
owner of the aircraft owned and operated by a flying club may perform 
maintenance work on aircraft owned by the club. The mechanic may 
receive monetary compensation for such maintenance work or may be 
compensated by credit against payment of dues or flight time; however 
that individual may not receive both compensation and waived or 
discounted dues or flight time concurrently. The airport sponsor may 
set limits on the amount of maintenance that may be performed for 
compensation.
    (c)(8). Flying Clubs may not hold themselves out to the public as 
fixed based operators, a specialized aviation service operation, 
maintenance facility or a flight school and are prohibited from 
advertisements as such or be required to comply with the appropriate 
airport minimum standards.
    (c)(9). Flying Clubs may not indicate in any form of marketing and/
or communications that they are a flight school, and Flying Clubs must 
not indicate in any form of marketing and/or communications that they 
are a business where people can learn to fly.

    Issued in Washington, DC, on March 9, 2016.
Byron Huffman,
Acting Director, Office of Airport Compliance and Management Analysis.
[FR Doc. 2016-05833 Filed 3-14-16; 8:45 am]
BILLING CODE 4910-13-P