Business Travel Reimbursement and FAR 61.113
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Hello, 

I work for a small defense contractor and we have a travel policy that allows for use of our privately owned aircraft for traveling to support our customer (typically, the USAF).  There are a number of internal requirements a pilot must meet in order to do this, which includes having 200 hours, an Instrument Rating, naming the company on our aircraft insurance policy, and a few other things.  We operate under Part 91 and IAW FAR Part 61.113.  For all normal business travel, we are reimbursed at the per diem rate, which includes POV mileage (car or aircraft).  When a private aircraft is used, the lesser of the mileage ($1.26/mi) or the least expensive mode of travel (typically airline) is the amount that can be claimed on an expense report.  As such, we typically claim the cost of an airline ticket, since it is often less than the private aircraft mileage reimbursement rate ($1.26/mi quickly exceeds an airline ticket for anything beyond ~200 miles each way).  This is to comply with the government's Joint Travel Restrictions (JTR), which we are beholden to as part of our contract.  My question is around FAR 61.113 (b) (2) "The aircraft does not carry passengers or property for compensation or hire."  Our company policy restricts all flights using a private aircraft to solo only, due to this sentence in the FAR.  Many of us are former military aircrew and we would like to be able to fly in the same aircraft to our business destinations.  This would prove more cost effective for the government than taking 2 or more of our privately owned airplanes to the same place, and for the same business reasons.  And, although most of us are pilots, not all of us have our own aircraft.  We would like to increase the number of people allowed in the aircraft to at least 2.  The big question is: Would the other person in the aircraft really be considered a "passenger" being carried for "compensation or hire".  I would argue "No" because we are traveling to the same place, for the same business reasons, and only one of the employees will be reimbursed (the one who purchases the fuel, oil, mx, tie downs, etc.).  Same as we would if we drove somewhere in a car and had to pay for fuel, parking, etc.  Nobody is trying to be "compensated" for using our own aircraft, only reimbursed.  We typically go to places that are hundreds of miles from airports with airline service (China Lake NAS, White Sands Missile Range, NM etc.) which means long days of airline travel and driving, if we don't travel via GA aircraft.  So, we are trying to leverage the efficiency of travel that a GA aircraft brings because we can land at small, nearby airports, or even the military bases themselves. All of which, saves the government money. It's a unique question, but I want to get an idea on here before I ask my local FSDO about it.       

Thanks, 
Matt
2 Replies
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Thank you, Ronald!  Your reply was very helpful.  Case closed.  

Matt
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1037 Posts
The answer to your "big question" is "yes", asked and answered by the FAA Chief Counsel some years ago.

https://www.faa.gov/about/office_org/headquarters_offices/agc/practice_areas/regulations/interpretations/data/interps/2009/mangiamele - (2009) legal interpretation.pdf

In addition, there are a number of significant tax issues involved since the IRS does not accept the Federal Government's reimbursement rate as a deductible amount for travel by private aircraft.  You may only deduct the actual cost of the flight.  Any reimbursement above the IRS-allowable amount is considered taxable income.  While it's simple if you're renting the plane (full rental cost is allowable), ask your tax professional for guidance on this issue if you use your own plane, including the records necessary to deduct anything more than the direct cost of the flight (fuel, landing/parking fees, etc), such as a prorated share of fixed costs like insurance, hangar, etc.

Even if you hold a Commercial or ATP, there are other issues arising if the pilot involved uses their own plane with passengers. In that case, the pilot is providing air transportation for hire requiring a commercial operating certificate such as Part 135. The only way you can make this work carrying passengers is to have the company rent the plane and then you act as the company pilot to fly the plane provided by the company.