I've been helping a few groups with their experimental aircraft builds. One has recently been completed and the builders have allowed me to fly the aircraft now that testing is complete! We have agreed that it would be best to reimburse them for the cost of operating the aircraft when I fly and, at first glance, an hourly rate seems simplest. So…
- What is the best way to legally reimburse them for this cost? Is this “renting”? “Dry-leasing"? Is this considered a commercial operation because of the money changing hands and therefore subject to 100 hour inspections and other commercial requirements (see below)?
- To be covered under their insurance, the underwriters are requiring me to have a set number of hours in the make and model. How can I offset these costs when a builder-pilot/owner is on board? Paying 100% of the rate would be more than pro-rata, right? I'd hate for it to cost them anything for me to be able to fly the aircraft solo! One of the builder pilots is an instructor, is this the better direction?
Thanks in advance for your advice. I'm re-entering the GA world and figured there is someone out there that is far more capable in these areas than myself. Cheers
Basically, all you can pay is the direct operating cost of the flight, I.e., the fuel and oil burned and any airport fees incurred (like landing, parking, or ramp fees), and you must pay those. The owner can't accept anything from you for the use of the plane.
As for instruction, neither of you can give or receive instruction in that plane without FAA Letters of Deviation Authority (LODA) for both the owner and instructor. See the link below for more on that.
My suggestion would be to talk with an aviation attorney on your own or through the PPS program if you are an AOPA member. The answer could by tricky depending on the specific facts as well as the latest policies from the FAA concerning compensation in experimental aircraft. In the meantime, you can check out 14 CFR 91.319 as well as the Advisory Circular on sharing expenses. AC 61-142.