Commercial Operations: From Confusion to Clarity - Part 119 & 119.1(e)
Intro
- The topic I underestimated the most was Commercial Operations.
- I soon realized that concepts like Private vs. Common Carriage, Wet vs. Dry Leases, Holding Out, and the complex web of regulations—Part 91, 119, 119.1(e), 121, 125, and 135—are deeply interconnected and very confusing.
- I’ve put a lot of effort into unraveling these tangled concepts to truly understand how they fit together.
- In this post, I’m sharing my findings and a simplified Decision Roadmap to help fellow pilots navigate these ‘grey areas’ with clarity.
⚠️ This content is for educational and informational purposes only. It does not constitute legal advice or an official FAA guideline. Always refer to the latest FAR/AIM and official regulations for actual flight operations. The author assumes no liability for errors or omissions in the content.
Case Table
‼️ The table below is the key takeaway from this post ‼️
(Click on the image for a larger view)
Terms & Definitions
- compensation: anything of value received for acting as PIC (not limited to cash)
- Financial Gain: Direct payment (cash, salary).
- Flight Time: Building hours for free while someone else pays for the aircraft.
- Barter & Gifts: Trading services for goods (e.g., free dinner, repairs).
- Intangible Benefits: Business goodwill or professional reputation gain.
- If you are better off (financially or professionally) after the flight, the FAA considers it Compensation.
- hire: air transport is the main business for profit, not incidental
- Pilot for Hire: Selling labor/skills for compensation.
- Aircraft for Hire: Using the aircraft as a revenue-generating vehicle.
- Requires a 100-hour inspection (91.409b) in addition to the Annual.
- An Operator must be identified as legally responsible for the flight.
- Usually requires a Part 119 Certificate (Part 135/121) unless it falls under Part 119.1(e) exceptions.
- holding out: an expression of willingness to the general public to provide air transportation for compensation.
- common carriage: a commercial flight operation that involves holding out to the general public, where the carrier serves anyone willing to pay.
- private carriage: a commercial operation where the carrier provides services to a limited number of selected clients through private contracts. They may hold out their aircraft management or operational services, but they do not hold out air transportation to the general public.
- air carrier certificate: a certificate required for operators conducting common carriage (e.g., Part 121 airlines or Part 135 on-demand air taxis).
- operating certificate: a certificate required for operators conducting private carriage for compensation or hire (e.g., Part 125 or Part 135 management companies).
- dry lease: a leasing arrangement where only the aircraft is provided without a crew; the lessee has operational control and acts as the operator.
- wet lease: a leasing arrangement where both the aircraft and at least one crew member are provided; the lessor typically retains operational control and acts as the operator.
- operational control: the authority to initiate, conduct, and terminate a flight.
- operator: the person or entity who is legally responsible for the safe conduct of the flight and exercises operational control.
- 14 CFR
- part 119: Regulation that determines who must obtain a certificate and which operating rules (Part 121, 125, or 135) apply.
- part 119.1(e): List of commercial operations (such as student instruction, crop dusting, and banner towing) that are exempt from commercial certification and allowed to operate under Part 91.
- part 91: General operating and flight rules (basic rules for all aircraft). It covers non-commercial flights, corporate private operations, and the specialized operations listed in 119.1(e).
- part 121/135: Regulations for commercial operators conducting Common or Private Carriage for compensation or hire.
- part 125: Special regulations for the private operation of large aircraft (20+ seats or 6,000 lbs+ payload) that do not involve common carriage.
Key Takeaways
- Purpose of the certificate:
- The purpose of the certificate is to strictly manage the operator who carries the general public or others for compensation.
- Private operation is not a commercial activity (carriage). Since the aircraft is used for own business or personal purposes, it is sufficient to just follow Part 91 flight rules without the need for a separate certificate.
- Things possible without a certificate (air carrier / operating):
- Pilot skill can be provided. Providing only pilot labor is ‘employment’, not an ‘air transportation service’. Operational control remains with the aircraft owner, not the pilot.
- Aircraft can be provided (dry lease). The lessee becomes the operator. Part (91/135/ 121/125) applies depends on how the lessee uses the aircraft.
- ↔ Providing both pilot skill + aircraft together → Certificate (air carrier / operating) is required.
- Air carrier certificate vs Operating certificate
- The criteria for distinguishing air carrier cert. and operating cert. is the status of common carriage (to the general public).
- Simply put, it depends on what you are selling: are you selling individual tickets to the public (common), or are you signing private management deals with specific clients (private)?
- Carriage vs non-carriage
- The key to determining whether it is carriage or not is the lease type (dry/wet), which means “who has operational control”.
- dry lease: The lessee has control → non-carriage (Part 91 possible).
- wet lease: The lessor/contractor has control → carriage (Part 135/125/121).
- Private carriage vs Common carriage
- The difference between private and common carriage might look like it’s just about ‘holding out’, but the real deciding factor is the nature of your client—whether you serve the general public or a few selected clients.
- That is, even in private carriage, one can hold out when providing aircraft management services.
- However, your actual contracts and services must never be with the general public.
- Common carriage always requires an air carrier certificate.
General Decision Flow
- Is it for compensation or hire?
- Does the pilot receive anything of value (financial gain, flight time, etc.)?
- Does it fall under Part 119.1(e)?
- If yes, holding out and compensation are allowed under Part 91 without a commercial certificate.
- Carriage or non-carriage?
- Key factor: Operational Control (Wet vs. Dry lease).
- Is it point-to-point transportation of persons or property?
- If the operator provides both pilot & aircraft (Wet lease), it is Carriage.
- Private or common?
- Key Factors: Holding out & Target of the contract (Client).
- Is there any holding out involved?
- Is it for a specific client, or is it open to the public?
- Is the flight incidental to the business?
- Is it a Large Aircraft? (20 or more passenger seats, or a payload capacity of 6,000 lbs or more?)
Case Table
‼️ The table below is the key takeaway from this post ‼️
(Click on the image for a larger view)
