Appendix Examples and possible scenarios
Q. An employee of an AOC holder borrows one of the company’s aircraft to fly himself to his home. Is the flight a commercial air transport flight?
A. The aircraft is operated by an air transport undertaking (AOC holder) and must therefore meet all of the requirements of the Order associated with an aircraft used for the purposes of commercial air transport; for example in relation to maintenance and equipment. However, if the only person on board the aircraft is the pilot then there are no passengers and consequently the flight itself is not a commercial air transport flight.
Q. Taking the above case but this time the pilot offers to take a few of his friends with him on the flight. Is the flight a commercial air transport flight?
A. Unlike in the previous case, this time there are passengers on board the aircraft. Consequently, the flight will be deemed to be a commercial air transport flight regardless of whether or not the passengers have paid for the privilege of being carried. That is because the aircraft is operated by an air transport undertaking and under article 195(1)(b) gratuitous carriage by such an undertaking is deemed to be commercial air transport. The only exception would be if the passengers were themselves employees of the company or authorised persons carrying out an inspection or test.
Q. The owner of an aircraft makes it available for operation from Monday to Friday by an AOC holder and then takes it back for the weekend for his own private use. Does the private use constitute commercial air transport?
A. The answer in this case is likely to be the same as in the two previous examples: for the purposes of the Order, the aircraft is operated by an air transport undertaking, as the AOC holder is responsible for meeting the requirements of the Order associated with a commercial air transport aircraft.
In all three of these examples, the user of the aircraft on the flights in question does not become the “operator” by virtue of the definition of operator contained in article 3(4)(b) referred to in 5 above, namely that “when a person other than an air transport undertaking has chartered, hired, leased or borrowed the aircraft for a period not exceeding 14 days he shall not be considered to be the operator” .
Q. The owner/operator of a private aircraft offers to take a number of friends on his aircraft for a flight to another island. The friends make no payment nor offer any valuable consideration of any kind. Is the flight a commercial air transport flight?
A. So long as no valuable consideration is given or promised then the flight will be a private flight.
Q. In a similar situation to the last one, the owner agrees to carry three friends on his private aircraft provided that each of them pays one quarter of the direct cost of the flight. Is the flight a commercial air transport flight?
A. Under the terms of article 198 the flight will be deemed to be a private flight. However, if the passengers pay a third of the direct cost each, and the pilot pays nothing, then the flight would not fall within the exception in article 198. Equally if there were more than 3 passengers then article 198 would not apply; nor would it apply if the contributions made by the passengers were not related to the direct cost of the flight, i.e. they were just arbitrary amounts. In each of the last three cases the flight would be deemed to be a commercial air transport flight.
Q. The owner/operator of a private aircraft agrees to make the aircraft available to a group of friends to enable them to fly to the Monaco Grand Prix: the aircraft is to be flown by paid pilots. No valuable consideration of any kind is to be given by the passengers for the privilege of being carried. Is the flight a commercial air transport flight?
A. Provided that no valuable consideration is given or promised by the passengers for the purpose of being carried, then the flight would be a private flight, even though the owner/operator was not being carried on that flight. However, if the passengers would not in fact be carried unless they made payment of an agreed amount then the flight would become a commercial air transport flight.
Q. The owner/operator of a private aircraft agrees to make it available to a friend in return for that friend agreeing to let him use his yacht in Monte Carlo. No money changes hands. Is the flight a commercial air transport flight?
A. This scenario is much more complex. It can be argued that if the arrangements agreed are purely informal and not intended to create any legal obligation on either side then the flight should be considered as private as no valuable consideration has been given or promised. This is likely to be the case, for example, if the arrangement is a one-off arrangement.
However, if the arrangement is an on-going one such that the parties consider it to be of a business nature or to have a commercial value then it can reasonably be inferred that the use of the yacht constitutes valuable consideration and the flight becomes a commercial air transport flight.
Q. The owner/operator of a private aircraft (who may also be a resort operator) sets up a “Members or Residents Club” to which the members pay a fixed subscription in return for which they become entitled to the use of the owner’s aircraft. The owner argues that the sums paid by the members do not constitute valuable consideration given or promised for the carriage of passengers or cargo in the aircraft on that flight under article 195(1)(a) but are subscriptions paid to become members of a club. Are any flights, undertaken for the carriage of such members, commercial air transport flights?
A. This again is a complex situation. The argument by the owner is to the effect that the valuable consideration has not been given directly by the member for carriage on that aircraft on that flight and therefore does not fall within the scope of article 195(1)(a). The argument put by the owner is in essence that the article must be interpreted restrictively; that it must be demonstrated that the payment made is directly referable to carriage of passengers or cargo on that flight.
The argument advanced above can be countered by reference to the whole of article 195(1). It should be noted that article 195(1) defines (or deems) “commercial air transport” with reference to an aircraft “in flight” and references to “on that flight” in sub-paragraph (a) must be interpreted in that light.
Article 195(1) does not say that the valuable consideration given or promised must be “directly” or “solely” for the carriage of passengers or cargo. There is nothing in the ordinary and natural reading of article 195(1) that requires such a restriction to be read into it. What is required is that the carriage of passengers or cargo is pursuant to the valuable consideration having been given or promised. The question to be asked is, “would the member be carried on the aircraft if he had not paid his subscription?” The answer is likely to be, “No”.
It is considered that, therefore, such flights that are undertaken in the circumstances outlined are for the purposes of commercial air transport and the operator should be in possession of an AOC.
Q. A resort owner operates a private aircraft that he uses to ferry paying guests to and from his resort. He does not charge the guests directly for the flights. He also uses the aircraft to conduct sightseeing flights for his guests at no additional charge. Are these flights commercial air transport flights?
A. It is likely that such flights would be deemed commercial air transport flights. In paying to stay at the resort the guest is entitled to conclude that the flights are part of the “package” and that, therefore, part of the price paid is in consideration of the right to be carried, whether on the ferry flights or on sightseeing flights.
Whilst the point has not been tested in the courts in the UK in relation to aircraft flights, it has been tested in relation to public service road vehicles. The case of Rout v Swallow Hotels Ltd  RTR 80 concerned a prosecution for contravention of the Public Passenger and Vehicles Act 1981.
The facts were that a hotel proprietor operated a coach and a minibus to convey persons using the hotel and their friends. No one had the right to travel on the vehicles and no direct payment was made for their use. The hotel manager had complete discretion as to whether the vehicles ran and as to their destinations. The hotel did not hold a certificate for the vehicles as was required under the applicable law. The issue before the Divisional Court was whether the vehicles were being used “for carrying passengers for hire and reward”. The Court held that they were.
In that case the Judge held that there does not have to be a clear connection between the payments made and the carriage of the passenger for the vehicle to be “used for carrying passengers for hire and reward” . It is sufficient that the operator provided the vehicle in the course of his business; persons were carried on it and the operator was remunerated for doing so out of the payments made by its guests.
Q. A resort developer operates its own private category aircraft for the carriage of its employees and for the purpose of bringing to the resort potential purchasers of property. Are the flights conducted for the carriage of potential purchasers commercial air transport flights?
A. Provided that no payment has been given or promised in connection with the visits or in respect of the flights (other than payment for the services of the pilot) such flights would probably not be considered to be commercial air transport.