4.1 Costs

Articles 196 to 202 set out seven exceptions to the general rules and these are summarised below, but first there are two important definitions. Direct costs and annual costs are defined in article 3(1) of the Order but in summary:

Direct costs means those costs directly incurred in relation to a flight (e.g. fuel, en-route charges) but excludes any remuneration payable to the pilot.

Annual cost means the cost of keeping, maintaining and operating the aircraft over a period of a year (e.g. hangarage and maintenance).

There must be no element of profit in either direct or annual costs.

4.2 The 7 Exceptions

Exception 1 – Flying displays (article 196)

The exception under this article concerns an aircraft taking part in an aircraft race, contest or flying display or on a positioning flight to enable it carry out such a flight or returning from such a flight. The owner or operator may recover from the organiser of the race, contest or display his direct costs and an appropriate contribution to his annual costs of operating the aircraft. The flight shall be deemed to be a private flight for flight crew licensing purposes.

In addition to any payment to the owner or operator of the aircraft, as above, the pilot is entitled to receive prizes. This means that an aircraft can be flown by a PPL holder since the prizes will be deemed not to be remuneration and the payment of permitted costs will not mean that the flight is for the purpose of aerial work for flight crew licensing purposes.

This exception only affects the appropriate flight crew licence. It does not affect any other requirement of the Order (e.g. airworthiness).

Exception 2 – Charity flights (article 197)

A flight will be deemed to be a private flight for all purposes if the only payment is to a registered charity that is not the operator of the aircraft and the flight is made with the permission of the Governor.

Exception 3 – Cost sharing (article 198)

A flight will be deemed to be a private flight for all purposes if the only payment is a contribution to the direct costs of the flight (not annual costs) otherwise payable by the pilot in command. This is provided that (a) no more than four persons (including the pilot) are carried; (b) the pilot pays at least his proportionate share (e.g. if four persons are carried the pilot must pay at least 25% of the direct costs); and (c) the flight has not been publicised in any way except within the premises of a flying club (in which case all the persons being carried must be members of that club).

There is a further proviso that a pilot cannot take advantage of this exception if he is employed as a pilot by the operator of the aircraft. This is intended to deter flying instructors from abusing the exception by offering quasi-commercial transport flights in aircraft of the flying club for which they work.

Exception 4 – Motor mileage equivalent (article 199)

In the past PPL holders have queried whether they are entitled to recover from their employers the costs of running their own aircraft or hiring an aircraft to fly themselves on business. The argument put is that they would be entitled to travel by train or car and recover their expenses of so travelling and they wish instead to recover some or all of the costs of flying. As the employer has an interest in the employee travelling to a particular location at a particular time, then any payment made by the employer in relation to the flight would be in respect of the flight or the purpose of the flight. Therefore, the flight would be for the purpose of aerial work and outside the privileges of a PPL. Consequentially, an exception has been established permitting a PPL holder to recover the direct costs (but not the annual costs) in such a situation, the flight being deemed private for all purposes.

The article contains a proviso ensuring that on such a flight no one is carried who is under any legal or contractual obligation to be carried, e.g. the boss cannot order members of his staff to travel with a PPL holder but must permit the option of alternative means of transport.

Exception 5 - Group owned aircraft (article 200)

Many aircraft are owned by groups of people. The usual and most sensible way of operating such a group owned aircraft is for all the members of the group to pay into a central fund a contribution related to the number of hours they fly, so as to ensure that the central fund has sufficient money to pay the costs of operating the aircraft over a period of time. Such a contribution is however, in law, equivalent to the payment made by a person hiring an aircraft, e.g. from a flying club, and therefore making a flight commercial air transport for airworthiness purposes, so that the continued airworthiness requirements for commercial air transport aircraft ought to be applied to the group owned aircraft.

An exception has therefore been established so that the aircraft will be exempt from the need to meet the airworthiness requirements for commercial air transport use. This is provided that: (a) payments are made by members of the group to a central fund which amount to no more than direct and annual costs of operating; and (b) the group comprises no more than 20 persons, each with at least a 5% share, whose names have been notified to the Governor. The exception applies whether the aircraft is jointly owned directly by no more than 20 persons or by a company that is owned by no more than 20 shareholders, who must be individuals and not companies.

It should be noted that this exception can only be relied upon if the only payments are those made within the group relating to the direct and annual costs of operating. No other payments can be made, so that, for instance, a group member cannot pay an instructor to train him in a group owned aircraft.

Exception 6 – carriage of persons on aerial work flights (article 201)

An exception is provided in relation to the persons who may be carried in the aircraft on an aerial work flight and on positioning flights immediately before and after the aerial work activity. In addition to members of the crew, no more than 6 persons indispensible to the aerial work activity may be carried in the aircraft1. Where valuable consideration is involved and persons other than those indispensible to the aerial work activity are to be carried, then the exception is not applicable, the rules applicable to commercial air transport apply and an air operator’s certificate is required.

Additional restrictions are applied regarding who may be carried during the conduct of specialised operations, for example when an article, person or animal is suspended from a helicopter. Helicopter hoist operations (HHO) where any person on the hoist is not a crew member must comply with the requirements applicable to commercial air transport operations.

Exception 7 – parachuting (article 202)

Where a person pays to be carried in an aircraft for the purpose of parachuting out of that aircraft then the flight is clearly for the purpose of commercial transport of passengers, regardless of the fact that the passengers will not be expected to be on board the aircraft when it lands. An exception is therefore established so that provided the flight is carried out in accordance with article 131 of the Order (which provides the conditions under which parachuting may be permitted), or the flight is positioning for such a flight or returning from such a flight, then the carriage of the parachutists (and other authorised persons, e.g. a jump master) will not mean the flight is considered to be commercial air transport. The flight will be deemed to be aerial work and must comply with the requirements relating to such operations.

4.3 Applying the exceptions to hired aircraft or jointly owned aircraft

4.3.1 The four exceptions relating to flying displays etc, charity flights, cost sharing and recovery of direct costs (motor mileage) are so defined that they are still available to an aircraft which has been hired, or to a group owned aircraft operated in accordance with the group aircraft exception of Article 200.

4.3.2 The four exceptions provide that flights coming within them will be deemed to be private flights for the purposes of one or more parts of the Order if the only payment in respect of the flight falls within the specified category of payment, e.g. in the case of flying displays the costs of the flight and prize money. However, if an aircraft has been hired then there will be another form of payment in respect of the flight, i.e. the payment for the hire of the aircraft. Similarly, if the aircraft is group owned, there may well be some payment by the group member to the group for the use of the aircraft. Thus two types of payment (group and hire) are discounted when applying the four exceptions ( although if the aircraft is hired it will still need to be maintained as a commercial air transport aircraft).


1 This limitation on the number of persons to be carried is not applicable to aerial work parachuting flights.

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