Transcript:

An interchange agreement is one of the few arrangement allowed by the FAA where a non-commercial operator can provide flights for compensation. In this case, the compensation is in the form of hour-for-hour exchange of flights on another person’s aircraft, plus a potential [true 00:00:24] up amount to account for the difference in cost of operating the two aircraft involved. Aircraft used must be either greater than 12,500-pounds gross takeoff weight for actual planes, or multi-engine jets, or other planes that have qualified under the NBAA small aircraft exemption I’ve discussed in another video. An interchange involves an hour-for-hour swap. Meaning, for example, that trading two hours on a smaller plane for one hour on a larger plane would be prohibited. These exchanges, including the barter value of the traded alloys, are subject to the federal excise tax on air transportation.