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What is the FAA flight company department rule?



One of the FAA’s greatest concerns in general aviation is arrangements where one party provides air transportation to another. A so-called flight department company exists when somebody establishes a company for the purpose of operating an aircraft not in furtherance of its own non-air transportation business, but instead to transport others, usually meaning the company’s owners or affiliated companies. From the FAA’s perspective that company would be acting as a commercial air carrier, which means it would need to be licensed as one. Lawyers unfamiliar with aviation often suggest structures like these hoping to confine liability for any aircraft accident to that single-purpose company, which is misguided. Flight department companies do not solve problems. They create them by establishing what the FAA considers unlawful charter operations.

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