Exclusive Use: Second Verse, Same as the First

The FAA has issued a new letter of legal interpretation to Scott Williams (July 19, 2013) regarding §135.25(b) which requires a Part 135 operator to “have the exclusive use of at least one aircraft that meets the requirements for at least one kind of operation authorized in the certificate holder’s operations specifications… However, this paragraph does not prohibit the operator from using or authorizing the use of the aircraft for other than operations under this part and does not require the certificate holder to have exclusive use of all aircraft that the certificate holder uses.”

Also relevant to this discussion §135.25(c), which states, “For the purposes of paragraph (b) of this section, a person has exclusive use of an aircraft if that person has the sole possession, control, and use of it for flight, as owner, or has a written agreement (including arrangements for performing required maintenance), in effect when the aircraft is operated, giving the person that possession, control, and use for at least 6 consecutive months.”

To call it a “new” interpretation is a bit of a stretch. The individual requesting the legal interpretation essentially asked if the aircraft designated as the air carrier’s “exclusive use” aircraft could be used by the aircraft owner, who happens to be a pilot, or another appropriately rated pilot approved by the certificate holder to conduct Part 91 flights on occasion. The FAA determined this scenario does not fit with the exclusive use requirements of §135.25(b), which requires the certificate holder to maintain possession and control of the aircraft. Note that §135.25(b) allows the certificate holder and only the certificate holder to use the aircraft for “other than operations under this part,” which includes Part 91.

A 2012 legal interpretation to Francis DeJoseph (June 25, 2012) asked for clarification on another exclusive use issue, asking whether an aircraft that is being used by two different Part 135 certificate holders can satisfy the exclusive use requirement of §135.25(b). The FAA determined then that any aircraft being used by two different Part 135 operators cannot be used by either or both air carriers to satisfy the exclusive use requirement.

These interpretations are in line with previous FAA decisions. In 1990 the FAA said the term “exclusive use” means the “sole possession, control, and use of the ‘exclusive use’ aircraft.” (Not to be confused with the IRS term of “possession, command, and control” which is used to determine which tax structure applies. No need for federal agencies to be consistent. It’s more interesting this way.) The FAA determined the scenario presented in this inquiry would remove the possession and control of the exclusive use aircraft from the certificate holder and hand it over to the aircraft owner. The letter of interpretation said, “To allow any other person or entity to use the aircraft would render the definition of ‘exclusive use’ in §135.25(c) meaningless.”

Based on the regulations and previous interpretations, the Williams interpretation shouldn’t really be a surprise. So why is this new letter of interpretation even worthy of this short blog post? Our industry’s desire to rehash this question every year or two tells me one of two things is happening:  Either some operators are still screwing up the exclusive use requirements of §135.25(b) OR some operators out there are considering implementing “new” and creative means in an attempt to meet the exclusive use requirements. The exclusive use requirement can be a real hassle for most Part 135 certificate holders that do not own an aircraft and have to use a managed aircraft to satisfy exclusive use requirements. In general, it seems if you have to ask the FAA the question the answer will be “no”. At this point, I think the FAA has addressed every possible reasonable nuance of exclusive use but I anxiously await the next request for interpretation on this issue, because it’s bound to be the Fantasia of interpretation requests – at the same time strange, imaginative, ahead of its time… And definitely entertaining.

Incidentally, have we as an industry come to terms with the “for at least 6 consecutive months” of §135.25(c)? It has been argued (incorrectly and ineffectively) that this is a certification requirement. That is, the certificate holder must have exclusive use of an aircraft for the first 6 consecutive months of certification but not on a continual basis after that. Clearly that’s not the FAA’s intent. The exclusive use requirement is an ongoing requirement with the intent of preventing a certificate holder from having a certificate but not having the use of any aircraft.

There are many nuances to the exclusive use requirement. It’s unlikely anyone will identify a wildly creative way around this requirement but if you try, make it good. I’m waiting for the next verse!

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