飞行员操作飞行手册Pilot Operational Flying Manual

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the proper wording was available for

aviation.

Actually, the imposition of Public

Transport conditions is only

permitted by the enabling Act (of the

ANO) where the aircraft is used for

a commercial, industrial or gainful

purpose (specifically Sect 60 (3) (f)).

What it says is that:

"An Air Navigation Order may

contain provision as to the conditions

under which passengers and goods may

be carried by air and under which

aircraft may be used for other

commercial, industrial or gainful

purposes".

284 Operational Flying

Quite a mouthful, but the use of the

word "other" in conjunction with

the Rules of Interpretation of Statute

infers that "conditions" may only be

imposed when aircraft are being

used for gainful, etc. purposes

(notice the absence of the words

"valuable consideration"). As these

rules are meant to be enforceable by

criminal proceedings, they become

penal situations, and as such must be

strictly construed in accordance with

the enabling statute.

So what may be relevant as to what

is or is not Commercial Air

Transport is not the presence of any

consideration, but, if there is,

whether the aircraft is being used for

a commercial, industrial or gainful

purpose. Therefore, all you really

have to do is pin down who the user

is and see what his use of the aircraft

is to see whether Commercial Air

Transport or Aerial Work conditions

might apply.

Since, in most circumstances, light

aircraft are chartered to a sole user,

most "charter" flights could in fact

be called private flights (if not for

the ANO) unless the aircraft is being

used during flight for commercial,

industrial or gainful purposes.

The user (that is, the hirer) is using

the aircraft for his own purposes

(unless buying and selling is going on

in the back) and the "operator" is the

pilot. Whoever hires out the aircraft

to the user could be held to be their

agent in respect of maintenance and

all the other things needed to keep

the aircraft flying. If passengers are

being carried for separate fares, on

the other hand, then the aircraft is

being used in that way by the person

with the right to the money.

But beware! The terms of an AOC

could be enforceable if made as the

terms of an Air Transport Licence.

If an aircraft is being used for the

carriage for reward of passengers or

cargo, the CAA may apply air

transport licensing even if the

aircraft is not being used for

anything resembling Commercial Air

Transport or commercial or other

gainful purposes.

All that being said, what about the

situation where you're asked to do a

job and you're not sure what's going

on? Do you feel up to actually asking

for a certificate to say a flight is not

Commercial Air Transport? This is

plainly impractical, so you need to

know a few ins and outs to protect

yourself (please note the intention is

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not to enable you to fly illegally!).

A workable CAT flight (ANO

definition) must have the following:

· An Air Operator's Certificate

issued to "the operator"

· The crew must have current

licences (e.g. CPL/ATPL) and

be type rated, base/line

checked, etc. in accordance with

the operator's Operations

Manual (indeed, the whole flight

must be conducted under it).

· The aircraft must have a

(current) Transport Category C

of A, Certificates of

Maintenance Review and

Release to Service, Technical

Log (with Deferred Defect

Sheet), Passenger Briefing

Leaflets and all legally required

equipment (Fire extinguishers,

placards, etc.).

You may be able to get around these

requirements by ensuring that the

Legal Stuff 285

person hiring the aircraft does so

with a separate contract than the one

he hires you with, and you'll be

better off if you can also prove that

you weren't paid, or at least you were

an employee of the hirer's organisation (if you do this, you may have

to show that the enabling Act only

permits an Air Navigation Order to

make different pilot licensing

provisions according to whether the

person concerned is actually

employed or merely engaged in a

flight crew capacity). You could also

get base and line checked by a

proper company and put it through

their books, but don't forget you

must use their Ops Manual and

other documentation.

Finally, you could resort to drastic

measures and form a company for a

short time with nothing in its

memorandum and articles of

association about gainful use of

aircraft or hiring out by the hour.

There is a Common Law rule that

you cannot buy or hire from

yourself—this is the basis upon

which co-ownership groups and

non-profit members clubs are run in

every walk of life. However, the

ANO says that any agreement

between any such organisations, or

members of them (this also means

within the same group), in respect of

a situation where valuable

consideration would normally be

expected, would be considered as if

it had been given anyway. This is

notwithstanding any rule of law as to

such transactions; in other words,

the Common Law purports to be

specifically overridden, yet it is not

clear from the enabling Act that the

ANO is permitted to do this, that is,

put Common Law into abeyance.

An unincorporated non-profit

members' club can be created for a

specific purpose or occasion and

exist for one flight or a day only,

being dissolved once it has served its

purpose. They should pay for their

own operating costs to avoid the

inference of valuable consideration.

For instance, it should not be too

difficult for a group of parachutists

to form a club for the day for the

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purposes of hiring an aircraft.

However, the paperwork must be

sound and, as I said, these are drastic

measures, so get legal advice here.

Legally, there's nothing to stop you

(as a pilot) obtaining your own Air

Transport Licence or AOC should

you feel the need.

International Air Law

The idea is to reduce the possibility

of a phenomenon known as conflict of

laws, and the resulting confusion that

could arise where, say, a claim for

damages is brought in a French

court for injury to a Dane travelling

on a ticket bought in Holland for a

journey from Germany to England

on an Italian plane.

International Law (Public or Private)

consists of internationally agreed

rules that courts of participating

states apply to cases with a foreign

connection, the private side of things

affecting individuals and the public

side affecting states. Public

International Law takes precedence

over Private, which in turn is

superior to State law, although (short

of war) International Law is

unenforceable where the original

consent disappears.

Air Law has mainly evolved through

agreements between "high

286 Operational Flying

contracting parties", through various

International Conventions or

Treaties, too numerous to mention

here. These form the basis of Public

International Law which in turn can

be incorporated into the law of

individual states, an example being

the UK Carriage by Air Act 1961 in

relation to the Chicago Convention

of 1944 (in fact, the Chicago

Convention and its annexes are also

embodied into Section 60 (2)(a) of

the Civil Aviation Act, 1982).

A Convention is an agreement that

many nations are at liberty to enter

into and the word Treaty is used to

indicate agreements between two (or

more) States that bind only

themselves. The Tokyo Convention

1963, for instance, relates to

offences committed on board

aircraft (but not to offences

committed by aircraft, as such).

Thus, Conventions can cover many

subjects, including the agreement of

standards for navigational equipment

and documentation, but they can

also establish governing bodies, such

as the International Civil Aviation

Organisation (ICAO).

ICAO is a worldwide body

convened by governments while the

International Air Transport Association

(IATA) is an equivalent body

established by the airlines. Although

IATA is a private organisation

comprising of virtually all the

scheduled airlines of the world, it

nevertheless has strong links with

ICAO and governments, and is

often used by many airlines as an

agent for inter-airline cooperation.

IATA has many committees, but the

most significant is Traffic, which

negotiates many arrangements

between states and airlines. Other

airline organisations exist,

particularly within Europe, which

operate on a similar basis. As well as

certain freedoms granted by

Conventions over the years (such as

flying over certain territories, taking

tech stops and collecting or

discharging passengers), other rights

of commercial entry are established

by bilateral agreements, which

provide for route(s) to be flown,

estimate traffic capacity, frequencies

of service and establish other precise

rules under which operator and crew

licensing are accepted by the

respective parties to the agreement.

Employment

As soon as you start working a

contract of employment is deemed

to have started. There are reams of

papers on the ins and outs of

contracts, but basically once a

contract is formed there are rights

and duties on either side, made the

more binding if something called

consideration (remember that?) is given

by anyone to seal the bargain. This

consideration need not be money,

nor need it be adequate.

Unless you're a freelance, you will

normally enter a contract of service

where you have a master/servant

relationship with your employer. If

you're self-employed, you will be

regarded as an independent contractor,

and in a different legal position if a

passenger decides to sue for any

reason (your "employer" may be able

to drop you right in it).

If a passenger does want to sue,

you're more protected if you're

actually an employee, because the

come-back is then on your employer,

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as you're a part of his business,

although there is a let-out if he can

Legal Stuff 287

prove you were acting outwith the

terms of your employment, but as long as

you haven't done anything totally

stupid, you should be OK (this also

applies in Canada).

Aside from whether your tax is

deducted at source, you can identify

the essential difference between the

two in the way that you're treated.

An independent contractor is

outside the employer's business and

is told merely what has to be done,

and not how.

In Canada, there is a 4-part test as to

whether you are an independent

contractor or not, but, unless you

actually own the air service or have

income from other business pursuits,

it is difficult to meet (deductions at

source are not part of it).

Most contracts are free and easy, it

being up to both parties what they

want out of any situation. However,

contracts of employment (and sales

of goods, incidentally) are regulated

by law, so there is less freedom of

movement, although the bias is on

your side, helping to protect you and

allow more collective bargaining

(this last only applies if you're in a

union, of course, but there are none

for General Aviation).

Although any contract may be made

verbally (which could override a

written contract, by the way, subject

to provability), the law lays a duty on

the employer to give you a written

statement within 13 weeks of

starting work detailing conditions

about such things as pay, hours,

holidays, pensions, sick pay, notice,

disciplinary rules and any other

procedures which may affect you. If

you don't get a written statement,

you may be able to use what actually

goes on between you as evidence of

the presence of a contract.

Employer's Duties

· To pay wages as agreed. You are

entitled to a written itemised

pay statement, regardless of the

method of payment. It must

contain certain minimum items.

· To indemnify against liability

and loss (as a result of doing his

work).

· To provide a safe system of

work (including premises and

aircraft).

· References are subject to the

law of defamation (libel is

written, or, rather, permanent—

slander is spoken). Be careful,

though, to distinguish between a

false statement and an

expression of opinion made

without malice.

Your duties

· Obedience. It's your duty to

obey a lawful order, but there

are proper procedures for your

dismissal if you don't.

· To show good faith, that is,

work in your employer's best

interests.

Like any contract, one for

employment will take place

according to agreed terms and

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conditions, but if there is a dispute, it

will be judged according to what is

reasonable. In the case of

termination, there may be damages

on either side, provided it could be

proven that damages were suffered

as a result of the action.

288 Operational Flying

The usual problem is unfair dismissal

on the employer's part, though, and

there are strict procedures that

enable you to go to an Industrial

Tribunal should such an event

happen. I suggest you check out

your local Citizen's Advice Bureau

for the latest information. In

Canada, you would have to apply to

the Human Resources Development

people, as aviation is a federally

regulated business.

There is an Equal Pay Act which

allows women to receive the same

pay as men for performance of

equivalent work. It also makes it

illegal (with certain exceptions) for

discrimination on grounds of sex,

and it applies both ways.

Neither is an employer allowed to

discriminate on race grounds.

In Canada, employees have rights

under the Canada Labour Code Part

II, or Occupational Safety and

Health Regulations.

Health And Safety At Work

This applies to Aviation as well, and

there is actually a Common Law

duty of care laid on whoever you

work for to ensure that the aircraft

flown are airworthy and fit for

Commercial Air Transport in every

respect. You are required to do a

pre-flight check, to be sure but, not

being a qualified engineer, there are

some things about an aircraft's

condition for flight you just have to

take on trust, which become the

Operator's responsibility. If

something turns out to be wrong,

then despite the adherence to

authorised maintenance schedules,

there could be negligence involved.

Recent amendments to the ANO

mean there are cases in which crews

cease to be passengers carried under

the terms of Commercial Air

Transport. Under these

circumstances, there is a lowering of

safety standards applicable to

working conditions, as they are

obviously no longer protected by

those conditions.

Setting up a Company

Most pilots are quite happy working

their way up the career ladder,

graduating to larger and larger types

as their experience grows and don't

concern themselves with the

possibilities of operating their own

aircraft.

One day, though, there will be an

opportunity to set up your own

Company and obtain your own

AOC, typically where you come

across somebody with an aircraft

who would like to offset the costs of

operating it against some income. Or

it may be that you come into some

money yourself and feel able to go it

alone. More common is where you

fly somebody on a charter who is

new to flying, they become

impressed and decide to buy their

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own aircraft, and because you were

their first pilot you get made an offer

you can't understand.

There's nothing wrong with this, but

think seriously before leaving

employment with relative security

for something that may only last a

few months. One rule of thumb

(which works very well) is that the

more attractive the package offered,

the less stable is the job. Another is

to subtract twenty-five from the

physical age of anyone who's keen

on Aviation for its own sake, and

wants to make a business out of it,

to get their mental age. If you can,

find out something about the

company your prospective employer

runs. Have they got credibility? Are

they well established, or is the man

you're talking to just an idiot with

access to other people's money

rather than his own? (See how many

of his cheques bounce, and how

much of what he says will happen

actually comes true). Signs that a

company won't last long include

excessive flamboyance on the part of

the Boss, who naturally pays for

everything, treating all and sundry to

lunches, drinks, etc. (if it was really

his money, he wouldn't be doing

that). Statements to the Press that

are less than complimentary to other

companies around should also be

noted, as should excessive hype and

illogical spending on non-essentials,

where the basics aren't being looked

after—that is, they spend money on

smart new offices rather than

servicing the aircraft.

290 Operational Flying

I don't mean to put you off from

anything that could lead to greater

things, but a little scepticism in the

early stages could save you and a lot

of other people plenty of

aggravation later on. There are

several ways to protect yourself. One

is, don't move at all—bide your time

and see what actually materialises out

of what your prospective employer

promises. Many people say a lot, but

not much actually happens—they

give the illusion of movement

without actually progressing

anywhere (like 'reorganisation' in a

large company). The more urgency

projected, the more sceptical you

should be.

Another way of protecting yourself

is to have somewhere to go to if

things fail to materialise; an even

better way is to estimate the amount

of work you can expect to do for a

year and insist on payment of the

whole lot in advance. If they want

you enough, they'll produce the

goods. In fact, to work in Aviation at

any level (as opposed to playing in it)

needs a more businesslike approach

than most people think, at least as

far as mental attitude is concerned.

The whole idea of doing the job is to

earn money; if you happen to enjoy

it, you're lucky, but you are doing

yourself and other pilots a disservice

by underselling yourself just because

you're keen to fly. You suffer the

same fate as companies who

undercut—in the end, the waters just

get stirred up, nobody makes any

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money at all and very few survive.

Financial Matters

If, despite all that gloom, you still

want to carry on, please let me add

one more word of warning—you

will need much, much more money

than you anticipate. Not for nothing

is it said that to end up with a small

fortune in Aviation, you need to

start with a large one! But it needn't

be that bad, provided things are

done properly from the start.

First of all, if you need to borrow

money, you'll need as much slack as

you can get to cover cash flow while

you're waiting for customers to pay,

and emergencies—if you only ask

for just enough money, it will be

patently obvious you don’t know

what you’re doing and will be shown

the door. When running an airline,

you will find that major travel

agencies can take up to 6 months (or

more) to pay their bills, if they pay at

all, which will cause major cashflow

problems. Once the fuel companies

don't give you any more credit, you

don't have long to go, because

people who owe you money

definitely won't pay if they can get

away with it.

Also, things only work out cheaper if

you can afford to fork out the

money from the start. Buying your

own bowser, for instance, instead of

positioning your helicopter to the

local airfield for fuel, will probably

cover all that empty flying and

unnecessary landing fees inside three

months, but you have to have the

money in the first place—paying as

you go along should be avoided as

much as possible, as it will usually

kill any project stone dead.

Don't depend purely on loans. In

fact, you probably won't get one till

the lender sees some input from

another source (preferably yours), so

you may need to find a Venture

Capitalist who would be willing to

invest in your project. These sort of

Setting Up A Company 291

people supply money in return for

stock (shares in the Company),

typically expecting to be free of their

obligation in about four years or so

with a handsome profit (although

they could make a loss). The major

benefit to you is that they provide

ready cash and a bit of stability

without your spending power being

drained continually by interest

payments. Although a business plan

is important, you will find that your

personality, or those of others in the

plot, will account for at least half of

the decision.

Use accountants, by all means (you

will need one on board for the

business plan), but never, ever let

them run your business, unless

they’ve either been there themselves

or have gone to business school. The

problem is, their training makes

them very narrowly focussed, and

they often fail to see the big picture.

Mind you, pilots running businesses

have limitations, too, since they’re

programmed to fly and don’t always

realise you can make more money by

not flying sometimes.

Business Plan

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This is needed to raise capital—it is a

brief sketch of your proposals,

detailing how you mean to repay the

money, together with how things

will be run (this includes details of

the management team). Like a cv, it

should be short and to the point,

somewhere between a quarter and a

half inch thick, and, provided it is

well thought-out, need not be too

polished, though it should still look

neat, tidy and professional. Here are

some suggested headings for a start:

· Introductory letter. Why are you

writing the plan (to raise money

for expansion? An aircraft?).

· Title Page. Name phone, date

completed.

· Table Of Contents.

· Summary of proposed venture.

Description of business.

· How much needed, and how it

will be used.

· Amount already invested;

equipment, market testing , etc.

· Security—property, stock and

other assets.

· Background info—Limited

company? plc? Sole

Proprietorship?

· Mission Statement. Key

activities.

· The industry. Niche available.

Competition.

· Management—organisation, cvs,

proposed benefits.

· Target markets—individuals or

corporate.

· Advertising

· Land, buildings and equipment.

· Operations—work flow,

personnel.

· References

· Financial Plan—capital

requirements and sources to

data, profit/Loss—cash flow for

at least one year; projected

income for at least one year;

proforma balance sheet, showing

292 Operational Flying

projected current and fixed

assets, and liabilities. Break-even

calculations.

· Risks and problems; worst case -

what if demand falls, or you get

more competitors, or overheads.

What's left if you don't succeed?

Avoidance of risks. Impact of

risks you can't avoid.

The magic figure to survive in the

small charter world is 500 hours per

aircraft per year—that's revenue

hours, ten a week, which doesn’t

include training, etc. Remember, the

object of the company is not to fly,

but to make a profit so that you can

live, or to provide the investor with a

return on his capital (not profit

necessarily, although sometimes they

can coincide). Far too many people

forget this, set themselves up with

no research, don't market their

product, then expect the world to

beat a path to their door because

they have an aircraft. Even if work

does come, more often than not by

accident, the same people undercut

everybody else around, thinking to

put the opposition out of business

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then put the prices up again.

Unfortunately, it doesn't happen like

that—they're the ones to go out of

business first because they have no

cash flow, left with debts, wondering

what went wrong.

A lot of Aviation Companies owe

their existence to a larger parent

company that bought an aircraft as a

way of spending excess money that

can't otherwise be used (there is such

a thing), but it's not impossible to

survive purely on Aviation without

assistance from a Big Brother.

Whether it is or not depends on the

existence of competition, how big

you expect your Company to be and

the availability of the work itself (if

there's no competition, have you

thought of the fact that there might

not be any work?).

Purchasing An Aircraft

Whatever happens, you will have to

get your hands on a machine.

Expensive stuff like that (while being

an asset in itself) will create massive

debt which will require servicing,

which in turn means interest. Which

company will take care of that? If the

Aviation Company itself buys the

machine then it will have that much

more to worry about.

What is more likely is that an outside

company will own the aircraft and

lease it to your Company, giving the

additional benefit of the equipment

being one step removed in case of

disasters. Outside aviation it's

common practice to place all

valuable assets into a holding

company that trades only with

associated ones, thus insulating them

from unplanned contingencies (try

looking at a Pure Trust). Where

Aviation is concerned, it also legally

separates the registered owner from

the user. The leasing cost to you will

be a total of maintenance costs,

spares or engine replacement costs,

insurance costs plus a bit on top for

contingencies (the spares or engine

replacement costs are like

depreciation, an accountant's way of

establishing a fund for future

replacement of machinery).

There are two types of lease, wet or

dry. The former will include fuel,

which is useful, because there's less

squabbling over who put what fuel

in what aircraft. It's easier just to let

the owner pick up the tab, provided

Setting Up A Company 293

he's not overcharging. Leasing costs

are charged hourly and the total cost

is variable, that is, dependent on the

amount of hours flown.

There is a chance that the anticipated

costs above turn out to be less

expensive than you anticipate, but

that will be the lessor's good fortune,

not yours. Of course, things could

go the other way and it will cost him

more—this will happen if he buys a

bad machine in the first place

and/or it's flown badly. Leasing

means that you have no asset to fall

back on, which you would have if

you raised a mortgage and bought it.

If you ever end up leasing an aircraft

to somebody else, you will make the

most money by stumping up at least

50% yourself and financing the rest.

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One creative solution is to raise a

loan on something else, say, a house,

and use that money to buy the

aircraft – you will then get lower

interest rates and longer terms.

The aircraft doesn't just cost, say two

million pounds. It will also cost what

you can't do with the money having

spent it—what economists call the

opportunity cost. In other words, you

lose the opportunity to do

something else with it, even if only

to sit in a bank account and gain

interest. Sometimes it's better not to

buy outright but to do it on a

mortgage and let the interest gained

from whatever you do with the rest

pay the interest on the mortgage.

With a little shopping around for

interest rates (abroad as well) this is

entirely possible.

Imagine you have the choice of two

aircraft—one relatively expensive to

buy, but cheap to operate and the

other cheap to buy, but expensive to

run. Both do the job you want—

well, near enough, anyway. The

difference in purchase price between

the two may well, if placed on

deposit somewhere, more than pay

for the increased running costs if

you buy the cheaper one. However,

in the UK, which is not an aviationminded country in general, this may

be low on the list of priorities, as

often the purchasing of an aircraft

will tend to be a personal decision

on behalf of the Chairman.

So, when evaluating an aircraft, first

establish what you want it to do—in

many cases, a simpler, cheaper

aircraft will suit. For example, if you

want a helicopter for corporate

transport, use a 206B-III, but for

training or pleasure flying, a 206A

would not only be cheaper, but more

efficient, as its C18 engine is not

cycle-limited.

What's the maximum range, and

where is the nearest airfield to the

factory? What's its optimum cruise

height and will you get a "wet

footprint" if you have to go lower

over water if an engine stops? Do

you want an aeroplane, or would a

helicopter be better, where you

might spend longer in the air, but

have a shorter time between offices

and not need ground transport from

airfields? How many passengers will

you normally carry, and will they

want to hold meetings in the back?

The bigger and faster it is, the more

money it will cost.

However, having the most costeffective aircraft ever won't help if

you can't afford even that. Your

budget may stop you dead and

restrict you further—you have to run

it as well.

294 Operational Flying

If you get professional help, it will

cost you money, so what you need

to do is aim your money at the best

target. The proportion of the cost to

the actual purchase price will be

larger with smaller aircraft because

there's just as much work involved in

selling them as there is with larger

ones, and the total price is

substantially less.

A broker will be selling somebody

else's plane on their behalf,

essentially taking money for the