Brown-Trans-Share Corporation - 1976

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April 16, 1976
Mr. D. David Brown
President
Trans-Share Corporation
Box 1364
Los Altos, California 94022
Dear Mr. Brown:

This letter is in reply to your letter dated April 7, 1976, with copies of the Share-A-Flite membership card, membership agreement, and a form letter sent to new members of the association.

While it is the expressed intent of the Trans-Share Corporation, the managing member of the association, to provide a nationwide referral service to both pilots and passengers, to enable both to secure the cost benefits of shared costs within the terms of FAR 61.118(b), the size and scope of this undertaking, combined with the "extensive advertising and magazine coverage" used by the TSC strongly suggests, if not compels the conclusion that pilot/operators are holding out to the public that their services are available for compensation or hire. Flight operations conducted in this context could well be contrary not only to FAR 61.118, but FAR 135.1. As the referral service is not limited to costs of operating small aircraft, it would patently involve violations of FAR Part 123 where a large aircraft is used, and depending on the circumstances, Part 121 of the Federal Aviation Regulations.

Initially, we note that a new member is not limited to a human person, but may be another association, corporation. The member, from the standpoint of the potential flight crewmember, may be the holder of a commercial pilot or airline transport pilot certificate. The referral service is not limited to the use of small aircraft. It encourages frequent flights by the pilot/operators with any segment of the public which happens to need transportation from Point A to Point B. The more non-specific the referral request, the better the chance for a match-up.

The Civil Aeronautics Board, pursuant to Title IV of the Federal Aviation Act of 1958, as amended, 49 U.S.C. 1371 et seq., exercises statutory economic authority over "persons" engaged in air transportation. The identification of a common carrier is premised upon the "holding out" to

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the public by the person or persons engaged in the service. The "holding out" is the "means which communicates to the public that a transportation service is indiscriminately available" to the members of the segment of the public it is designed to attract. Transocean A. L., Enforcement Proceeding, 11 C.A.B. at 353. It might be difficult for the pilot/operator of the aircraft to contend successfully that he (she) did not have common carrier responsibility to the passengers in the event of accident or other situations normally involving liability. Notwithstanding the disclaimer in the membership agreement, it is also possible that the CAB could place "indirect carrier" status on your corporation, insofar as some substantial amount of property may be shipped as part of the service offered. (See: 14 CFR 296) The "service" offered by the Association, as defined in paragraph 1.d. of the membership agreement, would involve, as to some number of the flights, the air shipment of property for business purposes.

The term "compensation or hire" is not defined in the Act or the regulations. A test is set forth in the definition of a "commercial operator" at FAR 1.1. A commercial operator is, with reference to interstate operations, limited to private carriage. FAR 1.1 provides, in part, "Where it is doubtful that the operation is for 'compensation or hire,' the test applied is whether the carriage by air is merely incidental to the person's other business or is, in itself, a major enterprise for profit." The profit motive is obviously an integral element in private carriage operations.

In summary, even if the TSC or the association are not themselves the owners or lessors of any aircraft, nor the employers of any pilots, it is conceivable that the legal responsibilities arising out of the holding out to the public will result in FAR compliance problems, and considerations of economic significance for review by the CAB.

Sincerely,

Original Signed by

DeWitte T. Lawson, Jr.

DEWITTE T. LAWSON, JR.

Acting Regional Counsel

cc:

AGC-20 (w/encl)

AWP-260 "

CAB-(Fred Phillips) (w/encl)