Freelancing, Regulations, and You
“I have a friend who owns an airplane. Can you teach me on that?” by Adam Shehata.
This question occasionally comes up in flight training and there are several factors to consider before answering. In essence, what the person is asking is whether you can conduct training in an aircraft not obtained from a Flight Training Unit (FTU).
The term “at arm’s length” is a legal term, and essentially means that you did not provide the aircraft to the student and will receive no direct or indirect benefit from the arrangement. In other words, the aircraft is provided by a disinterested third party. This distinction is important because if the aircraft was not obtained at arm’s length you could be considered to be operating an FTU without an FTU Operator Certificate (FTUOC) in violation of CAR 406.03 and could be subject to enforcement action by Transport Canada (TC).
In short, CAR 406.03 states that with certain exceptions, any aircraft used for training must be covered under an FTU OC. There are exceptions where the trainee is:
1. the owner, or a member of the family of the owner, of the aircraft used for training, or
2. a director of a corporation that owns the aircraft used for training, or
3. using an aircraft that has been obtained from a person who is at arm’s length from the instructor.
Assuming that we are not talking about the owner, family member of the owner*, or a director of a corporation that owns the airplane, we must then define what arm’s length means, in order to comply with the CARs. While this article is not intended as legal advice, the general idea of arm’s length means that the flight instructor does not have any influence on how or where the trainee obtains the airplane. For example, I cannot tell a student to obtain the aircraft from a member of my family or a person I am in a close business relationship with.
Keep in mind that under the CARs you cannot use an arm’s length aircraft for ab-initio (PPL/RPP) training under any circumstances. The intent of this restriction is to protect new students who are not familiar with the flight training environment.
If the above requirements have been met, a letter must be sent to TC advising them of the training so that they can verify the arm's length arrangement meets the legal requirements BEFORE the training commences. TC must also be advised within 10 days of any changes to the information, and when the training is discontinued. The content of the initial letter is specified in CAR 406.03.Other factors to consider prior to conducting any freelance training, especially with an arm’s length aircraft include:
Maintenance – It is important to confirm that all applicable Airworthiness Directives (ADs) and Service Bulletins (SBs) have been complied with. Check for any outstanding defects and when the last annual inspection was done. TC’s CAWIS website can be a useful resource.
Insurance – Usually the trainee will need to be added as a named pilot to the insurance policy and then training conducted by the holder of a valid flight instructor rating will be covered. In some cases, the instructor needs to be named on the insurance policy. Policies vary and instructors not familiar with insurance policies should consult another experienced instructor or CFI.
Coverage – The amount of liability insurance differs greatly between policies. Many private aircraft only require $100,000 of liability insurance; most FTUs have a $5 million policy (most auto policies are $1-2 Million). In the event of an accident, the flight instructor as Pilot in Command may be legally responsible for damages that exceed the coverage of the insurance policy. The flight instructor may want to increase the amount of liability insurance on the policy or look into getting additional insurance for themselves.
Despite their best intentions, aircraft owners and students don’t always have the correct information. Be sure to verify the above yourself and don’t take anyone’s word for it.
Freelance training can be a rewarding arrangement for an instructor. To make sure it remains so and has no surprises, be sure to adequately and correctly prepare.
This article was originally published in Aviation Solutions' company newsletter in 2011. Adam Shehata is an ATP Class 1 flight instructor, and since writing this article has been called to the bar as a lawyer in Ontario. He can be reached at adam@shehata.ca.
* As per the Canada Gazette, Part 1, March 30 2024 a definition of “Family Member” will be added to the CARs, which states “a family member means a parent, child, sibling, or spouse.” -Ed.