FAA-NTSB Court Cases Threaten Training Sector Stall

With the Experimental Aircraft Association (EAA) AirVenture 2021 about to takeoff in Oshkosh, Wisconsin, a battle continues to rage between owners of limited-category aircraft and the FAA. Robert W. Moorman explains.

An ongoing court case involving a Florida-based flight school and the Federal Aviation Administration (FAA) could adversely affect the pilot training community at large.

The case dates back over a year and involves the FAA’s Orlando-based Flight Standards District Office (FSDO) and Warbird Adventures (currently of Kissimmee, Florida; moving this summer to South Carolina). The FSDO notified Warbird that it needed an exemption to provide pilot training in a limited-category aircraft, in this case a Curtis P40 Warhawk, a single-engine, single-seat World War 2 fighter aircraft.

Warbird challenged the FAA that the regulations did not require an exemption and continued training in the P40. After several warnings, on 28 July 2020, the FAA issued a Cease-and-Desist order preventing Warbird from providing training in the aircraft without an FAA exemption. Warbird and its President and Chief Pilot Thom Richard may continue to provide flight instruction in aircraft with standard category airworthiness certificates.

On 26 February 2021, the Chief Administrative Law Judge for the National Transportation Safety Board (NTSB) granted the FAA’s motion to stay the administrative certificate suspension. The stay was granted while the US Court of Appeals for the District of Columbia Circuit heard the Cease-and-Desist Order because both cases involved the same parties and facts. The DC Court of Appeals declined to review the Cease-and-Desist Order, which therefore remains in effect.

Two related but separate cases involving the same parties proceed before the NTSB and FAA.

The FAA is also pursuing a Certificate of Enforcement action against Warbird and Richard and a civil monetary penalty against Warbird for violating the 14. C.F.R. 91.315 regulation “by providing flight training for hire in a limited category civil aircraft." The civil penalty case will go before a Department of Transportation Administrative Law Judge, while a NTSB Administrative Law Judge will handle the enforcement action, where it will determine whether an exemption is legally required to provide flight instruction in a limited-category aircraft.

The FAA maintains its position on requiring an exemption for Warbird Adventures to provide flight training in a limited-category aircraft. The agency also expanded its initial legal position and insists all training in experimental aircraft would require a Letter of Deviation Authority (LODA), a formal authorization issued through FSDOs, which authorizes a deviation from specific sections of the regulation. Surprisingly, the FAA also included an exemption requirement for primary-category training aircraft.

Meanwhile, Warbird has applied for an exemption to commence training in the P40 limited-category aircraft. As of this writing, the trainer had not heard from the FAA on whether the petition would be granted or rejected. When asked if Warbird’s exemption application rendered the issue moot, Thom Richard said, “Not at all. I don’t have a choice but to go this route until this issue is resolved. I have gone as far I can with the courts.”

Another noteworthy point: the FAA, in its interpretation of regulations, seems not to make any distinction between paying for flight instruction and payment for carrying a passenger in an airplane.

Because of this lack of clarity, the Aircraft Owners and Pilots Association (AOPA) and nine other aviation groups sent a letter to FAA Administrator Steve Dickson on 8 June, stating that the decision by the DC Circuit Court of Appeals has “serious and negative implications on the broader flight community.”

How broad remains to be seen.

“At this point, we believe the issue is focused on general aviation,” said AOPA General Counsel Justine Harrison. “However, characterization of flight instructor compensation as being for carrying somebody instead of instructing somebody could have downstream implications” for other training sectors, she added.

The FAA, which typically declines to comment on pending legal cases, provided this statement to CAT: “To resolve an inconsistency between FAA regulations and guidance, the FAA will issue owners of vintage and former military aircraft authorization to receive flight training in exchange for compensation in their own aircraft. The FAA will identify a streamlined process and notify owners of affected aircraft soon.”

On 12 July, the FAA published in the Federal Register a “ clarification on flight training for compensation in certain aircraft that hold special airworthiness certificates including limited category, experimental category, and primary category aircraft,” as well as “guidance on how flight training for compensation can be accomplished in these aircraft in compliance with regulations” and “a process for owners of experimental aircraft to obtain a letter of deviation authority to receive and provide compensation for flight training in their experimental aircraft.”

The FAA acknowledged “that the disconnect between the regulations and the guidance to inspectors has created confusion in industry.”

Meanwhile, the NTSB and DOT cases continue. “While those cases proceed, limited category aircraft owners whose aircraft are used in instruction and CFIs, who instruct in those aircraft without an exemption in place, risk facing similar legal battles,” said the AOPA’s Harrison.

Following the 12 July posting, AOPA alleges that, “in court proceedings, the FAA is prosecuting flight instructors who volunteered their time instructing in limited-category aircraft and didn’t receive a penny for doing so, arguing the volunteers had received compensation.”

FAA prosecutors had quoted FAA Advisory Circular 61-142, “defining ‘compensation’ as the receipt of anything of value that is contingent on the pilot operating the aircraft… [it] does not require a profit, profit motive, or actual payment of funds… accumulation of flight time and goodwill in the form of expected future economic benefits can be considered compensation. Furthermore, the pilot does not have to be the party receiving the compensation; compensation occurs even if a third party receives a benefit as a result of the flight.”

“The FAA can’t have it both ways while claiming it is clarifying the situation. This is contrary to the FAA’s mission and obligation to promote safe flight,” said AOPA President Mark Baker.

AOPA claims, “Until July 12, the FAA never required students who provided experimental aircraft to have a LODA to receive flight training and flight reviews.

Now the FAA ‘clarified’ that owners and operators of more than 39,000 experimental aircraft, as well as the CFIs who provide instruction in them, need LODAs in place to receive or give ‘compensated’ instruction in those aircraft… The overreach and refusal to draw limits is breathtaking.”