In aviation, holding out is the FAA’s term for presenting yourself to the public as willing to fly people or cargo from one place to another for compensation. It is the single factor that turns a private flight into common carriage, and once you cross that line without an air carrier certificate under 14 CFR Part 119, you are running an illegal charter. The operation does not have to look like an airline. A pilot with one airplane and a social media account can hold out just as effectively as a scheduled carrier.
The FAA identifies four elements of common carriage: a holding out of willingness, to transport persons or property, from place to place, for compensation. When all four are present, you need a certificate. Holding out is the element that does most of the work, because plenty of for-hire flying involves the other three. The FAA’s core guidance, Advisory Circular 120-12A, describes a common carrier as one that “holds itself out to the public, or a segment of the public, as willing to furnish transportation within the limits of its facilities to any person who wants it.”1Federal Aviation Administration. AC 120-12A – Private Carriage Versus Common Carriage of Persons or Property Willingness to serve anyone is the tell.
What Counts as Holding Out
You do not need a billboard or a website. Any action that signals you will fly the public for money can qualify. The direct methods are the obvious ones: advertising through signs, social media, printed flyers, or online platforms. Having a business name, keeping an office, or actively soliciting customers all point the same way.
The subtler cases are the ones that catch pilots. A reputation for providing air transportation can be enough on its own. If word of mouth creates a general understanding that you will fly anyone who asks, the FAA can treat that as holding out, and it looks at the totality of your conduct rather than any single formal marketing effort. Whether your efforts actually produce business is irrelevant. The offer is what matters, not whether anyone accepts it.
How the FAA Defines Compensation
Holding out only forces certification when it is paired with compensation, and the FAA reads compensation far more broadly than most pilots expect. The agency defines it as the receipt of anything of value that is contingent on acting as pilot in command of an aircraft.2Federal Aviation Administration. Advisory Circular 61-142 – Sharing Aircraft Operating Expenses in Accordance with 14 CFR 61.113(c)
That definition sweeps in arrangements that feel nothing like getting paid. Expense reimbursement counts. So do free meals, logged flight time you would otherwise have to pay for, and the expectation of future business or goodwill. In its AirPooler legal interpretation, the FAA traced this reading to a 1963 description of compensation as “the act of making up for whatever has been suffered or lost through another, and the act of remuneration.”3Federal Aviation Administration. FAA Legal Interpretation – AirPooler, Inc. Any tangible or intangible benefit tied to the flight is likely to count.
The Narrow Cost-Sharing Exception
Private pilots have one carve-out. Under 14 CFR 61.113(c), a private pilot may share operating expenses with passengers, but must pay no less than a pro rata share, and only fuel, oil, airport expenditures, and rental fees may be split.4eCFR. 14 CFR 61.113 – Private Pilot Privileges and Limitations: Pilot in Command The pilot counts as one of the people sharing, so on a flight with a single passenger, the pilot pays at least half.
The exception is deliberately narrow. The pilot must have a genuine common purpose with the passengers for the flight; a trip arranged solely for the passengers’ benefit does not qualify. Expense sharing is still compensation as the FAA defines it. The regulation just carves out a specific safe harbor. Pilots who stretch the exception by posting flights on ride-sharing platforms for strangers to book are the kind of case the AirPooler interpretation was written to shut down.
The Middle Category: Private Carriage for Hire
Between purely private flying and common carriage sits a third category the FAA calls private carriage for hire. It is carriage for compensation without holding out. In practice, that means serving one or a few selected customers on a long-term basis rather than offering flights to whoever walks in.1Federal Aviation Administration. AC 120-12A – Private Carriage Versus Common Carriage of Persons or Property
Volume matters, and the line is not generous. The FAA has found that an operator with 18 to 24 contracts was a common carrier because the number alone implied willingness to serve anyone. An operator with three contracts as the sole basis of its business was found to be a private carrier. There is no magic number. The more customers you serve, the harder it becomes to argue you are not holding out.1Federal Aviation Administration. AC 120-12A – Private Carriage Versus Common Carriage of Persons or Property
The FAA also looks at whether the operator tailors service to individual customers. Custom scheduling, specialized equipment, and client-specific routes all lean toward private carriage, though the agency cautions that this factor is “not necessarily conclusive” on its own. An operator already holding a Part 135 certificate cannot simply relabel certain flights as private carriage; those flights have to be clearly distinguishable from and outside the scope of what the operator offers publicly.
Lease Arrangements That Become Holding Out
Leasing is one of the most common ways operators drift into unauthorized holding out. In a wet lease, the aircraft comes with at least one crewmember. In a dry lease, the lessee brings the crew.5Federal Aviation Administration. AC 91-37B – Truth in Leasing The distinction controls who has operational control of the flight, and therefore who needs the certificate.
The trap is what the FAA calls a sham dry lease. It looks like a dry lease on paper but functions as a wet lease in practice, often through two separate contracts arranged by the same or coordinated parties: one for the airplane, one for the pilot. The FAA’s position is direct. If a person leases an aircraft and also provides the crew, fuel, and maintenance, the lessor is the operator, and the operation is subject to Part 121, 125, 129, or 135 certification unless it fits within a Part 91 exception.5Federal Aviation Administration. AC 91-37B – Truth in Leasing Splitting a wet lease into two contracts does not solve the certification problem. It is a specific pattern enforcement targets.
What Certification You’d Actually Need
Under 14 CFR Part 119, anyone operating civil aircraft as an air carrier or commercial operator, or engaging in common carriage, must hold the appropriate certificate and operations specifications.6eCFR. 14 CFR 119.1 – Applicability Large scheduled operations run under Part 121.7eCFR. 14 CFR Part 121 – Operating Requirements: Domestic, Flag, and Supplemental Operations Smaller commuter and on-demand charter work runs under Part 135, with its own crew qualifications, maintenance standards, and operational limits.8eCFR. 14 CFR Part 135 – Operating Requirements: Commuter and On Demand Operations
Part 119 reaches past common carriage in two ways worth knowing. Operators of aircraft with 20 or more passenger seats or 6,000 pounds of payload capacity fall under Part 119 even without common carriage. And private carriage for hire generally falls under Part 119 unless it qualifies for the exceptions in 14 CFR 91.501, which cover things like company flights carrying employees and guests as part of normal business, time-sharing and interchange agreements, and demonstration flights for prospective buyers.9eCFR. 14 CFR 91.501 – Applicability Student instruction, certain nonstop sightseeing tours conducted under a letter of authorization, and ferry or training flights are also outside Part 119.6eCFR. 14 CFR 119.1 – Applicability
Penalties for Illegal Holding Out
Federal law flatly prohibits operating as an air carrier without a certificate.10Office of the Law Revision Counsel. 49 USC 44711 – Prohibitions and Exemption The FAA maintains a Special Emphasis Investigations Team dedicated to complex illegal charter cases.11Federal Aviation Administration. Rogue Operators in the News and Enforcement Actions
Enforcement runs on two tracks. The first is certificate action. The FAA can revoke both the operator’s authority and the personal pilot certificates of anyone involved. In one Florida case, the agency revoked the company’s operating authority and the owner’s pilot certificate after finding 33 flights conducted over several years without proper certification, using pilots who had not passed required competency checks.12Federal Aviation Administration. FAA Revokes Certificate of Florida-Based Universal Flight Services for Alleged Illegal Charter Flights
The second track is civil penalties. Under the FAA Reauthorization Act of 2024, the maximum administrative civil penalty is $1.2 million for an organization and $100,000 for an individual.13Office of the Law Revision Counsel. 49 USC 46301 – General Civil Penalties Recent proposed fines have approached those ceilings, including $5.89 million against one Atlanta-based operator and $1 million against another for alleged illegal charter flights.11Federal Aviation Administration. Rogue Operators in the News and Enforcement Actions For a pilot who loses a certificate over a charter side business, the damage runs well past the fine.