The Core Difference
Every aircraft operation in the United States falls under one of two regulatory frameworks. Part 91 of the Federal Aviation Regulations governs private, non-commercial operations. Part 135 governs on-demand commercial operations, including charter flights. The distinction is not about the aircraft. It is about the purpose and structure of the operation.
If you own an aircraft and fly yourself, your family, or your employees without accepting compensation, you operate under Part 91. If anyone pays to be on your aircraft, that flight must operate under Part 135, and the operator must hold a valid FAA air carrier certificate.
This sounds straightforward. In practice, the line between the two creates more confusion, liability exposure, and FAA enforcement actions than almost any other area of aviation regulation.
Operational Control: Who Is Flying Your Aircraft?
The single most important concept in understanding Part 91 vs. Part 135 is operational control. Under Part 91, the aircraft owner or operator has direct operational control over the flight. They decide when it flies, where it goes, and who is on board.
Under Part 135, operational control transfers to the certificate holder, the management company or charter operator that holds the FAA air carrier certificate. They are legally responsible for the safety of the flight. They assign the crew, approve the maintenance, and determine whether the flight can safely operate given weather, runway conditions, and crew duty time.
This transfer of control is not a formality. It is the legal mechanism that separates private aviation from commercial aviation. If an accident occurs on a Part 135 flight, the certificate holder bears primary regulatory responsibility. If an accident occurs on a Part 91 flight, the owner or operator does.
"Operational control is not about who signs the checks. It is about who has the authority and responsibility to say the flight does not go."
Side-by-Side Comparison
| Factor | Part 91 (Private) | Part 135 (Commercial) |
|---|
| Purpose | Non-commercial, private use | On-demand charter, for-hire |
| Operational Control | Owner/operator retains | Certificate holder assumes |
| Compensation | Cannot accept payment for carriage | Can accept payment from charter clients |
| Pilot Duty/Rest | General guidelines, less prescriptive | Strict duty time and rest requirements |
| Maintenance Standards | Owner-directed inspection program | FAA-approved maintenance program |
| Weather Minimums | More flexible approach minimums | Stricter takeoff and landing minimums |
| FAA Oversight | Periodic ramp checks | Continuous surveillance, annual inspections |
| Insurance Structure | Owner liability policy | Commercial carrier liability policy |
| Drug/Alcohol Testing | Not required | Mandatory random testing program |
1,674
Part 135 Operators in the U.S.
10,738
Charter Aircraft on D085
50%+
Business Use Threshold for Depreciation
Evaluating a Management Agreement?
Our advisory team reviews management agreements, operating structures, and charter arrangements for aircraft owners. We represent your interests, not the management company's.
Speak With an Advisor →
The Management Agreement
Most aircraft owners do not operate their own aircraft. They hire a management company. The management agreement is the contract that defines the relationship, and it is where Part 91 and Part 135 distinctions become tangible.
A typical management agreement covers:
- Crew employment and training: Who hires, trains, and manages the pilots?
- Maintenance oversight: Who selects maintenance facilities and approves work?
- Insurance procurement: Who arranges hull and liability coverage?
- Hangar and base arrangements: Where is the aircraft kept?
- Accounting and reporting: How are expenses tracked and billed?
- Charter authority: Can the management company offer the aircraft for charter?
The charter clause is where most owners need to pay close attention. If the agreement places your aircraft on the management company's Part 135 certificate, your aircraft can be offered for charter when you are not using it. This generates revenue, but it also subjects the aircraft to Part 135 maintenance standards, crew requirements, and FAA oversight for those flights.
Charter Revenue: The Part 135 Financial Case
The financial argument for placing an aircraft on a Part 135 certificate is compelling on paper. A well-managed super-midsize jet might generate $300,000 to $600,000 in annual charter revenue, offsetting a meaningful portion of the $1.5 to $2.5 million annual operating cost.
The reality is more nuanced:
- Charter revenue is unpredictable and varies by market, aircraft type, and base location
- Part 135 maintenance costs run 15-25% higher than Part 91 due to stricter standards
- Charter use adds flight hours, accelerating maintenance intervals and reducing residual value
- The management company typically takes 10-15% of gross charter revenue as commission
- Your aircraft may not be available when you need it if a charter client books it first
For some owners, the revenue justifies the trade-offs. For others, the wear on the aircraft, the scheduling conflicts, and the loss of exclusivity outweigh the financial benefit. There is no universal answer. The right structure depends on your utilization, your financial objectives, and how much you value having the aircraft available on your schedule.
The Hybrid Model
Many sophisticated owners use a hybrid approach: the aircraft operates under Part 91 for owner flights and under Part 135 for charter flights. The management company holds the Part 135 certificate and manages charter operations, while the owner retains the right to use the aircraft for private purposes under Part 91 rules.
This is the most common structure for managed aircraft in the United States, and it works well when the management agreement clearly defines priority scheduling, maintenance allocation, and revenue sharing. Problems arise when these terms are ambiguous.
Insurance Implications
Part 91 and Part 135 operations are underwritten differently. A Part 91 policy covers the owner's private liability exposure. A Part 135 policy covers commercial carrier liability, which carries higher limits and broader coverage requirements.
When an aircraft operates under both frameworks, the insurance structure must reflect both uses. Most management companies maintain a master liability policy under their Part 135 certificate that covers charter operations, while the owner carries a separate policy for Part 91 flights.
The critical risk: conducting a commercial-like operation under a Part 91 insurance policy. If an owner allows a business associate to use the aircraft in a way that the FAA or an insurance underwriter interprets as commercial carriage. The charter market depends on this distinction, the Part 91 policy may not cover the resulting liability. This is not theoretical. Claims have been denied on exactly this basis.
Red Flags in Management Agreements
Not all management agreements are created equal. Watch for these issues:
- Vague operational control language: The agreement should clearly state who holds operational control for each type of flight
- One-sided termination clauses: Some agreements lock you in for 3-5 years with penalties for early termination
- Hidden markups on maintenance: Some companies mark up maintenance costs 15-30% above the vendor invoice
- Fuel procurement surcharges: Fuel should be billed at cost or with a disclosed, reasonable markup
- Unlimited charter authority: You should retain approval rights over charter frequency and minimum scheduling notice
- Non-compete restrictions: Some agreements prevent you from moving the aircraft to a competing management company without penalties
Have your aviation attorney review any management agreement. If you are acquiring an aircraft, this review is essential before closing. Contact us for advisory support before signing. The cost of legal review is insignificant compared to the financial exposure of a poorly structured arrangement.
