Aircraft Use Policies for Business Aviation

Clear aircraft use policies are one of the most effective ways to protect your business, maintain compliance, and preserve the tax benefits of aircraft ownership. A well-written policy establishes who is authorized to use the aircraft, under what conditions, and how flight expenses will be managed.

At AvTax Advisors PLLC, we help aircraft owners and operators create detailed use policies that align with FAA and IRS requirements while supporting your operational goals. Contact us today to consult an experienced aviation attorney.

What Do Aircraft Use Policies Cover?

An aircraft use policy is a written set of rules that defines how a business or individual may use company or personally owned aircraft. According to the National Business Aviation Association (NBAA), every organization that owns or operates an aircraft should have a documented policy to govern usage, scheduling, and expense allocation.

While each policy is unique, most address the following areas:

Purpose and Scope – Clarifies what kinds of flights are permitted, such as business, personal, or charitable use, and which are prohibited.
Authorization Process – Identifies who can schedule or approve flights and outlines the process for submitting requests.
Personal and Guest Use – Defines whether family members, employees, or business guests are eligible to fly, and under what reimbursement conditions.
Scheduling and Priority Rules – Outlines how flights are prioritized and managed when multiple users have access to the aircraft.
Cost Allocation – Explains how expenses will be billed, reimbursed, or charged between users or business entities.
Pilot Authority and Safety Standards – Reinforces that pilots retain operational control and may cancel or modify a flight for safety reasons.
Compliance and Recordkeeping – Details how flight logs, maintenance records, and expense reports must be maintained to support audits or tax filings.

Each of these elements provides structure and accountability. Without them, even well-run flight operations can encounter tax disputes, compliance issues, or concerns about misuse.

Why a Detailed Policy Is Essential

A written policy does more than document internal rules—it protects both the owner and the company.

Tax Compliance and Deductibility

Under IRS rules, flight expenses are only deductible when properly documented and are related to the business. Without a policy clearly distinguishing between personal use and business use, deductions may be challenged, and federal excise taxes could be applicable.

Regulatory and Safety Oversight

A defined policy ensures operations remain consistent with FAA regulations, especially regarding who holds operational control and how flights are conducted.

Internal Governance

Written rules clarify who is authorized to use the aircraft, under what conditions, and how disputes are to be resolved. In short, establishing clear access and approval procedures helps prevent internal misunderstandings and improves accountability.

Audit and Legal Protection

In the event of an audit or litigation, a signed and enforced policy provides evidence that the aircraft was operated responsibly and within regulatory limits.

Preserving Ownership Benefits

Properly drafted policies support compliance with “flight department company” rules and help maintain the liability protection intended by your entity structure.

How to Create an Effective Aircraft Use Policy

Creating an aircraft use policy requires a thoughtful, collaborative approach. The NBAA recommends that flight departments, tax advisors, and legal counsel work together to ensure consistency across all operational and financial aspects.

Step 1: Define Objectives and Scope

Identify what the aircraft will be used for, who will use it, and the goals of ownership—whether that’s corporate travel, charter operations, or personal convenience.

Step 2: Establish Clear Rules for Use

Outline when and how the aircraft can be used. Include business travel, personal trips, and mixed-purpose flights. Clarify reimbursement expectations and approval steps.

Step 3: Integrate Tax and Accounting Procedures

Tie flight activity to your accounting records. Document trip purposes, maintain flight logs, and ensure that expenses align with the designated use. This documentation supports deductions and compliance with IRS substantiation requirements.

Step 4: Reinforce Safety and Operational Control

Include a statement confirming that the pilot in command maintains authority over all safety decisions. This reflects FAA standards and helps protect your business from liability.

Step 5: Include Oversight and Review

Policies should not remain static. Establish a schedule for review—at least annually or whenever the business structure, tax law, or operational model changes.

Step 6: Educate All Users

Once finalized, the policy should be shared with every person authorized to use the aircraft. Training sessions or written acknowledgments help ensure everyone understands their responsibilities.

These steps transform a policy from a document into a practical compliance tool.

Benefits of Working With an Aviation Attorney

Drafting or updating an aircraft use policy involves more than filling in a template. The policy must reflect how your aircraft is owned, financed, and operated. Our aviation attorney can help you:

Align your policy with FAA operational control rules and IRS documentation requirements.
Prevent “flight department company” exposure by structuring use and reimbursement correctly.
Draft enforceable provisions that protect your company in the event of misuse or disputes.
Update policies as tax laws or FAA guidance change.

At AvTax Advisors, we combine aviation and tax experience to ensure your policy supports compliance, minimizes exposure, and keeps your operations running smoothly.

Partner With AvTax Advisors PLLC

A thoughtful, well-crafted policy helps you demonstrate accountability, protect your tax advantages, and promote safety across every flight. Whether you are purchasing your first aircraft or managing a growing fleet, you can depend on AvTax Advisors to help you implement a use policy that fits your goals and safeguards your investment.

Aircraft Use Policy Attorney for Business and Private Aviation