New FAA Chief Counsel Opinion Revises Policy Concerning Reimbursement of Company for Personal Use of Aircraft

The Chief Counsel's office has issued an Interpretation dated Dec. 30, 2010 which substantially revises the long-standing "Schwab Interpretation." The Schwab Interpretation prohibited business executives from reimbursing the company for personal use of the corporate aircraft. Instead, the executives were required to have income imputed to them or enter into a Time Share Agreement. Subject to the limitations noted in the Interpretation, the FAA now agrees that a high level employee could reimburse the company for "the pro rata cost of owning, operating and maintaining the aircraft when used for routine personal travel by an individual whose position merits such a high...