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An interchange agreement is defined in 14 CFR 91.501 (c)(2) of the Federal Aviation Regulations (FARs) as an "arrangement whereby a person leases his airplane to another person in exchange for equal time, when needed, on the other person's airplane, and no charge, assessment, or fee is made, except that a charge may be made not to exceed the difference between the cost of owning, operating, and maintaining the two airplanes."
Interchange is a very narrow arrangement useful for two (or more) companies, each of which owns an aircraft, to swap time. The exchange of time must be hour-for-hour, but an hourly charge for the difference in operating costs between the aircraft can be made.
Only U.S. registered aircraft that are eligible to operate under FAR Part 91 Subpart F may utilize a interchange agreement. To be eligible, the aircraft must fall into one of the following groups:
- The aircraft has a maximum takeoff weight of over 12,500 pounds, or;
- The aircraft is a multi-engine turbojet aircraft (regardless of size), or;
- The aircraft is a fractional program aircraft (regardless of size).
Aircraft, including piston airplanes, small airplanes, and all helicopters operated under the NBAA Small Aircraft Exemption can also make use of the cost reimbursement options allowed under Part 91, Subpart F, such as a interchange agreement. For additional information, NBAA Members should visit the Small Aircraft Exemption Web Resource.
Flights conducted under a interchange agreement may be subject to a Federal Excise Tax (FET). For information about this tax, Members should access NBAA’s web resource on IRS Commercial Transportation Taxes for Part 91 Flights.
Guidelines and considerations for common lease and management agreements with business aircraft, such as interchange.
Subpart F—Large and Turbine-Powered Multiengine Airplanes and Fractional Ownership Program Aircraft
FAA regulatory requirements for aircraft leases.
Information and best practices to help new flight departments navigate tax and legal issues.
An overview of business aircraft sharing options.