Market rate (aircraft rental)

The legal definition of direct costs includes "aircraft rental fees at current market rate", but the legislation itself does not define "market rate". The CAA's guidance material does:

‘Market rate’ in this context means the average rental price of the same type of aircraft in the same geographic area on the particular date of the flight.

That is GM1 NCO.GEN.102(c)(b); CAP 1590 (guidance), para 37 uses the same words.

Joint owners

GM1 NCO.GEN.102(c)(c) says that for a jointly owned aircraft "the CAA considers the hourly rate, normally payable by a joint owner, for use of their aircraft to be a 'direct cost'. It may be no more than the average market rental price." CAP 1590 para 30 puts it as "should be no more than".

What it means in practice

If you rent from a club, the hire charge you actually pay is the obvious figure, but it should sit in line with what similar aircraft rent for locally. If you share an aircraft, the group hourly rate can be no more than the average market rental price, and fixed costs above that are annual costs. Whether a sole owner can charge any notional rental isn't settled; the cautious approach is to share only fuel, oil and airfield charges. Keeping a note of comparable local rental rates is a sensible way to show your figure is reasonable. The aircraft cost pages can help as a starting point.