Operators engaged in passenger-carrying operations, cargo operations, or both with airplanes or powered-lift when common carriage is not involved

This regulation determines which operating rules apply when you're flying passengers or cargo for compensation but NOT as a common carrier (like an airline). The key factor is aircraft size:

Larger aircraft (20+ passenger seats OR 6,000+ pounds payload capacity) must operate under Part 125 rules, which require formal certification and operations specifications.

Smaller aircraft (fewer than 20 seats AND under 6,000 pounds payload) must operate under Part 135 rules (excluding commuter-specific requirements) and also need operations specifications through Part 119's certification process.

This matters because you can't simply use Part 91 rules when flying for compensation, even in private carriage situations. The regulation closes a potential gap by ensuring that paid operations—whether you're flying a corporate jet for one company or doing charter-like flights that aren't technically common carriage—still meet commercial operating standards appropriate to the aircraft size. The exception reference to §91.501(b) relates to specific large aircraft operations.

*This is a plain-English summary for study only. The official 14 CFR text on this page is controlling — always read the current regulation and consult a CFI.*