Retention of contracts and amendments: Commercial operators who conduct intrastate operations for compensation or hire

This regulation applies to commercial operators conducting intrastate (within one state) flights for compensation or hire. It has two main requirements:

Contract retention: Operators must keep copies of written contracts for at least one year after signing. For oral contracts, they must maintain a written memorandum describing the contract's key elements and any changes.

Financial reporting: Operators must submit detailed financial reports twice yearly—one covering the first six months of their fiscal year and another for the complete fiscal year. Reports are due within 60 days after the period ends. If the operator's certificate is suspended for more than 29 days, an additional report is required. Each report must include a balance sheet, specific information referenced in Part 119, any pending litigation claims, a profit/loss statement separating commercial operations from other business activities, and a list of all contracts that generated operating income.

These requirements help the FAA monitor the financial health and business practices of intrastate commercial operators.

*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.*