When must an aircraft's documents show it was test flown and approved for return to service after an alteration or repair?

The correct answer emphasizes the importance of safety and compliance following maintenance activities. In aviation, any alteration or repair to an aircraft requires that the aircraft be properly test flown and approved for return to service to ensure it is safe for operation. The specific requirement that this must occur prior to the aircraft being operated with passengers aboard highlights the heightened responsibility and risk associated with carrying passengers.

When an aircraft carries passengers, the stakes of any malfunction or failure are significantly higher. Therefore, regulatory standards necessitate that operators ensure the aircraft is adequately tested and deemed safe for such operations. This step helps protect both the passengers and the crew, as well as comply with aviation regulations which prioritize safety.

While the other options address important operational considerations, they do not capture the specific regulatory requirement that focuses on the safety implications of carrying passengers. For instance, operating under VFR or IFR rules or for compensation or hire does not specifically guarantee the safety ensured by prior test flights after repairs. Moreover, while ensuring that only trained pilots operate the aircraft is crucial, the test flight requirements specifically link to the safety of passenger transport.