Date: 201707
Local time of day: 0601-1200
Location: ZZZ.Airport, US
Flight conditions: VMC
Weather elements / visibility: 10
Light: Daylight
Aircraft: Amateur/Home Built/Experimental
Operator: Personal
Operating under: Part 91
Flight plan: None
Mission: Personal
Flight phase: Takeoff / Launch
Airspace: Class D ZZZ
ATC / advisory: Tower ZZZ
Aircraft component: Engine
Component problem: Malfunctioning
Reporter organization: Personal
Reporter function: Pilot Not Flying
Reporter qualification: Flight Crew Commercial; Flight Crew Flight Instructor; Flight Crew Instrument; Flight Crew Multiengine
Human factors: Communication Breakdown; Confusion; Workload; Distraction; Situational Awareness; Time Pressure
Anomaly: ATC Issue All Types; Aircraft Equipment Problem Less Severe
Detector: Person Flight Crew
When detected: In-flight
Result: Air Traffic Control Issued New Clearance; Flight Crew Became Reoriented; Flight Crew Returned To Departure Airport; Flight Crew Took Evasive Action
Contributing factors: Aircraft; Human Factors; Procedure
Primary problem: Human Factors

Narrative: Late morning local time; myself and the Gyrocopter pilot were conducting a demonstration flight in a new gyrocopter recently arrived at the field and intended on staying in the pattern.  The pilot in command held a private pilot rating in ASEL with Sport Pilot privileges for rotorcraft gyroplane and Light Sport CFI for Gyroplane.  I was a non-rated gyroplane passenger holding certificates in Commercial ASEL and MSEL; instrument airplane; and CFI for single engine land.  There were at least one other aircraft (a Piper Cherokee) in the pattern which was turning for or on downwind for our takeoff.We were cleared for takeoff and on climb out at approximately 300 ft; the engine made a vibration similar to a miss in firing sequence.  I questioned the pilot as to the event in which the reply was not sure.  At about 500 ft; the miss in firing sequence occurred again in which I felt we were beginning to experience an engine failure and communicated my concern to the pilot in command who immediately [advised ATC] and requested an immediate landing.  At the time; the engine had less than 50 hours since new.  The discussion between the pilot and myself was to continue downwind hoping to at least pass mid field where we could auto rotate into the wind onto RWY XX should the engine fail completely. After [advising ATC]; the tower instructed the Cherokee to continue their approach for RWY XX (being we were supposed to be #2) and for us to also continue for RWY XX.  Nearly immediately; the pilot of the Cherokee questioned the tower asking if the 'should sidestep for the aircraft who [is having problems]' or words to that affect; which the tower then cleared them for the sidestep.Having worked in the ATC environment for nearly 8 years and flying for over 10 years; I expected the tower to issue us a 'cleared to land any runway' clearance and keep the other traffic orbiting.  At one time during our approach; the Cherokee was below us and occupying the runway where we would have had to auto rotate toward if the engine had actually failed. I believe this clearance was issued in poor judgment and created a potential traffic conflict.No problem was found with the engine and it did not exhibit the symptom again.  Succeeding demonstration flights were uneventful.




Synopsis: A passenger in a Titanium Gyrocopter reported hearing an engine misfire during flight. The pilot requested to return to land and ATC sequenced them behind other landing traffic even with a potential engine failure.