A syndicate question

[WelshFlyer]

I've seen some syndicates that operate more like a flying club - no "stake" payment/deposit/share cost, but at a fraction of the cost of flying clubs. I was wondering if such systems are common, and dose anyone have any experience of these syndicates?

Sometime in the next couple of years I'm going to need to absorb some pretty heavy flying for my CPL training. And with my passion for light/hobby aviation, I thought that this is a great alternative to your usual hard-slogg hour building in the States, Spain, ect. ect.

WF.

[IO540]

WF

I know this is stating the obvious, but on the assumption that the operating costs must be fully met somehow, there is going to be no difference between

1) a traditional syndicate (purchase a share, pay £X/month retainer, pay £X/hour wet) and

2) the plane being owned by one entity (an individual or a limited company) which simply hires it out at £X/hour wet

in the TOTAL amount of money which all the "members" end up paying in the long run.

I went through this stuff with my plane, which has been available on the latter basis to certain people. But to make it self-financing it would need to be rented for hundreds of hours a year.

There will be a difference in the cross-subsidy between members (or renters) who fly little and those who fly a lot, and (if renting wet) between those who fly full bore and those who fly frugally, and one could play around with that.

But I can't see a way to really cut costs, other than buying new (and disregarding the interest on the capital), or forgetting about building up engine/prop funds (perhaps OK on an old cheap plane which will be scrapped). I suppose if a club member was a licensed engineer who did the maint for free, that would help a bit more.

[Mike Cross]

I hate to suggest it but Article 130 (10) of the ANO (http://www.legislation.hmso.gov.uk/si/si2000/20001562.htm) is what you need to read.

You need a Public Transport CofA if you are going to hire the plane out whereas if the ownership meets the requirements of Article 130 (basically each member of the syndicate owns at leat 5%) then when flown by a syndicate member it counts as a Private Flight and you can do it on a Private Cat CofA or on a Permit.

As the operating costs of a Public Cat a/c can be considerably higher than Private/Permit it does have a bearing.

Mike

[Justiciar]

As the operating costs of a Public Cat a/c can be considerably higher than Private/Permit it does have a bearing.

Depends greatly on the type of aircraft. My syndicate runs a Cherokee on a Public CofA and the costs are not that different. The big difference between Public and Private is the amount of work you can do yourself on a Private CofA. That is not a real difference unless you have someone in the group technically skilled who can actually do the work.

Most syndicates are based upon shares, which means a capital contribution. However, even if you are lucky enough to find a group which does not require capital the costs will not be alot different, since the hourly rate is a function of the expected hours flown and the likely annual running costs including maintenance. The monthly charge will often be to cover the fixed costs such as hangerage and insurance.

One tip, do not part with any money until you have seen the group constitution, studied it thoroughly and also seen a couple of years accounts. Some groups are run in a very dictatorial way by one or two people who see the group as a way for others to pay for their flying. Talk to other members and indeed other groups and try and get a feel for how the group is run. A group offering very cheap flying is not necessarily the best one to go for. They may have no reserves and if there is a major problem everyone may be paying out £100s or in some cases £1,000s to put the aircraft right.

[Dan Winterland]

The one bit of advice I have is check the finances and the state of the aircraft.

Have the group maintained a realistic engine fund? You don't want to join a group with 1900hrs on the engine and only 2 grand in the bank. Also, check with an engineer to see if any ADs are due and have they been done on the group's aircraft - for the same reason.

Also, consider how the group is run. The best way is for the group to be run as a limited company with each owner holding a share in the company rather than a share in the aeroplane. One group I was a member of ran like that. It paid dividednds when the baliffs arrived one day to repossess one group member's 'personal aeroplane'. All they were entitled to was his share - otherwise we could have lost our pride and joy.

The upshot is that when you come to do the sums at the end of the day, you will probably find you haven't saved much money over hiring.

[IO540]

Mike Cross

As the operating costs of a Public Cat a/c can be considerably higher than Private/Permit it does have a bearing.

I think this must depend hugely on the type of aircraft. On a private cat you save on the servicing (but only if you do it yourself) and there is a potential saving in that I believe there is no need for a JAR145 / 8130 release form which can make some major parts e.g. a prop a bit cheaper. But on a PA28 or bigger the difference isn't going to be a lot on the whole picture, now that the old Public cat 50-hr time limit has been extended. And if you have a LAME in the group then the difference will be even less.

Justiciar

one or two people who see the group as a way for others to pay for their flying

I think you will find it will take an awful lot of renting out to get others to pay for one's flying. One can get a contribution from renting but a full recovery of all costs involves practically walking away from the aircraft and letting largely unvetted pilots wreck it (i.e. putting in on a flying school fleet). As a very rough guide you are looking at something like 300-600 hours/year of renting, for a full recovery. Anything below that, HE is doing YOU a favour. This is why privately owned planes which have been placed on a school fleet tend to be pretty decrepit.

[Justiciar]

I think you will find it will take an awful lot of renting out to get others to pay for one's flying

Yes, but thats not quite what I meant. I have a case at present where the aircraft is being used for training by a flying school, one of the owners of which is also a group member. The school is not paying full price and the other members of the group are paying the cost in terms of maintenance whilst the school gets the benefit of much cheaper rental, which of course is not passed on to the student.

I would suggest stearing clear of a group that tries to cut its costs by renting part time to a flying school, unless you are very familiar with both the group and the school in question. That sort of arrangement can only be benificial if it is closely monitored and controlled. If it does work then it can help with the costs where the aircraft is not flown by group members sufficiently throughout the year to generate the necessary income for the annual.

[Mike Cross]

Sometime in the next couple of years I'm going to need to absorb some pretty heavy flying for my CPL training.

As the original question was directed at simple hours building one of the cheapest options would be to buy an Evans VP1 on a permit (circa 3.5k), fly off the hours you want and then sell it.

If you are intent on doing it in a conventional 4 seater then I agree there won't be a huge saving.

However there are plenty of two seat tourers on permits whcih can be flown for not a lot of money. My current flying in a Luscombe cost me £4k for a quarter share, £45 per month and £27.50 per hour wet. Agreed, I would have to stump up my share of any unexpected expenditure.


Mike

[High Wing Drifter]

Have the group maintained a realistic engine fund? You don't want to join a group with 1900hrs on the engine and only 2 grand in the bank. Also, check with an engineer to see if any ADs are due and have they been done on the group's aircraft - for the same reason.
Not that I disagree, as finding such a group would make sense. However, it does seem a tad unfair as such an arrangement would mean that existing members subsidise new members. I would have thought that buying a share is much the same as buying any aircraft - cheap near the TBO, expensive 1900+hrs before and pay your share of the costs according to the amount you have put in.

I would imagine that the real benefit of the engine fund is that the aircraft can be serviced when needed without the need for the treasurer to go cap in hand around the group before booking it in.

[FlyingForFun]

HWD,I would have thought that buying a share is... cheap near the TBO, expensive 1900+hrs.Or, an alternative way of looking at it:

Each member contributes towards an engine fund. At, say, 1900 hours on the engine, one member decides to sell. The price of the share would be similar to the price with a brand new engine. For that price, the buyer is purchasing a share in an aircraft with a very old engine (which is worth much less than what he's paying for it), and also a share of the engine fund (which brings the total value up to what the purchaser is paying).

Thus the price of the share, consisting of the price of the share of the aircraft and the price of the share of the engine fund, should not vary very much over time.

FFF
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[IO540]

FFF

All agreed, but this assumes perfection in forecasting when the overhaul will be actually needed (could be well before TBO) and the cost of it.

So unless you get it exactly right, there is bound to be a subsidy between existing members and new members, and this could flow in either direction. In the same way as the inevitable subsidy by members who fly at say 60% power going to the members who fly flat out (if renting wet, which most people have to do due to lack of accurate and tamper-proof fuel flow totalisers)

I have to say however I can think of no solution to the original man's requirement other than what's been suggested: buying a very cheap aircraft.

[High Wing Drifter]

Agreed FFF and 10540. It is all swings and roundabouts when the cows come home, at the end of the day. It just so happens that I would rather keep my TBO money in Premium Bonds until overhaul day. However, our share is a very small group and the organisation of funds is not really an issue. Some jiggery-pokery is also required to avoid corporation tax if the group is a limited company. There is obviously a risk that one of the other members (not me surely) may suddenly get divorced and declare themselves bankrupt (or something more likely but equally inconvenient) at a critical time horses for courses I guess :)

One thing to also look at is what a flying hour actually means. Our share is charged take-off to landing. My point is that an hourly charge may not be the same kind of hour between groups.

[WelshFlyer]

I'm really inrerested in the VP1 - I have the time and space to build one, and when iv'e finished my CPL/Ir I'll have a nice little plane! (I have put a post on the PFA forum asking for more info and explaning my circumstances. Feel free to take a look!)

Dose flight time logged in a VP1 count to my CPL properly? I presume there are no hidden JAR rules and regs?

WF.

[shortstripper]

Hi WF,

I own and operate a VP2 ( although it's been stuck in the workshop for the last year :rolleyes: ).

Great fun, cheap aeroplane that everybody knocks ... but what the hell! it gets your bum in the air cheaply :D

They are full group A so yes it all counts toward a CPL, so it's fine to build hours. The only thing is, and this doesn't just apply to VP's but to all SEP's ... airlines will probably be more inclined to take on someone with more time on complex types or better still twins, than one with just simple a/c hours. I'm not a CPL so don't know this for sure, but I have a friend with loads of SEP hours and he seems less attractive than others with fewer, but perhaps more relevant flight time. Of course, the saving in money over club SEP's would allow you to go hire a complex twin in the US for a month or two to act in your favour ... so go for it!

Don't build unless you really want too ... It takes ages, detracts from your first priority ( getting CPL before too bloody old ) and will cost more than buying .... how do I know? ... guess :uhoh:

IM

[FlyingForFun]

WF,

As well as what shortstripper says, bear in mind that you can't fly in IMC in any PFA aircraft. Don't let this put you off - just budget for an hour or two a month renting a C172/PA28 from the local club so that you can get a safety pilot to sit alongside you while you put some foggles on to keep the instrument stuff current.

FFF
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[Genghis the Engineer]

But you can fly IFR, or simulated IMC in a PFA aircraft - it's just real IMC that's a problem.

So, as sole owner of a PFA aeroplane, there's nothing to stop you fitting such instruments (with PFA's approval) and flying any amount of IMC practice under the hood with a grown up in the other seat.

G

[IO540]

Can you fly IFR in VMC in a Permit plane in CAS (Class D)?

[Mike Cross]

The rules say Daytime VFR only, so the answer is no.

Mike