Buying an aircraft share - tips?

[Shunter]

Having been hiring from my flying school since passing my PPL, I've now pretty much established that flying for me is not just a passing phase. Hence I'm looking at buying into a plane to reduce hourly costs and eliminate the "must have it back by..." syndrome.

As it happens I've found one, a 172, not so far from where I live, which I hope to go and have a look at on Saturday.

Aside from the obvious things like engine time, accident history etc etc, are there any key points for a first time buyer to keep in mind?

[bmoorhouse]

Assuming the aircraft passes muster (you MUST have at least one hour trial flight as P1 to put it through its paces for which I would expect you should have to pay) and is priced correctly the MOST important thing is the other members of the group. Make sure that you meet them all BEFORE signing up and feel that you can get on with them - find out how long they have been in the group and why they joined and what they think about it now etc

You can run groups two ways - a very rigid and strictly enforced "contract" to make sure that everybody does their bit (like cleaning the plane, making sure it is refueled after every flight, etc. etc) or you have a much looser agreement and rely on the reasonableness of the other members to do their share.

My group is of the latter variety and depends very much on trust between members which works very well.

Make sure that any booking system used doesn't allow other members to "hog" the times when you want to use the aircraft (e.g. I can only fly at weekends but two other members only want to fly during the week, so conflicts are almost no existent).

Also make sure that the finances are in good order and are run "transparently" so that you can see exactly where the money goes.

Two other pointers are :-
1. to be happy with are the process for selling youir share if you want (how is the price set for example) and
2. what happens if a major repair is required for which funds aren't available.

The basic rule is commonsense - if it looks too good to be true then it probably is.

[Chilli Monster]

1) Make sure you get on with the rest of the syndicate. That's essential for everything to run smoothly. If you get a bad "gut reaction" to any of them then walk away.

2) Are they charging themselves enough. Buying into a cheap share with cheap outgoings is a false economy - it just means you're going to get hit with a big bill sometime down the road. If it's flown "dry" (you pay for the fuel, you also pay an hourly rate) then this isn't so much of a problem. However, with fuel prices going up you want to make sure that, if you're charged a "wet" rate, that this encompasses, fuel, maintenance, and engine fund.

If you're happy with the above then do it. You may not get much of a reduction in the hourly cost once you take into account monthly standing charges, but being able to go places at will more than makes up for that :)

[GK430]

I'm thinking on similar lines. Took a look at one recently.
I look forward to reading further advice on this thread.

What do the monthly charges cover?
What is the insurance excess? Will there be any premiums relative to experience.
Do the shareholders have a "say" in new members in the syndicate.
What happens if you all/some of you wish to change the aircraft?
What will happen to Drawback? To the individual or go in to group funds.
Engine TBO
Web based booking system?
Where is the maintenance being done?
Will it be up to the user to clean the aircraft?
What will happen who will decide on new installations (GPS etc.)

I look forward to hearing all the "iffy" elements of syndicates!

[Martin @ EGLK]

I'd recommend that you look at the maintrnance records.

Also, while looking at the hours, see when the next majors are. Things like the Star annual & next engine overhaul. Has the group got a fund for these things are they going to ask everyone to cough up on the date?

And ask to see the finances & booking sheets for the last/next few months. It's no good buying into a group that's in debt or where you can't book it till November. What are the rules/methods for booking?

[Shunter]

Thanks for that chaps, some very useful pointers.

I wasn't sure how the "test-drive" worked etiquette-wise, but I guess it's only fair of the group to expect me to want one (at my expense, obviously). From the telephone conversation I've had so far it seems to be a very friendly group, although I don't believe they have a web-based booking system.

Roll on Saturday and we'll see what there is to see.

[Martin @ EGLK]

re Test Drive.

It's quite common for the seller to charge for the test flight. It stops the non serious who are just after a flight.

It's also common(ish) to get that refunded/knocked off purchase price if you buy.

[Shunter]

Apparently there is actually no "seller" per se.

It used to be a group of 6 who all flew on a fairly infrequent basis. Now they're expanding to 8 in order to lower the monthly standing order to make it more easy to swallow for those who might not want to fly often.

I've been assured that availability is excellent.

[Genghis the Engineer]

Apparently there is actually no "seller" per se.

It used to be a group of 6 who all flew on a fairly infrequent basis. Now they're expanding to 8 in order to lower the monthly standing order to make it more easy to swallow for those who might not want to fly often.

I've been assured that availability is excellent.

Not an uncommon, or worrying situation - BUT do find out about the existing running costs, who is responsible for what, and what you'll need to do to pull your weight.

G

['India-Mike]

Far be it from me to disagree with Genghis :ok: but I'd take a slightly more pessimistic view of a group that's expanding from say 6 to say 8. Trying to get fixed costs down methinks, which could be a sign of something sinister rather than beneficial. Also, what's happening to the additional share capital?
Group ownership can be fantastic when it works well amongst a bunch of like-minded individuals. But there's no beating the fact that the best group is a group of one. I'm both, and the latter is much better (until you have to meet big capital expenditure!)
Good luck whatever you choose.

[Shunter]

I forget exactly what was said on the phone today, but I'm a very mathematical type of chap and what I heard at the time did make sense. I couldn't comment on capital dilution, but I do know that the plane has only flown in the region of 50hrs/yr in the last couple of years.

Jumping in with both feet is something that I certainly won't be doing. They might well get bored of me taking my time to fact-find and weigh things up, but if they don't and everything looks peachy, hopefully I'll be a happy chap!

The other option open is to buy something outright, base it at Leeds/Bradford (10 mins from home). Going from the amount of people seeking shares in aircraft there (despite the frankly obscene hangerage fees and hence potentially ludicrous fixed costs) I think I'd have little difficulty putting a group together, be it capital or non-capital.

[Pilotdom]

Id certainly buy in to a group at Leeds/Bradford.

Where is the C172 Share based? Im learning at Sherburn at the moment and if its based there may be able to do a bit of digging for you regards the aircraft.

Or is it the 172 at Barton? G-AWVA?

Ive seen this advertised and it looks a nice aircraft,shame im not in a position to buy just now,got to finish PPL first.

However,if you decide to go down your own route,I would be interested in talking to you about it and your ideas of aircraft etc.

[IO540]

One thing to watch for is defective equipment, which has been that way for some time. Often, groups start to fall apart because the members won't agree to pay for what some regard as essential and others in the group regard as unnecessary.

This is particularly relevant if you want to fly IFR one day (IMC Rating or an IR).

[Genghis the Engineer]

Far be it from me to disagree with Genghis :ok: but I'd take a slightly more pessimistic view of a group that's expanding from say 6 to say 8. Trying to get fixed costs down methinks, which could be a sign of something sinister rather than beneficial. Also, what's happening to the additional share capital?
Group ownership can be fantastic when it works well amongst a bunch of like-minded individuals. But there's no beating the fact that the best group is a group of one. I'm both, and the latter is much better (until you have to meet big capital expenditure!)
Good luck whatever you choose.

You've never worried about disagreeing with me before I-M, and I think I'd worry if you agreed with me too often.

Twice I've been involved in an expanding syndicate, once as a founder member, the second as somebody buying in. Both times the reasons were the same - the aeroplane just wasn't getting flown enough, and yes that was pushing the fixed costs up and everybody wanted to get them down.

But, in the one I was a founder of, both before and after, I rarely had trouble getting the aeroplane when I wanted -and in the one I joined, I think once in 6 months I've failed to get it when I wanted it. In both cases of-course, that was apart from maintenance downtime - which would occur with any syndicate.

Like I-M, I'm also both, I own a whole aeroplane, 1/12th and 1/8th; the aeroplane with the worst availability is the one I own outright, 'cos there's nobody to share the problem-solving with. (But that particular aeroplane, I just enjoy too much to share!).

G

[EGCC4284]

Shunter

You may find this idea interesting.

I believe the guy who runs this set up is looking to base aircraft around the UK.

Give him a call or e-mail him. He may base one in Leeds if the is enough interest.

The 3 aircraft he already has are based at Barton, Manchester.

They are very tidy pieces of kit.

http://www.aircraftgrouping.com/

Plus this other thread

http://www.pprune.org/forums/showthread.php?t=218153