Is this a rip off ??

[wombat_keeper]

Iv'e always wondered if a flying school legally or ethically has the right to make a profit out of add on fees including landing fees, Air Services fees.
I have pretty good information on what it costs to use airfield facilities being an aircraft owner myself.
After seeing some invoices sent to a mate of mine recently I suggest that some schools are touching up their students.
Consider their training aircraft average 950 hours per annum each, average sortie is 2.5 hours landing fee charged at itinerant fee $ 28 ( not the negotiated fee most rational operators pay ) Air Services fee $ 12 thats 380 movements per annum and a total of $15200 collected from students that don't know any better.
Let me tell you that Air Services charge roughly $ 600 per annum for 1 to 150 take offs and landings from my designated class D field.
Not to mention he gets charged a fuel levy of 6 % hourly rate instead of having the balls to put it into the hourly rate AVGAS dose not fluctuate in price as much as MOGAS .
How dose that make you feel kids ? :*

[MyNameIsIs]

You may have partially answered your own question:

from my designated class D field

Most fees that you are talking about are because you are using services outside of your "home".

Some places absorb normal airways charges in hire rates, others do not because they generally stay away from CTA etc.

Much like landing fees- if your plane isnt based there, you often have to pay to visit. And because a lot of places are greedy, they charge an outrageous price which the schools pass on to the hirer because $50 each time to approach/land at other than their "home" is not factored into the hire cost.

[wombat_keeper]

In this particular example the only field that charges any fee is the home class D field no payment is made for use of any ALAs. no other controlled airspace is entered.
My records and other info i have sourced indicate that the actual landing fees across the board are very small compared to the PARKING fee don't get the two confused.

[TBM-Legend]

all businesses should make a margin on all cost inputs. Flight schools should be no different. They make a margin hopefully on all inputs; aircraft ownership/maintenance/fuel/insurance/admin/instructor/ why not airport related charges?? After all it costs to collect and pay these bills.

Making money from your business is a must [to stay in business]...

Does anyone whinge about KFC/McD's/Myer's making a profit on sales???

[Jabawocky]

wombat

Clearly you will make a great pilot but be a broke business owner.

I am sure that Tailwheel or a few others will back me up here, but every time you have a pass on cost...there is a PASSING ON cost. Trust me I run a business and I can assure you what the all up cost spread across all the transactions like this, and many others...such as processing the costs of Phone, Electricity, the tean and coffee, the milk, the stationary, the printer and fax the PC you log in to do your NAIPS with, the rent, the OHS / workers comp fees, the cost of actually invoicing YOU and processing/banking or reconcilling your payment, the BAS, the PAYG, the cost of processing fuel, aircraft rental, the airservices, AVdata the lawyers,......ohhh hang on how about the hours per year taken up with audits from CASA, OH&S....numerous other folk who want to take a peek at you.................

Thnk yourself Farkin lucky the add on fees are that low.

Lucky I am not at the office with the accounts system open......might have posted tripple that lot.......Where is HORATIO LEAFBLOWER.....no dout he will add a heap more.

Have a nice weekend now Y'all.

J:ok:

[wombat_keeper]

Im glad that you agree that i'll make a fine pilot jaba i can barely wipe the smirk off my face !:ok:
For the record when i work for my self my average margin is $356 per hour buying renovating and selling real estate. Im yet to go broke.
What i'm really getting at is weather or not it is legally and ethically permissible to make a substantial margin under the guise of " landing and Air Services Australia fees " I am not silly enough to totally discount your rationale in saying that it costs to invoice hold money send money etc.
In real estate for instance when you pay a convaencer to hold funds for taxes, stamp duties ,rates etc they do so in a trust account that does not pay intrest to them they itemise your account accordingly they are accountable and even liable for what they do.
This is what the world has agreed as being BEST PRACTICE the question is is the scenareo i have presented this evening what you call best practice ????

[Charlie Foxtrot India]

Not all airfields will negotiate the landing fee, which is separate to the Airservices fee, and still charged when the tower is closed. Often the aerodrome operator's fee and the airsevices fee are lumped together as one. Perhaps this is what was on your friend's invoice?
From what I have seen, a 10% margin is normal on landing fees collected. Fair enough, remember that many punters pay by credit card also, and the cost of checking the invoices when they come in for discrepancies is significant and necessary to keep them honest.

[wombat_keeper]

I have some of the invoices here hot off the press
the landing fee is always charged at $ 28 the Air Services fee is always charged at $ 12 on the invoice regardless of tower status.
Based on 380 movements per year using these figures you can estimate that that is a $ 15200 revenue stream per aircraft.
Air Services fee CAN NOT be anymore than $ 3000 at these usage rates.
Especially considering the FACT that no neighboring air space is controlled no other airfields charge fees they are all ALAs.

Dose anyone reasonably think that it costs $ 12200 per year to land a <1050 kg aircraft at 1 home class D airfield and send a few invoices that need to be sent in the cource of normal business anyway ?
Shall i give you a hint, it costs under $ 4000 for 380 landing movements
So it must cost $5200 to send 380 invoices ?? thats $ 13.60 each invoice
imagine if stamp duty was running at 25 % do you think people would be dancing on the street?
Basically it equates to everyone getting ripped off 25 %:ugh:

[Ejector]

which airport?

[tail wheel]

What i'm really getting at is weather or not it is legally and ethically permissible to make a substantial margin under the guise of " landing and Air Services Australia fees "

Why not? :confused:

They are effectively a retailer of the service and "legally and ethically" entitled to a margin on the product for their time, effort and risk.

In real estate for instance when you pay a convaencer to hold funds for taxes, stamp duties ,rates etc they do so in a trust account that does not pay intrest to them they itemise your account accordingly they are accountable and even liable for what they do.

Risk is minimal with trust account transactions. A conveyancer's profit margin, including his trust account operating costs, are included in his hourly rate or service fee. Most conveyancing in law offices is carried out by an articled clerk or conveyancing clerk, for which my law firm charges a fee equivalent to approximately $300 per hour, probably ten times their hourly salary.

Why is there a concept that flying training organisations should be non profit, charitable institutions? They are a commercial service providers, legally obliged to operate profitably and just as entitled to a profit margin on their services as any other commercial endeavour.

Is this a rip off ??

No! Profitably operating all aspects of one's business is Best Practice!

[PA39]

It is a grey area. There is an admin cost in processing these fees....time costs money. it is a little like adding a margin to any freight or shipping on goods, there is time involved in packaging and sending. If an operator is bulking up these charges and you're not happy with it.....change horses.

Operators rely on an honour system in regard to landings and fees, which at times may be breached. Add ons compensate for this also.

[Jabawocky]

thats $ 13.60 each invoice

Geeez how do they do it so cheap.

My average invoice cost....That bis for every customer invoice and all the associated purchases payments and processing, costs $95/invoice.

I remember years ago large company accounts seemed to average $60-70, so maybe that is more like $95-100 now too.

Airlines with web sales and check in probably stuggle to keep their average below $20-30 with massive volume V accounting cost.

I am glad to see you do well, but with your real estate dealings I suggest you are either making huge chunks of profit for very few transactional hours or not really counting your hours well. Regardless if you can make a margin buying and selling like that, the flying schools should too, and then the landing fees will be more like $1500 per flight! Coz they make bugger all from the rest.

Anyway.....my opinion on it...sounds not too unreasonable.

Cheers
J:ok:

[The Green Goblin]

You've got to be careful with these flying schools.

I paid $20 back in 2002 for a free VFG.

I also paid $50 per touch and go (there were 10) for a particular aerodrome. When I looked up fees in the ERSA it said that it was a once of fee of $50 per day which included as many touch and goes or landings as you needed on that particular day/flight.

Sometimes you need to keep the bastards honest. I was locked in on the 150 hour syllabus and was close to my CPL and considered it too hard to move to another school which would have been the lesser of two evils. I would however have gone to another school if I were pre PPL.

There is only one school I know in Australia with integrity where you can trust them at their word and most of the students seem happy with the product. Minovation in Jandakot. I wish I had of done my CPL there.

[Arnold E]

Hurmph! those costs dont seem all that much to me when compared to the plumber I just got in to do a job. $69 call fee (was during normal working hours and was booked) and $39 for every 15 minute block of time (or part 15 min block). was there for 2.5 hours.:{ Now those sort of costs make your eyes water. Makes our avionics services look cheap!

[Monopole]

Hurmph! those costs dont seem all that much to me when compared to the plumber I just got in to do a job. $69 call fee (was during normal working hours and was booked) and $39 for every 15 minute block of time (or part 15 min block). was there for 2.5 hours.http://images.ibsrv.net/ibsrv/res/src:www.pprune.org/get/images/smilies/boohoo.gif Now those sort of costs make your eyes water. Makes our avionics services look cheap! Dont get me started on plumbers. During the peak of the mining boom, tradies wouldnt even give a quote for a job. 3 plumbers I contacted where going to charge the call out fee and assess the job charged at 15min intervals, and if I didnt want to continue then that was the price.

Seriously though, $13.60 per invoice (if it take approx half an hour per invoice in total. I dont know but just a guess), then that wouldnt even cover the salary of a full time account clerk.

[wombat_keeper]

Thats right Gobblin you do need to be careful with these schools

I know for a fact that there's a lot of well run and financially viable schools out there including good old minno's these are the type of inderpendant schools to see if you want to stay away from the flying college scene ; thats not to say that flying colleges don't have some advantages however, they tend to have their own "exclusive sylabus" where the grade 3s tend to be more pro active in getting their students through in minimal hours partially because they don't want to be seen as incompetent as they are seeking to climb the greasy pole, opposed to the hour hungary mercenry type found in some inderpendant schools especially when their paid stick time only. Colleges tend to own their own aircraft fleet with uniform standby aircraft avail at most times they also tend to do their maintenance in house bringing greater efficency.
If I was looking for a flying school nowadays knowing what i know now i would talk to a lot of people and shop around terms and conditions do vary tremendously.
Always bear in mind that they need you more than you need them its sad to say however that an empatatic attitude is a common trait of certain GA schools

[Super Cecil]

Anyway.....my opinion on it...sounds not too unreasonable.
Cheers
J
I agree, maybe even didn't charge enough. They should have charged you for Carparking (By the minute)
Radio wear
Toilet use/replacement water
By charging you for VDO and only putting airswitch time on the MR they are getting you into the ready mindset of GA
Airside access
These are all things that should be charged by the shrewd, forward thinking and caring flight school. Any other ideas? :rolleyes:

[Arnold E]

Hmmmm, you see to be upset at paying too much, yet at the same time people here grizzle about being trained in old clapped out pieces of junk. Now it seems to me, that one could only complain if one was being trained in said "old clapped out pieces of junk" AND paying high fees. Now if you want to be trained in the latest whiz bang aircraft, then you are going to have to pay for that arnt you? :confused:

[Pera]

A small extra for the cost of passing on the fees may be appropriate but putting a margin on a landing fee is unethical.

The company isn't adding any value to the fee, they are not warehousing it, delivering it, packaging it, etc.

In the end though it's the all up cost that matters not how it's made up. The problem is if the charge is hidden.

[wombat_keeper]

Whilst im having a b#tch i would be interested to know if anyone thinks that
an all up hourly NAVEX rate of a tad under $ 300 PER HOUR LOG TIME is reasonable for a crusty 30 + year old single ??

If one can not make a claim against the " school " when its sitting in the shed in bits ,despite loosing money to maintain agreed lesson time's having not been advised before hand that it a no go how can said operator DEMAND a levy of
$ 700 to off set their CASA ( ATO ) compliance AND a FEE of $ 700 per PPL flight test ?

THIS EQUATES TO $1400 FOR A FLIGHT TEST BEFORE THE PROP SPINS.

Could i invoice my employer a levy for me to maintain my drivers licence because they want me to drive a company car yet ply for business claiming i am licenced to drive before i am ????

WHO THE HELL DO YOU SEE WHEN SH#T HITS THE FAN LIKE THIS ??

[tail wheel]

WHO THE HELL DO YOU SEE WHEN SH#T HITS THE FAN LIKE THIS ??

If you don't like the price asked for a product, in our democratic, free market economy, you find an alternate supplier. That is competition.

Arnold E has it in one. :ok:

[Biggles_in_Oz]

wombat keeperan all up hourly NAVEX rate of a tad under $ 300 PER HOUR LOG TIME is reasonable for a crusty 30 + year old single ??Lets see now,
some variable costs are ;
reconditioned engine at around 30k over 2000 hours [$15/hr]
2 prop blades at around 15k over 1500 hours [$10/hr]
Fuel at (say) 30 l/hr at about $1.8/l [$54/hr]
100 hourly at $2000 [$20/hr]
which makes the motion subtotal $99/hr

Now, lets add some static costs ;
parking $4k/pa
insurance $5k/pa
repairs (allow) $5k/pa
building rental/repayment/leases (allow) 2k/month
non-flying staff $40k/pa
accountants/inspections/GST $10k/pa
which makes the static subtotal $88k/pa

If the aircraft flies 200hrs/pa, that makes the static cost about $440/hr making the grand cost total about $540/hr

so., actually your $300/hour is a bargain.



The above is obviously not true for every school or aircraft, and i've omitted stuff such as painting, interior refurbishment, avionics upgrades, etc, etc., but [wombat keeper it does give you an idea of just how freaking expensive it can be to operate an aircraft.

[PA39]

The biggie.....unscheduled maintenance!

[NOSIGN]

Perhaps the invoice needs to be itemised transparently Wombat, i.e third party services ($ tell it like it is), organisation invoice and processing fees ($xx.00, or $xxxxx.00)?

Tea and bickies should always be complimentary/ duty of care/ by donation.