Shared Ownership - Help!!

[Mickeymost]

Hi All,

I am a relatively new member to PPRuNe, so please be gentle with me!! I am thinking of offering shares in my machine but know very little about grouped ownership of helicopters. It's a turbine, which might limit the market a little, I guess, but any ideas any of you guys might have (or any pitfalls I should watch out for!!!!) would be greatly appreciated.:)

Thanks.

[stringfellow]

mickey,

if you look at past threads there is a great one on shared ownership... and the pitfalls!!! is it a jet ranger you have??

[Mickeymost]

Thanks, I'll have a look around. Nope, it's an Enstrom 480 - great entry machine to turbines - I've had a lot of fun in it.

:ok:

[Anthony Supplebottom]

In a sentence - its ALL about the quality of the people who you agree to share the heli with. Are they idiots or are they decent? And of course their flying skills and airmanship practice - will they behave responsibly and with care or be sloppy and take risks?

Choose wisely.

[Mickeymost]

Thanks - I was in a fixed wing group some years ago and your words definitely chime with some of the experiences I had then. I would certainly rather have the right man than the right price!!

[JTobias]

All

Love the 480 great first turbine machine, (in fact it's a great turbine full stop!) nice and stable, very forgiving and also looks the part. Ive got a few hundred hours on them and also owned a part share in one. PM me if you want any info.

Joel :ok:

[Mickeymost]

Thanks Joel - it is a great machine, it has taught me a great deal about flying and critically how to fly a turbine.

:ok:

[Clitheroe Kid]

I fly a Hughes 500 with 2 friends and would consider increasing the group to 5 if we could find the right people. Figures we had in mind are £400/pm and £150/hr wet. It's hangared at City Airport Manchester (Barton). pm me if interested.

Steve

[readgeoff]

Hi Mickey

I am in a shared group out of Denham with 9 others running a R44 clipper G-NIOG and it has worked out really well.

PM me if you want the contact details of the guy that is running it for us as he will be able to give you all the ins and outs of making it successful.

Cheers

Geoff

[readgeoff]

£150 wet for a Hughes 500?

Who wouldnt want to join that group !!!

[Clitheroe Kid]

Yes, £150 p/h is correct. I was in an Enstrom 480 group for 6 years. We charged £300/mth and £125 p/h wet and it worked quite well.
I base my costings for the Hughes on fixed costs of about £25,000 which would cover hangarage, insurance and annual inspection. All split between 5 group members. The £150 p/h would cover the fuel and minor engineering work. You have to accept that a large bill will come along every now and then, but at least it's split 5 ways.

The machine is G-LEEJ. Happy to send pics to 500 fans. Just let me have an email address.

Steve

[DaveKnell]

If anyone knows of (or is interested in helping to start) a helicopter group in or around Cambridge, then I'd love to know!

--Dave

[md 600 driver]

clithero kid

theres not much left after paying for jeta1 how do you go on when someone has to fuel down south

[timprice]

We run a Enstrom 480 at Shoreham and are thinking about a group, any one interested down South.:rolleyes:

[FLY 7]

I run an EN480B and agree that, for many private pilots, it's the perfect helicopter - safe, secure (especially when windy), easy to fly, spacious, comfortable - and, of course, that lovely RR turbine.

But, for shared ownership, I would start with one co-owner and then gradually add others, one at a time if necessary. The priority is that all the owners share the same philosophy towards maintaining the helicopter, taking perfect care of it, and dealing with the inevitable expenditure.

[mickjoebill]

It seems from responses that monthly and wet figures don't cover all maintenance expenses?
How much would need to be added to the monthly figure to create a reserve that covers typical nasty surprises?


Mickjoebill

[timprice]

From our experience's on the Enstrom 480 £350/hour, but if something unforeseen should happen, like blade delamination etc you might need more.

[JTobias]

Guys

You need to find the balance really between a high hourly rate (which has the potential to put you off flying) or a low rate with "cash calls" when surprises crop up.

Unfortunately, there is no perfect solution as some people prefer the lower hourly rate whilst other prefer a higher rate which leaves a contribution to unforeseen maintenance accruing in the pot.

Either way, helicopter ownership costs and which ever way you slice and dice the numbers, the cost will be the same.

Joel :ok:

[Clitheroe Kid]

Our group costs of £400 pm and £150 ph don't come near the true cost if you added lifed components into the mix. Like Joel says, Higher hourly rate or cash calls. providing everyone in the group has about the same usage, it's not a problem.

[nigelh]

Out of interest what happens if you wish to leave the group ? What if your timing was say just before a big annual with some new components needed ?
What if you want to leave just AFTER a major overhaul which you have partly paid for ? I have only shared once many years ago on a 206 ....this was shared ownership so you both share in the cost and the fluctuations in value .
If you fly say more than 4 hrs a week in the summer and do weekends away this will not be for you . If you just want to have a play around every now and then it's fine . What would be great would be access to a small fleet of say 4 aircraft to spread the risk of overbooking and being in maintenance ...I would like a109 ,
MD500 and a 206 to choose from !!

[Mickeymost]

Some very interesting and useful views. If anyone is interested in a share in an Enstrom 480 based at Manchester Barton, please drop me a pm. I have done some fantastic flying in it from Snowdonia to Scotland but it would be nice to have some company to fly with and share some of the costs.:ok:

[JTobias]

Nigel

It's like anything that you own a share in, if you manage to sell the share before the annual then you simply transfer the liability of any cash calls to the new owner. If you don't sell it, then it's your responsibility to pay your share of the bill.

I guess we'd all like the opportunity of having a fleet of aircraft at our disposal (actually I do ! I'm fortunate enough to have the keys to 4 helicopters in my car 2 Robinson R44's, an Enstrom 480 and a Jet Ranger, and I have access to a 500 too) but the reality is that it's very unlikely a group similar to the one you describe will ever be formed.

My access to aircraft is very healthy because at City Heliport where I am based the various owners are all friendly with each other and we spend time ferrying each other to maintenance etc . I've let my friends use my machine for type ratings and LPC's etc and in return, I get access to their machines too. This is traditionally done on a "no money is exchanged" basis too. However, I will admit its a very, very unique situation but has always worked very very well.

Joel :ok:

[Mickeymost]

I would second that. Barton is a terrific place to own a helicopter - great bunch of like-minded flyers!!

[nigelh]

So that will be 2 helicopters then Joel :ok: ( I don't count the Robbos !!)
I only have 3 to call on , MD500E , A109 and Dauphin. My favourite being the 500 :ok:
Ps. If you are not buying and selling shares in the machine I still don't understand what is to stop you just walking away if a monster bill turns up !!

[JTobias]

Nigel - you can't say that !!!!

Joel :ok:

[stringfellow]

Id love to be part of a syndicate one day couple of questions.

Does the syndicate buy the aircraft initially?? £400 a month sounds great for fixed costs etc but who buys the aircraft in the first place?? Is a contingency built in for depreciation?? And i agree what is to stop say half the syndicate bombing out just before a major unforeseen maintenance issue??

The key to this must be the integrity of the stake holders.

[007helicopter]

i agree what is to stop say half the syndicate bombing out just before a major unforeseen maintenance issue??

Because I imagine they would be equity owners and not wish to lose their equity.

I am in a great three way share fixed wing that has worked perfectly for 5 years on a very simple agreement, in reality we should be more formal but it does come down to who you partner with.

I have been looking for some years for a Helicopter share in Kent but very few and far between.

[Mickeymost]

Honour and integrity might do it - or maybe a watertight contract!!! I prefer the former!!!:ok:

[Flyting]

Honour and integrity Those days are long gone :(:(:(
That will get you burnt... In my experiences, there is a lot of talk about it but it often dissappears at the most convenient times for the other party...:ugh:
So, like you say.... a watertight contract

[JTobias]

Hi All,

In one hand I agree that a water tight contract is the answer, but I have to say that when I bought my very first share in an aircraft it was with 4 people that I had never met before. There were no contracts, no written rules, no nothing and for the whole time I was in the group, there was never a wrong word between any of us. Two of those original shareholders are still very close friends to this day (not that I've fallen out with the other two).

I would say that if a shareholder reneged on their part of their obligations, then you should suspend their access to the aircraft until such a time as they have brought their arrears up to date and/or dispose of their share and deduct the arrears from the sale price. This would obviously be an extreme scenario, but any rules you have should provide for it.

Joel :ok:

[Mickeymost]

I think there needs to be a balance struck between honour, understanding but with some basic Heads of Terms on such elements as usage, cost split etc. Seeking redress via a legal route is always painful to all parties (not to mention expensive), but in my experience you would need a Chinook to lift a contract that covered every eventuality!! :ok:

[Three Blades]

Please don't let enthusiasm and emotion get in front of your business head.
What happens if you have just paid out for your share of a big service and then the true legal owner just flys off with the machine ?
Or what if you fly very little one quarter and then there is major works to be done.
You really must get a legal document in place. Who is the legal owner ? If you set up a company to do this then who are the directors and shareholders ? What happens if you want out ? How are voting right split ?
The list goes on but, in the current economic climate when people may appear to be flash with cash one moment but bust the next, I would prefer to take the time to get something more formal than a handshake in place.
Yes, I have been there. I let emotion run ahead and did not have a firm contract. All worked out just fine in the end as I was dealing with decent people but you can feel very exposed at times wondering if you will ever get your money back. I would not do it that way again as, with most things helicopter related, any dispute is likely to involve a sum of money far greater then the cost of a lawyer to draw up a contract.

[Mickeymost]

Thanks Three Blades, you are of course absolutely right. The helicopter community is one of the finest group of people I have ever come across but I'm sure there are exceptions. I will be setting up a newco and will get an appropriate shareholders agreement drafted.

[parasite drag]

"The helicopter community is one of the finest group of people I have ever come across but I'm sure there are exceptions"

I'm not a Robbo-ist but I believe they have a painted white line that goes out of alignment in the event of an overspeed on start.

I heard a tale once that a group share member oversped the machine, and then scraped off and re-painted the line !

That might be an urban myth type story, but you get the idea...money, or the fear of having to lose it/pay it out can do strange things to a community's most fine citizen !

[Mickeymost]

Nope, you're right. I give up!!!

"Enstrom 480 For Sale - one disillusioned owner".

[Clitheroe Kid]

I have been involved in several groups over the years. Large and small. Fixed wing and rotary. All except one were set up as limited companies with all the group members as equal shareholders. The only major problem we ever had was when one member could no longer afford his monthly subs. We agreed his share should be sold and we deducted the arrears from the proceeds.

[Mickeymost]

Thanks CK. I will bear that in mind.

[Aucky]

1/3rd share in an exemplary R44 Clipper II, bladders, night kit etc, North West London. Great setup and co-owners, full details available by PM or email ([email protected])