Aircraft shares (What do you think)
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Aircraft shares (What do you think)
Hi,
I'm toying with the idea of buying a share in a single piston aircraft... like 1/5th or something like that.
I like the idea of sharing a nice aircraft between a few members and not paying flying schools to use their aircraft on strict time schedules.
Does anyone on here have a share in an aircraft and if so are there any risks involved or advice to be given?
Some of the groups I've approached are asking for £70pm and then £75ph wet which I think is good if you can fit in a flight a week. (Based on C152'S and PA-28's)
A more few questions...
I'm aware that I'll have to pay £5000 - £7000 to join a group like this but if I choose to leave do I get the money back?
Also
If anything goes wrong with the aircraft are we meant to get together and pay for it on top of the fees we pay already?
or is it all covered by the monthly charges everyone puts in?
Thanks in advance,
SCA
I'm toying with the idea of buying a share in a single piston aircraft... like 1/5th or something like that.
I like the idea of sharing a nice aircraft between a few members and not paying flying schools to use their aircraft on strict time schedules.
Does anyone on here have a share in an aircraft and if so are there any risks involved or advice to be given?
Some of the groups I've approached are asking for £70pm and then £75ph wet which I think is good if you can fit in a flight a week. (Based on C152'S and PA-28's)
A more few questions...
I'm aware that I'll have to pay £5000 - £7000 to join a group like this but if I choose to leave do I get the money back?
Also
If anything goes wrong with the aircraft are we meant to get together and pay for it on top of the fees we pay already?
or is it all covered by the monthly charges everyone puts in?
Thanks in advance,
SCA
I'm a parallel and serial share owner - currently three syndicates, one of which I'm trustee of. For me it's an excellent way to do your private flying, and I probably rent for half a dozen hours a year now, and that when I'm abroad.
You'll find that even in a very big syndicate, availability is normally excellent - if anything 1/5th share is too much of the aeroplane, as in reality if you own 1/20th, probably a third of those people will actually fly the aeroplane at-all regularly, but all of them will still be paying their share of the fixed cost.
Usually, if you buy a share in a syndicate, you are buying it from somebody who didn't want it any more and is selling it privately (even if that was routed via the syndicate). The same applies when you don't want your share any more, and you are stuck with paying any fees up until the point when you manage to sell your share to somebody else. That is one of the facts of being a share owner - as are that you'll normally be expected to contribute to the effort of looking after the aeroplane - cleaning, maintenance, accounts paperwork - everything needs doing by somebody. There is also the risk (probably a certainty) that from time to time there may be an aircraft bill which goes beyond the capabilities of the syndicates financial reserves, leading to a cash call.
In my experience it's still the way to go - you get to know your aeroplane far better, get generally excellent availability (and can usually take the aeroplane away for a few days at a time without any problems), can potentially fly much more interesting aeroplanes, and should pay rather less for your flying than renting - certainly if you have plans to fly more than about 24 hours per year. But it's not a free lunch - you are trading risk and effort for cheaper better flying and need to be realistic about that.
G
You'll find that even in a very big syndicate, availability is normally excellent - if anything 1/5th share is too much of the aeroplane, as in reality if you own 1/20th, probably a third of those people will actually fly the aeroplane at-all regularly, but all of them will still be paying their share of the fixed cost.
Usually, if you buy a share in a syndicate, you are buying it from somebody who didn't want it any more and is selling it privately (even if that was routed via the syndicate). The same applies when you don't want your share any more, and you are stuck with paying any fees up until the point when you manage to sell your share to somebody else. That is one of the facts of being a share owner - as are that you'll normally be expected to contribute to the effort of looking after the aeroplane - cleaning, maintenance, accounts paperwork - everything needs doing by somebody. There is also the risk (probably a certainty) that from time to time there may be an aircraft bill which goes beyond the capabilities of the syndicates financial reserves, leading to a cash call.
In my experience it's still the way to go - you get to know your aeroplane far better, get generally excellent availability (and can usually take the aeroplane away for a few days at a time without any problems), can potentially fly much more interesting aeroplanes, and should pay rather less for your flying than renting - certainly if you have plans to fly more than about 24 hours per year. But it's not a free lunch - you are trading risk and effort for cheaper better flying and need to be realistic about that.
G
Welcome to Pprune. I am sure you will get lots of answers but, to get the ball rolling, here's mine.
Buying anything involves some kind of risk. The main risks in owning a share of any aircraft are:
That the owners do not work together to maximise serviceability and minimise costs.
That if something goes wrong you have to pay your share to fix it. Most groups build up a fund for major expenditures and, when you join such a group, your payment should cover your part of that. If the cost of repair exceeds the value of the fund, then all members will have to put their hands in their pockets.
In my view, buying a 5th share only makes economic sense if you do at least 2 hours a month - but when does our hobby ever make economic sense. It is worth it to be able to use the aircraft for longer trips than usually possible when hiring.
For a 5th share costing £5 -7K I would expect a pretty good PA28 or equivalent or an older Permit aircraft with a good engine fund.
When you leave, you should get your money back when the share is sold. This may take some time.
Buying anything involves some kind of risk. The main risks in owning a share of any aircraft are:
That the owners do not work together to maximise serviceability and minimise costs.
That if something goes wrong you have to pay your share to fix it. Most groups build up a fund for major expenditures and, when you join such a group, your payment should cover your part of that. If the cost of repair exceeds the value of the fund, then all members will have to put their hands in their pockets.
In my view, buying a 5th share only makes economic sense if you do at least 2 hours a month - but when does our hobby ever make economic sense. It is worth it to be able to use the aircraft for longer trips than usually possible when hiring.
For a 5th share costing £5 -7K I would expect a pretty good PA28 or equivalent or an older Permit aircraft with a good engine fund.
When you leave, you should get your money back when the share is sold. This may take some time.
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I would never consider it without a good solid legal binding contract. An even then, I would have my lawyer go right over it. Been doing business long enough now to know that getting involved with a bunch of unknown (even known) people can be trouble.
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When you leave, you should get your money back when the share is sold. This may take some time.
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Not all shares take a long while to sell, we have a waiting list for shares in our Ikarus C-42 group.
Shares in modern fuel efficient permit aircraft will tend to be more desireable than shares in old C of A gass guzzlers; our C-42 is £28 an hour wet
Shares in modern fuel efficient permit aircraft will tend to be more desireable than shares in old C of A gass guzzlers; our C-42 is £28 an hour wet
I'm in a large syndicate (over ten). We have an internet booking system and the whole thing works very well, with good aircraft availability - particularly midweek.
Before you buy into a syndicate, make sure there is a sensible syndicate agreement - signed by all parties. My previous syndicate included a couple of complete w@nkers, which eventually led to the whole aircraft being sold.
Happy flying!
Before you buy into a syndicate, make sure there is a sensible syndicate agreement - signed by all parties. My previous syndicate included a couple of complete w@nkers, which eventually led to the whole aircraft being sold.
Happy flying!
I've been in a Group for over 24 years, and it's the answer to low cost flying.
The only minus is selling your share can take time. For anyone who thinks a tight legal agreement is needed - look at the value of the share compared to legal costs. Consider what you write-off annualy in a car's value. I put my 2013 flying costs on another PPRUNE thread.
http://http://www.pprune.org/private...ml#post8546012
The only minus is selling your share can take time. For anyone who thinks a tight legal agreement is needed - look at the value of the share compared to legal costs. Consider what you write-off annualy in a car's value. I put my 2013 flying costs on another PPRUNE thread.
http://http://www.pprune.org/private...ml#post8546012
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Buying a share is the best way to enjoy cheap(ish) flying in an aircraft you like;
Depending on what a/c you buy (do you have an idea which yet?): if not rent a few different ones).
An ideal group number is 6-7 (max 20 by CAA rules)
You will find that any group members will be just as keen to suss you out to be sure you're not a shyster, as you seem to be of them.
It is vital that you meet as many of the proposed group in person (in a local hostelry over a beer is good).
A good group will have one or two officers (usually retired folk with time on their hands) and it helps if one has an eye for finances:
Most correctly organised groups have a monthly charge which takes care of the annual, any prop overhaul and builds an engine fund, while the hourly charge takes care of lesser things like 50 hour checks.
We've never needed a 'cash call' (I'm gonna regret saying that) but think about what you'll do if you suddenly have to stump up £2-3K if your donk lets go before the engine fund has plumped up.( your potential group members will certainly be thinking this of you)
Will you sell your share? Well it depends on where you are situated and on a ready supply of willing pilots in the area.
Our group operates in a pilot desert in East Anglia and a share usually takes 12 months to sell: But sell it does: Our latest share sold for £500 more than I paid for my share 18 years ago.
The post about having a legal document sounds a good one, though our group has operated on a gentlemens' agreement for 20+ years: The 'officers' are a useful group to take to one side any member who starts taking the pi ss.
One final thought: don't be afraid to be searching in your questions: ask if there's an engine fund and how much is in it. Ask to see the annual treasurer's report.
If you don't get satisfactory answers to these, just walk......
Cusco
Depending on what a/c you buy (do you have an idea which yet?): if not rent a few different ones).
An ideal group number is 6-7 (max 20 by CAA rules)
You will find that any group members will be just as keen to suss you out to be sure you're not a shyster, as you seem to be of them.
It is vital that you meet as many of the proposed group in person (in a local hostelry over a beer is good).
A good group will have one or two officers (usually retired folk with time on their hands) and it helps if one has an eye for finances:
Most correctly organised groups have a monthly charge which takes care of the annual, any prop overhaul and builds an engine fund, while the hourly charge takes care of lesser things like 50 hour checks.
We've never needed a 'cash call' (I'm gonna regret saying that) but think about what you'll do if you suddenly have to stump up £2-3K if your donk lets go before the engine fund has plumped up.( your potential group members will certainly be thinking this of you)
Will you sell your share? Well it depends on where you are situated and on a ready supply of willing pilots in the area.
Our group operates in a pilot desert in East Anglia and a share usually takes 12 months to sell: But sell it does: Our latest share sold for £500 more than I paid for my share 18 years ago.
The post about having a legal document sounds a good one, though our group has operated on a gentlemens' agreement for 20+ years: The 'officers' are a useful group to take to one side any member who starts taking the pi ss.
One final thought: don't be afraid to be searching in your questions: ask if there's an engine fund and how much is in it. Ask to see the annual treasurer's report.
If you don't get satisfactory answers to these, just walk......
Cusco
Last edited by Cusco; 4th Jul 2014 at 22:53.
I've always checked syndicate agreements against common sense, but never used a lawyer. 8 syndicates into my flying career, and a few headaches - I've never yet actually regretted not taking legal advice.
The three things I'd consider most important to check are:-
(1) What sort of people are the other owners
(2) What condition is the aeroplane really in, checking the aeroplane and the maintenance records thoroughly
(3) What's the availability like.
I do mentally write off the cost of any new share over 3 years - then if I can sell it one day and get money back, I consider that a bonus. The last share cost me £3,500, the aeroplane, a Stinson 108, did turn into something of a money pit, and we eventually sold the aeroplane - from what I got about £1200 back. In perspective, my "through life" spend on that aeroplane works out about £160/hr, on something that you couldn't possibly rent, but the nearest equivalent would cost abour £200/hr to rent. But with that, I routinely took the aeroplane away for days or even a week or so at a time - and that's just completely impossible renting.
My current touring share, an AA5a, I've owned 1/20th of for 4 years - my through life spend on that works out about £115/hr, compared to £150/hr to rent an identical aeroplane from home airfield. Drop that to £100/hr if I sold it tomorrow for the £1200 that the last share changed hands for.
My microlight shares - current (a Mainair Blade) and previous (a Thruster TST) both worked out around £45/hr through life.
G
The three things I'd consider most important to check are:-
(1) What sort of people are the other owners
(2) What condition is the aeroplane really in, checking the aeroplane and the maintenance records thoroughly
(3) What's the availability like.
I do mentally write off the cost of any new share over 3 years - then if I can sell it one day and get money back, I consider that a bonus. The last share cost me £3,500, the aeroplane, a Stinson 108, did turn into something of a money pit, and we eventually sold the aeroplane - from what I got about £1200 back. In perspective, my "through life" spend on that aeroplane works out about £160/hr, on something that you couldn't possibly rent, but the nearest equivalent would cost abour £200/hr to rent. But with that, I routinely took the aeroplane away for days or even a week or so at a time - and that's just completely impossible renting.
My current touring share, an AA5a, I've owned 1/20th of for 4 years - my through life spend on that works out about £115/hr, compared to £150/hr to rent an identical aeroplane from home airfield. Drop that to £100/hr if I sold it tomorrow for the £1200 that the last share changed hands for.
My microlight shares - current (a Mainair Blade) and previous (a Thruster TST) both worked out around £45/hr through life.
G
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You need to look upon share ownership philosophically.
If you want iron clad no risk agreements then you have to rent. But you have already pointed out all of the downsides of renting which leads you into the murky pool of share ownership.
I, like others, have been involved in several shares. The availability in all of them has been pretty much unlimited. As Gengis points out usually fewer than 25% of pilots put more than 5 hours a year on the frame. In one of my syndicates 6 out of 16 had lapsed licences. They pay, you fly.
Re agreements, for less than 10 k just write it off but you are likely to get all your money back when you sell ( or more.. Try that with a sports car!). There are agreements but I guess some will be tough to prove in court. The way I look at it is if I bought a £60k airframe ( or sports car)I could easily see a £10k bill at the first annual. Any money I get back on that 10 k is a bonus.
The best thing about syndicates is you get almost 100% of an airframe for a fraction of the cost and you get some very clever fixing knowledge. Do it and advance your flying.
Oh and buy something realistic. 152, 172, archer Cherokee, warrior, arrow. Buy something tidy, if the seats are ripped would you girlfriend be confident in flying it ( remember its girlfriends and wives who get a say when you sell). Also learn what TTE means, if it's near 1600 then there's a £20k bill and 6 months on the ground looming.
I have to conclude by saying I have had 5 fantastic syndicates. Even when an £8 k bill hit there were 16 of us and a fund so it cost £350 each. All the rest I've not had a surprise and I've had flying that cannot be easily rented(Cherokee, DR9, Pitts s1, Pitts s2, RV6). Now looking for an RV4/8. Syndication is the way of the nation.
If you want iron clad no risk agreements then you have to rent. But you have already pointed out all of the downsides of renting which leads you into the murky pool of share ownership.
I, like others, have been involved in several shares. The availability in all of them has been pretty much unlimited. As Gengis points out usually fewer than 25% of pilots put more than 5 hours a year on the frame. In one of my syndicates 6 out of 16 had lapsed licences. They pay, you fly.
Re agreements, for less than 10 k just write it off but you are likely to get all your money back when you sell ( or more.. Try that with a sports car!). There are agreements but I guess some will be tough to prove in court. The way I look at it is if I bought a £60k airframe ( or sports car)I could easily see a £10k bill at the first annual. Any money I get back on that 10 k is a bonus.
The best thing about syndicates is you get almost 100% of an airframe for a fraction of the cost and you get some very clever fixing knowledge. Do it and advance your flying.
Oh and buy something realistic. 152, 172, archer Cherokee, warrior, arrow. Buy something tidy, if the seats are ripped would you girlfriend be confident in flying it ( remember its girlfriends and wives who get a say when you sell). Also learn what TTE means, if it's near 1600 then there's a £20k bill and 6 months on the ground looming.
I have to conclude by saying I have had 5 fantastic syndicates. Even when an £8 k bill hit there were 16 of us and a fund so it cost £350 each. All the rest I've not had a surprise and I've had flying that cannot be easily rented(Cherokee, DR9, Pitts s1, Pitts s2, RV6). Now looking for an RV4/8. Syndication is the way of the nation.
G
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It's all in here:
Bedtime reading:
Group Ownership of aircraft | Aircraft Register | Operations and Safety
Cusco
Bedtime reading:
Group Ownership of aircraft | Aircraft Register | Operations and Safety
Cusco
