Originally Posted by
Clare Prop
How dare those evil flying schools try to make a dollar! We should be doing it for the love of it and living under a bridge!
As an example, an aircraft hired on VDO will do about 115 revenue hours for every 100 hours in service. Therefore the gross margins are calculated on 115 hours/100 hourly. So if the hirer wants to rent it on tacho, no worries, but you will pay 15% more per hour.
If you want to buy fuel in Forrest, you pay the difference between that and the local rate so a hire wet or dry won't make any difference.
As for the economics remember that if the operator is on a 15% margin, that's just nine minutes in every hour that is covering fixed costs and maybe evilly making a profit. Agreed this is the sort of thing that CPL students should be aware of. So run an aviation organisation for 20 years and then get back to me if you have a more clever way.
Absolutely nothing wrong with flight schools not being charities and actually thumbs up to those that are profitable in this day and age.
But charging at a fixed rate on VDO is skewed and does not generally benefit flight training in my opinion.
As you seem well versed in the mechanics flight school operations, here's an honest question. How about charging for lessons as follows:
Lesson bill = lesson base price that covers aircraft fixed costs (insurance, parking, landing fees, etc.)
+ fuel used ╳ fuel (daily/weekly) rate
+ oil used ╳ oil cost+ tacho/airswitch time ╳ hire rate which will cover variable aircraft costs such as maintenance, engine overhaul, etc.
+ VDO time ╳ instructor rate in flight
+ pre- and post-flight briefing time ╳ instructor rate on ground
where all the rates are transparent and worked out so that, in the end, a margin deemed adequate to run the business is yielded.