djf777. It is a bit of a worry if you don't know whether you need a Baron or a Chieftain as they are totally different classes of aircraft. You can't simply "assume 500 hours per year"; as annual utilisation impacts very significantly on operating cost, you must define the task, identify the most suitable aircraft type and then calculate
accurate minimum annual utilisation.
Operating costs are calculated from two primary components:
Indirect Operating Costs: the costs you incur even if the aircraft does not fly: and
Direct Operating Costs: the costs directly related to flying the aircraft.
Indirect Operating Costs: - Debt servicing costs;
- Hull depreciation;
- Hull and passenger insurance;
- Provision for exterior/interior refurbishment; (min $5,000 - $8,000 pa)
- Pilot salary plus on-costs plus costs (IFR renewals etc);
- Hangarage;
Direct Costs:- Fuel & oil;
- Scheduled maintenance; (100 hourlies)
- Provision for unscheduled maintenance;
- Engine overhaul provision;
- Prop overhaul provision;
- Radio, Electrical & Instrument maintenance;
- Maintenance parts, (scheduled and unscheduled);
- ADs and other mandatory directed maintenance;
- Landing and parking fees;
- Enroute navigation fees.
Divide Indirect Operating costs by
minimum projected annual utilisation and add to the total Direct Operating Costs.
You may also need to add regulatory and compliance costs: the cost and time to obtain an AOC, regulatory documentation etc. You also need a business plan, budget and cash flow forecast.
The above list is not exhaustive. It has been 20 years since I played with piston engine aircraft operating costs and I've probably missed a number of cost components. I am far more familiar with turbine aircraft costs.
Total operating costs vary significantly between operators and are greatly affected by annual utilisation; operation type; fleet size etc. It is ludicrous to think you can "guess" your specific operating costs, or come here to PPRuNe and expect pilots to give you any real idea of accurate operating costs. With due respects to those who post here, the last person I'd ask for operating cost advice would be young starry eyed CPLs who has never had the pain of ownership.
Only successful aircraft owners who know the pain of real costs - think I've owned seven aircraft and managed a fleet of almost seventy aircraft - can give you accurate operating costs. Ask Chimbu Chuck, Jabba, FTDK etc.
It has been twenty years since I had anything to do with Baron or Chieftain operating costs (and on the basis of maintenance costs, I was never a Piper supporter), don't know current fuel and maintenance costs, but I would be very surprised if
accurate Baron total operating costs were less than $600 per hour and Chieftain total operating costs were less than $800 per hour, based on 500 hours per annum.
You then add a
realistic profit margin.
In a remote location, a wild guess would be a Baron charter rate of $750 - $800 per hour or Chieftain charter rate of $1,000 - $1,050 per hour. Anything less and you're probably joining the world of Australian aviation dreamers!
(I have another very rough "rule of thumb": An aircraft should earn a minimum of at least it's capital cost each year.)
Over the years I've owned aircraft, cruising yachts and classic sports cars, the rest of my income I spent foolishly. I can assure you with aircraft, yachts and sports cars the two greatest days in your life will be the day you buy and the day you sell!
