Costs............(Merged).

[MLS-12D]

£100/hr! :uhoh: I knew it cost more to fly in the UK, but that is ... astonishing!

I rent a PA18 and PA28 for C$120/hr, inclusive of taxes, local landing fee, etc. At current exchange rates, that works out to about £49.

Relatively speaking, I am apparently getting a bargain. I must tell my wife that flying is practically free over here! ;)

[FlyingForFun]

MLS,

Why do you think so many of us head over your way to fly?

Although we do generally tend to stay further south and visit your cousins in the southern US, in the (probably mistaken) belief that hotter weather must be better flying weather.

FFF
-------------

[Evo]

£100/hr! I knew it cost more to fly in the UK, but that is ... astonishing!


Sad thing is that a club aeroplane at £100/hr incl. landing fees is quite cheap for the south of England... :{

[englishal]

Yea, you can rent a similar standard Warrior II (where I normally rent from) in the US, for $71/hr wet. That equates to £38.51 at todays exchange rate :ooh:

Bearing in mind a flight LHR to LAX is around £270 at the mo, if flying more than 4.39 hours, its worth me getting on a plane, heading out to LA for a long weekend of flying......Infact, what a bloody good idea, anyone else fancy a 4 day weekend in California? :D

[MLS-12D]

Does anyone know why private flying is so much more expensive in the UK?

I assume that gas costs more in Eurupe, but sure that can't account for the average per-hour rental costing twice as much as here in N. America (btw, gasoline in Canada is more expensive than in the USA, even though Canada is the USA's largest oil exporter ... go figure! The higher prices here must reflect our higher taxes).

Most aircraft parts come from the USA, so they should not cost any higher in the UK, except of course for the shipping expense.

As Britain is far less litigious than America, I would think that aviation insurance would cost less, not more.

Your thoughts, anyone? :confused:

[BRL]

Tax.

[MLS-12D]

There has to be more to it than that.

Correct me if I am wrong, but I believe your VAT is currently 17.5%. We pay 7% GST ("Goods and Services Tax), plus provincial taxes (8% in Ontario). The 2.5% difference should not result in 2x the cost.

[Gertrude the Wombat]

Also the capital costs of the aircraft are twice as much in the UK as there are only half as many flying days. Visibility 900 metres round here today, except when it was less. Last weekend it was low cloud, weekend before it was windy.

On Vancouver Island I was told "we fly 365 days of the year here, so you don't need to worry about weather stopping you flying". They do too. (Of course it helps not having any low flying rules, and knowing your way around sufficiently well that 900 metres visibility doesn't stop you flying.)

[J.A.F.O.]

I apologise in advance if this has been covered 1000 times before but I was reading through some threads that mentioned prices for aircraft hire here (UK) and overseas and I bl@@dy well want to know why it's so expensive.

Looking around it's about £100 an hour to hire a four seat single engine aircraft, when I first hired an aircraft (1986) it was about £80, so I thought £100 nearly twenty years later wasn't that bad but when I eventually opened my eyes and saw that it was less than half price elsewhere in the world I started wondering why.

Fuel costs can't account for it, we're not a particularly litigious nation so it can't be insurance against that. Are aircraft twice the price to buy in the UK? Is there too much red tape which hikes the price up? Why?

So, wherever you are, how much do you pay? And why?

:* :{ :ugh: :confused: :confused: :confused: :confused:

[IO540]

Which countries are you comparing the UK against? The USA is the easiest example.

In the USA, fuel is about 3-4 times cheaper, and that makes a big difference, especially on a very old plane whose investment cost was written off a long time ago and which is maintained to the absolute minimum standard (as most rental spamcans are).

Then there is a load of smaller factors between the USA and the UK. For example, typical Cessna/Piper parts are made in the USA and by the time they get here the price has doubled due to CAA-required documentation alone - higher still on small items like gaskets. General import messing about, the standard rip-off UPS/Fedex/DHL shipping costs (say £50 for a small package) and bonded warehousing don't help. On big things, I once paid £11k for a prop (with JAR145 paperwork) which in the USA listed for US$9000 - much of that 2x price difference was due to distributors having the UK market tied up and the US supplier not being able/willing to supply it with suitable paperwork.

But if you are comparing a UK rental price with e.g. a Swedish rental price then I can't help you :O

I know what it costs to run a new complex retractable though. If I was renting it out indiscriminately (like schools do), then the rental rate would depend hugely on the utilisation. If you can put 600hrs/year on it, you can rent it for perhaps 1/3 less than if you put 300hrs/year on it.

Things like insurance/hangarage play a very small part, a few quid per hour at most - but only if again the plane is utilised.

[IO540]

Someone else has just started another thread about costs...

Re club membership, I don't think this is ever mandatory for legal reasons. With a Public CofA plane, anybody can rent it (subject to ratings, diff training, insurance etc). With a private CofA plane, only shareholders can fly it and each shareholder must have 5% of more (i.e. 20 max). I have a plane which I can rent out freely and, when it was insured for that, there was no "club" requirement.

I vaguely recall there is a rather odd CAA requirement in that flying events (e.g. club flyouts) may be advertised only on a club noticeboard...

Obviously a school wants you to join because they get some £50/year that way, for each person who does or doesn't ever turn up.

[flying school sec]

We can rent you PA38 or a C172 and you dont even have to be a member. You get free membership to the club for a month if your a member of another flying school.

[Whirlygig]

The costs of flying in the UK compared with say, USA, Canada, South Africa etc are down to much more basic economic reasons.

Firstly, we are a very small island and don't have the commercial need to fly around as much as you do in America, Australia etc. Hence supply and demand rules will mean that there are fewer operators.

Secondly, you need to look at the overall costs of living. An operator needs to make a profit. Out of his revenue, he will have to pay salaries and rent for example. Property prices are very high in the UK (again, because we live on a small island).

If you compared the net profit margin of a UK operator and and US operator, I doubt whether they'd be much different!

Cheers

Whirlygig

[englishal]

Aviation fuel is cheaper in the US. For example, a US Gal may cost $2.40 which equates to 63c per litre or 34p at todays xrate. I normally pay around 80p a litre here, so fuel in a 10gph Cessna in the UK will cost £30.40/hr and in the states £12.92/hr.

There is a difference of roughly £60/hr between say an 8gph Warrior II here and the USA, of which the fuel costs £13.98 more per hour in the UK, which still leaves a gap of £46.02 between the UK and US.

I can only assume that the higher ownsership costs can be attributed to higher maintenance costs (CofA every 3 years, as opposed to never), higher initial purchase costs - though I don't know why anyone would allow themselves to be ripped off by buying a more expensive aircraft in the UK when they can go to the states and buy one cheaper. Import duty on an aircraft is 0% though you must still pay VAT.

I can't believe that cost of living between the UK and say California has much to do with it. As an example, buy a house in Cali, a reasonable area and you're looking upwards of $400,000. Car insurance is not cheap, medical insurance, super market prices are comparable the only cheaper thing is fuel.

Maybe it is just a classic case of "rip-off-britain".....

EA

[IO540]

Whirly

You've picked up a good point, the # of planes one is operating. It is clear to me that the cheapest way to run planes is to own a number of identical/similar types, be a licensed engineer and do your own servicing, buy replacements in decent quantities. Let's say you need a panel resprayed; you do all 10 at the same time and it will cost hardly more than doing just one.

Those people who have made money renting out planes (30 year old cans usually, so bad you wouldn't fly it if you owned it) to flying schools have tended to be in that category - I've met a few.

Taking this to a closed group, the planes can be on a Private CofA and if somebody is able to do the maintenance then the operating costs drops quite a bit. This would be a pretty cost effective way to run a club. The 5% min share is a non issue if you run more than one.

But I don't agree about fewer operators simply being worse. The number of operators needs to match the demand. I know of an airfield where there are around 6-8 fixed wing operations. The # of customers is perhaps enough for just one. So all of them are permanently verging on going under. (Incidentally you can imagine the politics there - the rumour mill from that place occassionally surfaces even here :O ) At least 1 operation goes bust there every year, some in a particularly messy way, but in GA there's always somebody else who wants to have a go.

Taking this to the UK as a whole, this is a large factor in our decrepit GA scene. There's always somebody who wants to play around in this (at the supply end, or the customer end) but those at the supply end are usually doing it without any business sense, and those at the receiving end tend to be skint anyway. Now, if those operations at that field were replaced with just one, properly managed and equipped, it would be an extremely successful operation, easily running a dozen £150k planes and doing so at prices no higher than the cheapest UK spam can rate.

Englishal

A CofA is some £600. At 500hrs/year, that works out to 40 pence per airborne hour. The name of the game is utilisation, utilisation and utilisation :O The other things all help of course but without utilisation, it's all a waste of time.

[Whirlygig]

If anyone knows the net profit margin of a US/CA/SA/Aus operator, I think that would be interesting.

I know of a very reputable fixed-wing and helicopter operator who just about break even each year; last year their net profit margin was half% - so it's not the operator being greedy or being a rip-off. The issue lies with costs including overheads.

However, the revenue disclosed by the operator does not include taxes (of any kind) since these are passed onto the government from the end-user (the customer).

Less demand will mean fewer operators and fewer benefits from economies of scale.

Cheers

Whirlygig

[S-Works]

Don't be surprised at less than 1% profit margins. The company I work for turns over £8billion yes billion a year and makes 1/4 of 1% profit. Profits of £38 million last year. My budget is greater than the operating profit of the company.

I guess some business are just never meant to make you rich, but our company employes 40,000 people in 2000 sites.

[IO540]

bose-x

If it is a manufacturing operation with sales of 8BN then their gross profit (i.e. sales minus factory transfer price) is probably of the order of 4BN. The other 4BN is a contribution towards their fixed costs which, with a good accountant, will be 4BN also. To do anything else is just wasting money on corporation tax and dividends to shareholders :O

[J.A.F.O.]

I never intended to imply that operators in the UK were raking it in hand over fist while their American counterparts did it for the love of flying and the joy of sharing. I am well aware that the best way to make a small fortune in aviation is to start of with a large fortune. I just wanted to know who was getting my money.

If it's £40 an hour in the US and £90 per hour in the UK then someone is taking £50 off me for no apparent reason. I'm prepared to believe that that is £10 for shipping parts, £10 for the supplier of the parts, £10 to the CAA and £20 to Gordon Brown. I just wanted to know and I have, to some extent, got my answer, thank you all.

:eek: I still think it's bl@@ding disgraceful, though :eek:

[bluskis]

Bosex
40000 people in 2000 sites does not seem much like economies of scale, 20 people per location?

10540, £600 is what I pay the CAA for the CofA, the cost of the work is much greater.

[S-Works]

Bluskis,

Depends on the business! When you are a high street retailler you need the staff in the shops to operate the tills!!

The margins are incredibly small. If it takes more the 4 minutes for a pallet of ciggs to be unloaded then the staff costs outweigh the profit.

[IO540]

bluskis

£600 is what I pay the CAA for the CofA, the cost of the work is much greater

I will pay £600 or so also at the next CofA annual, but that is just the CofA issue. The cost to the CAA of actually doing the work is surely not that much?

[bluskis]

Sorry IO

I was too brief, I too pay the CAA £600, the rest of my expenditure goes to the maintenance company, and yes I do not think it costs the CAA anywhere near this amount , a nice little earner I'd say.

Bosex,

No room for errors. frightening business.