What needs to be done/sign of things to come?-merged

[kiwiblue]

I've been reading other threads regarding the viability/profitability of GA with interest... at least until they descend into little more than a slanging match.

It seems to me that there must be quite a few ideas out there of how GA could become a profitable and attractive proposition for both operators and staff... so that's my query. What are current GA operators getting right? What are they getting wrong? Where do you see room for improving the bottom-line to the benefit of all? How would you go about implementing/achieving your improvement?

Seems probably necessary to lay a few ground-rules for this discussion to proceed:
We're talking GA -piston and gas-turbine light singles & twins; not the White Rat, anything that starts with V or any of their ilk.
Wages/conditions (for all involved) whilst an important part of this discussion are not the be-all, end-all of the discussion. Keep in mind that these will come to an appropriate level as we get everything else right!
When talking costs, lets assume Direct Operating costs as our point of common ground, rather than charter/hire rates. For added commonality, let's further assume USD$ as our currency.
We all know that the current GA fleet is at/nearing it's 'use-by' date. What would you like to see the current fleet replaced with? In broad terms, what airframe types do you see as potential replacements for the current fleet?
What opportunities do you see out there that are not currently being pursued? In what way could existing services be improved?That should be enough for a start!

For my part, I see the likes of the Cessna 208 Caravan and sub-variants having a strong role in the future of GA as it currently exists, perhaps supported by Pilatus PC-12 in the longer legs/IFR environment. DOC (C208) running at around USD$440ph according to the latest information I have to hand here from Cessna. Obviously both are gas-turbines, considerably younger aircraft than existing (hence lower anticipated maintenance costs, due less-likely unexpected maintenance issues), quieter which is a relatively major consideration in noise-sensitive areas and able to lift larger pax/freight loads on broadly similar DOC.

Where I see things going wrong at present; operators' attention to and concentration on what their direct competitors are charging for the same service. Wrong kiddies. Concentrate on your own knitting. Sure, it's about bums-on-seats, but what about how you are cutting your own throat to save the punters $5??? What about how you are creating/participating in a system that eventually winds up massively undervaluing the service you are offering??? Your staff are subsidising you and your punters!!! Why? Is there another industry you can point to within which this is a common accepted practice? At the end of the day, no matter what is being (realistically) charged, the punters will still be coming through the door. Perhaps it would be better to form a marketing association or some such and sell our products off-shore? Have the punters 'in our door' before they even reach our shores? Bye and large, our products sell themselves. The desire to take advantage of our offerings already exists before the opportunity does. We should be making the most of that!

The glaringly obvious exception to this in GA is to me the meat-bombers. Sure, many of them still run poorly maintained, very old piston airframes; but have a look at the top end of that segment... basically brand new gas-turbine gear in mint condition, works hard all day and makes damn good money for the operator. I've known jump-masters in the past that were on 3-4 times what I was earning!!! The pilots were on similar money to me, but again if the jump-masters are worth that much coin, surely so are the pilots.

OK, enough from me. Looking forward to how this discussion develops!

[PLovett]

kiwiblue
As you point out there are many threads currently running, and in the past, which have looked at this issue.

Rather than recapitulate what has been said there (many which you have identified) I think the single most important thing that could be done to make GA work properly is for nearly every owner/manager to undergo some form of business training. Only then will they see that the business practices they currently use are worse than useless and can only have one result, failure.:{

GA is the most dysfunctional industry I have ever come across and its mostly because owner/pilots are looking for someone to support their addiction. Hence the discounting, the lack of proper pricing and the abusive work practices.:=

The recent upsurge in pilot requirements by the airlines will have an effect on GA (see the excellent article in Australian Financial Review 20/07/07 on the introduction of regional jets and especially the sidebar piece on pilot numbers) which will put a lot of operators under stress. Only the better ones will survive the next few years and then only if they are very very smart. :ok:

[3 Holer]

Only the better ones will survive the next few years and then only if they are very very smart.
The "better ones" being those whom treat their staff well and I am not speaking of large remuneration.

There is another thread running which mentions the fact it wouldn't matter how much pilots were paid in GA, they would still move onto the Majors. This is true, however, if the GA Company pays award wages, has a good working environment (doesn't expect pilots to break/bend regulations, aircraft well maintained etc,.) and rosters that allow the pilot a life outside his work then that Company can expect no problems recruiting pilots when time comes for the incumbents to move on.

The airline jobs are improving now with the current pilot shortage and even one of the "majors" is having problems recruiting because of unsatisfactory T&Cs.

The solution is pretty simple and not costly.

[bizzybody]

just a question, i was instrumental in another thread running at the moment, and yes i am an operator and yes i am a big advocate of paying the award or more and lets keep this thread away from the amount of money company directors earn

Why, if an operator is not paying the award, are they still in operation? Why have fair trading, ASIC, CASA and so, on allowed that to go on.

IN my last industry if someone wasnt paid the award, they get jumped on. Simple

Why is aviation so different?

Rules are rules

Bizz

[strim]

I have done number crunching on an operation I think would be fairly profitable given the following occurred:

- I'd have to convince a rather large mining company and contractors than single engine turbine is safer than piston twin

- I'd have to find funds (a lot of) for my operation

- CASA granted an AOC with ASETPA


So. Not too many hurdles.... ;)


If successful, I foresee rapid growth.

While most dream of the business end of a jet, I'd settle for my own GA operation. One that is integral to the community and enjoys a solid reputation amongst staff and pax alike.


The solution is pretty simple and not costly.

For an established GA operator, making beneficial changes should be simple and not costly, like you said. But for a new starter, I think the equation is more like pretty difficult and very costly.

What do you think?

[bizzybody]

I was looking at ASETPA approval but i ( my own thoughs only) think its really worth it but it would depend on what you are looking for and what you operation is.

I was up untill last week getting a caravan and started looking in SE IFR and for a caravan, its not worth it (for my operation) its slow. not pressurised, sure it can stop on a short piece of dirt but there is not alot of call for that in the city.. The approval and procedures needed for the approval was massive and the time it takes is lengthy. PC-12 well one has to find one for startes. the only one i new that was available was just sold at auction. Quick, Flys high in great comfort.

I agree about the safety factor in a lot of respects. Chieftain cant fly into known icing conditions BUT they are cheaper than a caravan, hold the same amount of people (generally ) uses less fuel....flys ABOUT the same speeds. Single pilot.

We do some small mining contracts and they are great. Trying to take the bigger ones off the bigger operators is not that easy ut doable

[flypy]

The only real way to make real money in GA is to take on millions of O/S cadets from Asia. Negotiate a per cadet figure for the completion of each cadet's training and flick the conveyor belt on, churn through a few groups every 6 months or so.

I don't need to take you on a guided tour around MB or BK to show you the successful schools/operators, and where they're getting their money from.

[bizzybody]

there is a saying that an operator at Bankstown said to me..... we no longer speak by the way and ive heard this many times. The only way to make millions in Aviation is to start with millions.

Or

as you said OS students could also help

Bizz

[kiwiblue]

OK, at last some movement in this thread! After 27 hours and not a nibble I thought perhaps people were finding it too scary to offer their thoughts on improvements. At the back of my mind always is the wisdom: "If you are not part of the solution, then you are part of the problem". And yeah bizzybody, we've all heard the best way to make a small fortune out of aviation is to start with a large one. Read a couple of lines up. That's the very thinking that is a part of the problem. What you think consistently becomes your reality. I've read your previous posts in this & other threads and it appears to me that you are a more proactive operator than we usually hear about here, particularly in regard your crews' T&C's. Good for ya! The whole point of this thread however is to brainstorm the possibilities that exist in what should be a lucrative industry -to identify where as an industry we are going wrong and what may be a solution; and to identify possibilities and opportunities both operationally and in a business practice sense that are not currently a part of our repertoire!

One that is integral to the community and enjoys a solid reputation amongst staff and pax alike

Superbly spoken.

Likewise, I believe the C208 is best suited to taking the VFR role in pax/freight GA rather than the IFR environment. Whilst they do dress up very nicely in the Grand Caravan exec config, I think there would be pax resistance to the lack of space and the noise levels when talking of a flight much over an hour. A brilliant machine in the appropriate role, but for the IFR/exec transport role I would definitely be looking more towards the PC12/TBM stables.

I would like to think that the new-start operator has a unique opportunity to 'get things right' from the get-go, rather than an existing operator trying to stamp out the brush-fires of an existing operation with old gear and attitudes. Get the regulatory stuff out of the way nice and tidy, everything else should flow from there quite nicely!

[notmyC150v2]

Have to agree with previous posts that business training should be mandatory. But then it should be for anyone who wants to start a business.

Getting the respective departments of Industrial Relations or the Workplace Ombudsman to investigate and prosecute underpaying employers would be a huge start. Although if some of the shonks can't compete by paying low wages they might try and compete by not maintaining aircraft... What's that? They already are??

;lkjasdid .... nonsense, I refuse to believe such a thing. ...lsadfhdsos.ls...

Sorry I just had to retake control of my keyboard from a rogue CASA officer.

But seriously, prosecution of those who breach the rules for profit (or just to stay viable) is the only way to start the improvement of the GA industry. There can be no shortcuts. You can throw money at things like business training and other niceties but as long as some feel there is a way to make an extra buck by taking shortcuts with their statutory responsibilities, they always will.

Oh and free rectinol for GA pilots. That might take away the burning pain of being screwed in the meantime.

[bizzybody]

yeah thanks kiwiblue i wont disagree with you about the the statement. Very true mate.

We are in the middle of expanding with some new "ideas" and need approvals to do so and i think this could be a grea time to really start thinking about what, within the legislation, could be done thats different and better for the general public....

By the sounds and looks of it i am very out o the loop re wages... maybe its because i dont really pay much attention to the competition but i honestly cant seeany GENUINE operator paying less than award!!!!..... i mean in my eyes thats uncomprihensable... in any business / industry....

Bizz

[Chimbu chuckles]

The reason many, if not most, GA companies are financially marginal is EXACTLY the same reason why most GA pilots are paid so little...supply and demand.

Too many companies chasing too little work.

It is that simple and everything else follows that one basic premise...supply and demand.

It is the reason why second hand aircraft values are so low...why GA pilot wages are so low....why charter rates are so low....because the supply of each out-strips demand by orders of magnitude....the supply of experienced pilots seems to be reducing below demand for the first time in living memory. For the last several years the supply of experienced airline pilots has been dwindling...that is now starting to flow through to Regionals and that flows onto GA...and in an interesting twist Flying Schools are hurting probably more than GA charter. Highly qualified and experienced Grade 1s are moving into the rhs of regional turboprops and and will be Training Captains in a few short years...because most, but not all, are too old to make it to the majors.

The very people needed to address the pilot shortage are in shortest supply...CFIs and experienced Grade 2s...most off to regionals or majors depending on their age.

What will a CFI at a decent size school be worth soon...what will one be worth at the Asian cadet factories in WA...$150k? When the only other option is shutting down your cadet system I would suggest $150/annum plus company car will be money VERY well spent to retain the services of an experienced, talented and qualified CFI. They can't move offshore...the problem is worse everywhere else.

What about experienced Grade 2s?

What is an experienced RFDS pilot worth to keep him forever, or attract in the first place?

100K plus a stable roster you can plan your life around?

Too much?

I am certain any beancounter/manager from RFDS reading this probably just experienced his hair stand on end and a chill sweep down his spine...because deep down he knows this is not rubbish.

To own a home, educate/feed/clothe a few children, run a car or two (that are not 15 years old), have the odd holiday and fund old age this is what is required....or are pilots not allowed to have such expectations in life?

Managers certainly have them.

The attraction of airlines is only partly shiny jets...the shine wears off real quick btw...the real attraction, actually more like financial imperative, of airlines is to be able to achieve a financial state that facilitates all ones normal life aims...children, a house in the burbs and a few toys with which to enjoy life....not to mention an old age that is above the poverty line.

What is an IFR Baron/Chieftain pilot in one of the major regional centers worth?

Given that most of these operations exist around the mining industry and that mining boom has driven cost of living in these towns through the roof I'd say there is a need for some improvement in the terms and conditions if you want any hope of retaining staff. A mate in Mt Isa tells me basic accomadation starts at $400/week IF you can find it in the first place...demand for services like accom outstrips supply in these places enormously.

I would guess that puts minimum wages around $1000/week...75K/annum gross...more for key staff like CPs and Training pilots and perhaps a retention bonus/profit share too.

What is a VFR C210 pilot living in a community worth?

I can gaurantee you it is more than the current award + free decent accomadation as a starting point. It probably includes a cash inducement to stay for 12 mths...maybe a months wages.

So if your business model/reality cannot sustain the above plus maintain your aircraft, be they C210/Baron/Chieftain/Kingair/C208/PC12 in first class condition then I respectfully suggest you will not be in business in the longer term.

[bizzybody]

bravo Chimbu chuckles:ok::D

my chief pilot is ex rfds. worth his weight in gold

[Whiskey Oscar Golf]

Chimbu is on the money, the Best GA operators I've seen kept their aircraft in top condition and they kept customers and staff. Another small one and I'll no doubt get hammered for it but both of the operators I'm thinking of were ginger beers. They paid award, accomodation was expensive but the aircraft were nice and no "you must do this" attitude.

Another idea would be to diversify, don't just concentrate on flying punters. Look at all the options and try to find niche markets . Be creative with your company and take care of your customers and staff. I remember hiring heli's from one operator who always had 100 hrs to run on the machine and at the first sign of problems would have someone on the ground. He was a touch more expensive than others but his pilots were good who stayed with him and the support meant no costly delays.

[Hatchet Harry]

Found this while having a dig around. Could be a wind up but I think not....

Possibly what needs to be done here to attract and retain people:D:D:D

http://www.avcanada.ca/forums2/viewtopic.php?t=33291

[Much Ado]

I merged these threads and moved it to GA...an interesting discussion, continue.

[Chimbu chuckles]

Interesting indeed HH...Canada/Australia have always been very similar aviation regions...vaste, sparsely populated country with more pilots that jobs.

[kiwiblue]

I have to admit, I had no idea until just now what ASETPA stood for. The trusty Google search soon fixed that gap in my education! The ASETPA Checklist on CASA's site... seems a worthwhile document, and certainly covers what a new turbine operator should be aiming for -as a minimum! I have to admit though my eyebrows raised a tad at the Proving Flight| Engine failure during take off, including turnback procedures. (my emphasis)

Are CASA now advocating the turnback in EFATO as a valid procedure??? And checking to see that you do it??? I hope not! Please, someone tell me I'm looking at this in the wrong way!!!

Otherwise it seems that the process would give any new turbine operator/start-up a very good basis upon which to build, whilst maintaining their aircraft in mint condition! To be applauded!

[Cloud Basher]

Actual cost of C210

I have a rather accurate costing spreadsheet for any type of aircraft. Plugging a simple 210 into the spreadsheet with a capital cost of $300000, and insured amount of $400000 and an interest rate of 11% with a 40% residual after 5 years and taking into account refurbishment, hangarage and insurance comes out to round fixed costs of... wait for it... $122,000 per year. (If the aircraft is bought outright with cash, the interest rate would equate to a return on the money invested in the aircraft of 11% which would be the minimum you would want as you could invest the money elsewhere quite easily for this return, so the interest remains valid regardless of whether you have borrowed or not)

Variable costs (direct operating costs) come to $175 per hour assuming engine and prop are full life on purchase.

So lets say the aircraft is fully utilised doing 1000 hours per year means the hourly cost to break even for this aircraft is~$300

Now lets say a pilot does his full 900 hours per year flying a 210. We want him to be on the average wage of $56,000 flying this aircraft. Working out an hourly wage means he is paid $62.22 per flying hour, lets be generous and say $65.

So the hourly cost to the operator of the aircraft is currently ~$365 per hour. Now the operator has office staff he has to pay, himself etc etc. Just taking into account the following:

Office/building/shop front rent $25,000 per year (very very generous!!!)
Secretary $40,000 per year
Himself $110,000 per year
Electricity/telephone/internet/booking system etc $50,000 per year
Obviously not all expenses but lets just work with this.

Total other expenses = 200,000 per year.

Lets assume he has five 210's. 40,000 per aircraft doing 1000 hours per year each extra $40 per hour per aircraft. Aircraft now $405 per hour.

lets say company should make 30% profit per year, so aircraft now $526.50 per hour. (Company making ~$500,000 per year) (which is spot on for capitalisation of $1.5M for five x 300k 210's.)

Now this is very simple with many holes in it. Is someone going to pay $526.50 per hour charter for a 210? Add in GST to the punter and it is $580. Can you get people to pay this for 5,000 hours utilisation per year? Until the answer is Yes to those questions then as Chimbu Chuckles says supply is way too high and demand to low. Remember this is for a 210 and is very very conservative.

If we have ten operators with 5 x 210's each so 50,000 hours of 210 utilisation needed all charging around $350-450 per hour. You can easily see where the easiest costs are to be cut from in order for the operator to try and get 1000 hours utilisation and still make a profit. He can't stop repayments on his aircraft, he has to insure them, he has to do maintenance (sic) he has to park/hangar them. Mind you in the scheme of things, $65 per hour is only 11% of the cost of the aircraft to operate (assuming 100ohrs per year). Almost what the Government takes!!!!!!! So here is the solution, get rid of GST on aircraft operations and pilots can be paid a half decent wage!!!! Who wants to lobby the govt? There is an election coming!!!!!!!

BTW if the aircraft only does 500 hours per year the hourly cost of the aircraft itself is ~$430 per hour, for 300 hours ~$600 per hour and for 100 hours ~$1500 per hour.

Nice cheap things these aircraft!!!

Cheers
CB

[kiwiblue]

ahhh... that's better. Just had to drop the family off at the pool. Got my 2nd wind now :}

I'm certain there are people reading this thread that haven't yet tossed their ideas in for fear of ridicule... whilst I can't promise that won't happen, it won't from me here and I'm sure not from most of those who have posted in this thread so far. Go hard people! You could provide the impetus for some robust discussion and perhaps shift a few perspectives to the betterment of us all!!!

Whilst down in Sydney a couple of weeks ago, I was taking an amble around YSBK. Found something that really blew my hair back... let's see if I can post a pic.

http://www.dh82.com/675amphibhttp://www.dh82.com/675amphib.jpg

OK, that wasn't so hard -took longer to resize than to get it there!

Now, this wee lady (and the idea behind her!) really floats my boat!

It seems she'll be running from Rose Bay in SYD to Cessnock airport with punters doing the whole winery thing for the weekend! A classic bit of niche marketing/opportunity exploitation if ever there was one! This guy has a huge urban population as his potential market, a classic machine well suited to its task (and damn sexy too :ok:) with an established clientele already fond of their vino, comforts and luxuries going to the place best able to meet their needs! I would be surprised if his round-trip time was much over an hour, so for the money he's likely to charge even as part of a weekend package deal, it looks to me like he's on a winner!

THAT's the sort of thinking we need more of! Any other thoughts/possibilities out there?

[The Hedge]

I left a fantastic GA job to go and fly jets and I can tell you after my big head settled down with the satisfaction of the achievement,I realised that the job isnt all that fantastic.

I havent had a weekend off in 5 months and have never been so tired in my entire life. I get lots of money, sector pay, bonus etc but I am seriously thinking whether its all worth it.

I havent ruled out a return to GA in FNQ as I found the regoinal job/lifestyle combination far exceeded the financial gains of city living/airline work.

..the grass is always greener!!!

PS. Kiwiblue...turnbacks are well practised and safe manouvres in Asepta a/c as long the prop is feathered. In fact you usually end up way too high.

[kiwiblue]

A good run at the figures Cloud Basher, would certainly be interested in a copy of that spreadsheet!

Looking at it another way... your $580ph on a C210, with 5 pax seats comes to a mere $116 per seat, per aircraft hour, with all costs covered. I reckon you might be undervaluing your services a tad! Where I once was, we charged $295 (knock 10% off straight away for commissions usually payable) for a 5-hour excursion, which included 1.4 hours airborne, ~$35 for a boat-cruise and remaining time on the ground. Many of the aircraft operated by our competitors were C206, so similar costs (we operated BN-2). The charter rate on the BN2 was $1000-$1200ph, with the 206 then (5-6 years ago) around the $800ph mark. I don't reckon those rates will have come down.

Almost double what you reckon you can earn...

[kiwiblue]

Thanks Hedge! I was a tad gob-smacked when I saw that!

[morno]

As Hedge said, turnbacks are normal for a single engine turbine. Great fun to practice during the training too, :ok:. Even practicing them with zero thrust (not as good as a feathered propellor) you end kicking in a side slip and a lot of flap to get you down onto that runway! When's my next base check, :}??

In keeping with the topic of the thread though, I can see things like PC12's, C208's, TBM's etc. becoming more popular, maybe not so much in the short term, but definitely in the long term.

All those piston twins that started their lives in the 70's and 80's are certainly only going to get more and more expensive to maintain, and it's only going to take an accident (unfortunately) of something like a Chieftain or a 402 full of politicians (we can only hope, :}), belonging to a company that pays their pilots below award, and takes shortcuts with their maintenance, before action is going to start taking place on these sorts of operations. And let's be realistic, there certainly are a few too many out there. Criminal to be operating such operations in my opinion. And I'm sure I speak for everyone, bar the operators themselves!

What are the long term answers? I can't honestly give too many answers. However one thing I think is obvious, is that the current lineup of aircraft in production I don't think are suited to the need's of the Australian scene. The C208 fits one part of the market, the PC12 fit's another, but they're not fitting across the entire spectrum.

We need more light twins, be they turbine or piston (turbine makes more sense!), to fit into the PA31/C402/C404, and BE58/C310 sort of market, that DO perform when one donk goes out, can carry large payloads, have plenty of fuel without having to stop off 3 times between Brisbane and Mt Isa, and are relatively simplistic in systems. Joe Blobs out in Meekatharra who gained his LAME's Licence back in 1975 isn't going to have the faintest idea how to fix the nice Garmin 1000 screen you just broke in your brand new turbine driven C402 (hypothetically, if only Cessna would do this, :(), and even if he can, he probably can't sign it off legally. Unfortunately I think trying to get newly qualified LAME's into the bush is just as big of a problem, if not larger, than trying to bring GA operators back into line.

I know a lot of people think I'm crazy even thinking of replacing light twins with light twins (even if they are new), with that low seating capacity, but I think a touch of realism is required here. This is Australia, not America, not Europe. Yes we may appear to be behind the rest of the world, however we also have a very different aviation industry to the rest of the world. And whilst the C208 and PC12 are great aircraft, try telling that to the mines who have Single Engine Phobia. They are probably at the moment, the single biggest market aviation has in terms of $$'s.

Conquest's, King Air's, Metro's, nice aircraft, but all starting to get into that high cost and high seating capacity end of the market. Not to mention, the C441 is still an old aircraft. You still need something in that 6-8 seat market that is cost effective, new, and suited to the smaller clients who want to fly, but can't afford the big budgets like mines.

Finally, if GA is going to change with regards to pay and conditions, then it's going to take a very large majority of pilots to finally stand up and say "enough is enough". You don't have to trawl Pprune to realise that there are an awful lot of spineless and gutless pilots out there who are only concerned with getting themselves to the top of the ladder in the quickest way possible, and willing to ruin everything along the way, so that the poor guys/girls who are still coming up through the ranks, or are choosing to stay in GA for the lifestyle, are eating 2min noodles and working 7 days a week. I've met enough of these myself along the way, and you could hardly say I've been in the industry for ages!

One day....

morno

[ForkTailedDrKiller]

"you end kicking in a side slip"

What's that? You side slip a single engine turbine aircraft?

How completely irresponsible!

What a totally crap pilot you must be!

Dr :cool:

Footnote: See earlier thread on sideslipping Cessnas!

[kiwiblue]

Good points morno, thanks for the info re the turn-back also.

the mines who have Single Engine Phobia. They are probably at the moment, the single biggest market aviation has in terms of $$'s.

How would twin-pac C208's go then? I know one at least was modified with 2 PT-6's (i think?) swinging the single prop in NZ years ago, when CAA was struggling with the concept of SEIFR in a gas turbine... not sure what ever became of that airframe, or the whole twin-pac idea after that. Do you think the mines would be more accepting with 2 gas turbines driving a single prop?

[Led Zep]

To quote morno: "And whilst the C208 and PC12 are great aircraft, try telling that to the mines who have Single Engine Phobia."

I would love to hear the rationale as to why putting miners into a creaking, circa 1975, 15,000hr C404/PA31/insert other cabin class piston twin here is safer than putting them into a nice new (or low time) PC-12 that can fly over most of the weather – more comfortable and SURELY much safer?! I'm still waiting to play with a stormscope, let alone a colour wx radar while in the soup. Embedded CBs?!? I'll boil the kettle again. :\

PT6s aren't perfect but I'd trust one of those more than two GTSIOs (as good a piston engine they may be). :ugh:

The same could also be argued regarding older King Airs and Conquests but since the PC-12 only has one donk, sorry not safe enough!

/Rant :} :ok:(How many ground rules did I break? :O)

[strim]

The statistics speak for themselves. There are less deaths per 100,000 hours in SE Turb than ME Piston. It will take one operator and one mining company to make the first move....

On a different note:

What about loading 9 miners on their 4 days off into a C208 and flying them from Roxby to Lincoln. Included in this 3 day package is airfares, accommodation and of course 3 days of insane deep sea fishing charter. What would a miner pay for that???

The answer I think is this: more than enough to make a healthy profit. The problem is, getting it off the ground.

Who's with me?

[Chimbu chuckles]

Cloud basher.

1/. There is not a 'simple' 210 on the planet worth $300k. Try 200k for a really good one.

2/. Over insuring an aircraft is very nearly as silly as underinsuring...certainly if you're talking double anyway.

3/. C210 DOCs (engine/prop/fuel) $120/hr...same as my A36 Bonanza.

My stab at what running a charter company with 5 C210s would cost to do properly.

Fixed overheads for 5 x C210s (1 million worth of aeroplanes)

Capital costs = 100k (20k/annum each..a wild stab in the dark but that would have you paying off an aeroplane about every 2 and a bit years so probably close)

Aircraft Insurance = 30k (5 times my A36 which is insured for 200k)

Annual spare parts. radios, paint jobs, tires etc = 90k

Since our hyperthetical company employs a full time Lame + Apprentice .

Employees $650k

7 pilots ( average 70k)
1 Lame+1 apprentice (90k+30)
1 secretary (40k)

Wages/super/occupational insurance etcs...what it costs to employ someone is lots more than just the pay packet...in that 70k average I have about 10k each for a couple of houses scattered around communities with which you could house say 2 or 3 pilots in each base....FOC!

Accountantancy fees. $30k

Hangar/office rent, utilities and office consumables. 100k (easy)

Total overheads = $1 million

On 4000 (5 aircraft @ 800 hrs each) revenue hrs/annum that is 250/hr.

Break even total/aircraft hr = $370.

If you were not averaging $500/hr it probably would not be worth the stress.

As you point out though, very accurately, if the utilisation is not there you go broke VERY quickly.

I would not even consider the above without a full time Lame employed...outsourcing maintenance could EASILY destroy the viability...busy maintenance outfits in Darwin were charging me 4k to 100rly my Bo when it was online there...and sometimes it took a week to do..once it took two weeks just because my aircraft was not their primary concern...their own aircraft were.

5 aircraft at 4k x 8 100hrlies/annum = 160k

If they take 3 days each that is 17 weeks lost revenue.

Your own full time LAME + apprentice and a good maintenance plan that has each aircraft out of action perhaps 1 day every 21 for a good dose of TLC and periodic maintenance, would be essential in my view.

At Simbu Aviation back in the mid 80s we were doing 100 hrs a mth on each aircraft averaging double charter rates and losing maybe 7 days a month average (including ferrying aircraft to maint facility/longer stays for engine changes etc) to maintenance between the Islander and C185. We did that with just two pilots employed at any one time...we really needed 3 but we were young and keen and happily flew 6 days a week...sometimes 7:E...we had cargo bois to load and wash the aircraft so we just flew our rings off...you'll never hear me complain about my time in GA...I had a fecking ball.:ok:

How many charter companies in the North and West even do half that utilisation on average, 50-60hrs a mth, and as a result struggle to make charter rate?

[Chimbu chuckles]

strim...you need to think outside the box...verticle integration my man.

A C208,

Accomadation with bar,in room porno movies, 'friendly' girls, poker machines and a kitchen with 24 hr good food...they should not want for anything (read 'need to leave your premises')

A boat and crew...although I don't think the fuel and bait bill for the boat will be very high:}

A lot less stress than 5 x C210s me thinks....in fact employ a young pilot and spend all your time on the under utilised boat...with a few of your better girls:ok:

Edit: In fact set the whole deal up on an Island and have an amphib C208 as above...like an X rated club med. I have a line on girls in Thailand and PI....pure genius:E:E

[morno]

Led Zep and strim, I totally agree with you. I have flown single engine turbines and I've flown twin engine piston's, and I trust that PT6 up front more than I trusted those 2 Continental's.

However, mine's are yet to be convinced. And until we do convince them, it'll be those 1970's model twins, :ugh:.

morno

[Led Zep]

I know that minesites do not promote 1970s OH&S onsite...so why should travelling to site be any different?! Those 1970s twins surely would not meet certification requirements today?
:confused:


Anyway, sorry for the thread drift, kiwiblue. :cool:

[kiwiblue]

No problem Led Zep -it raises the question of: how would we best go about educating the likes of the miners to the inherent benefits of the single-engine turbine vs the apparent benefits of the c.1970 piston twin?

[Lasiorhinus]

Try pointing them in the direction of a couple of mining companies in northern WA who dig little bits of carbon out of the ground, and transfer staff in C208's AND C210s...

[Flyingblind]

Had a bit of a nibble from a large Gov Dep looking at commissioning a report on the OH&S + legal ramifications for senior management, regarding staff travel in remote areas travelling in '70's era aircraft.

Said department pulled out due to unspecified reasons,:ugh: shame, as it would have been a great exercise to highlight the problems we are talking about.

Maybe the Fed/State Governments should take the lead and show some leadership? their staff certainly don't hire :mad: cars when they get off their nice RPT aircraft at the other end, so why accept your 'valuable' and litigious staff?

[Cloud Basher]

Chimbu Chuckles,
We will have to agree to disagree on some of the costs, particularly real (that include the opportunity cost etc...) aircraft operating costs (your company stuff is probably closer than mine) but I guess that is not the point anyway. The point is as has been said we continuously degrade the actual real cost of doing business with small aircraft. To make an actual decent living from GA I'm thinking you would have to charge somewhere around $7-800 per hour for a 210 with usage closing on 1000hrs per aircraft per year.

As an aside I chucked a brand new Cessna Caravan into my little program and came out with Direct costs of $462 per hour, with a fixed cost including finance of $747,000 per year on a 40% residual after 5 years using current market interest rates, insurance rates etc.

If you paid cash and didn't care that you could invest your money and get 10% without trying, then your fixed costs are about $140,000 per year.

So if you have the utilisation then making money out of a caravan if you charged about $15-1600 per hour migth even be possible!

Cheers
CB

[HappyJack260]

Cloud Basher - what numbers do you come up with per hour for a 10 year old Pitts S-2B (A$175) vs a new S-2C (around $300k)?
And why are you depreciating down to 40% over 5 years when:confused: history and regression analysis demonstrates rather better depreciation than that?

Anyway, I'd be inclined to factor the cost of finance at the rate I actually paid then use that rate to work out the P&L of the business. I'd hope to get a better RoC than 10% in any case - but surely the business is about operating aircraft, not owning them.

[Cloud Basher]

HappyJack,
For the Pitts both doing 300 hours per year I come up with the following:
assuming full life engine and prop for both aircraft.

S-2B - $360 per hour including finance, $245 per hour not including finance.

S-2C - $405 per hour including finance, $200 per hour not including finance.

I am just working on a 40% residual after five years of fixed interest as when I was (still am!) looking at an aircraft myself this is what "seemed" to be the industry standard. Note that this was for aircraft ownership and not for a business, where ownership may not necessarily be a goal.

Also note I have not included depreciation in the above figures. Your are right, second hand aircraft depreciate very little, especially those over 15 years old.

Edited to add: Sorry HJ, just saw what you were on about, my figures don't reflect depreciation to 40%, they assume you still owe 40% of the original capital value of the aircraft after five years, having paid 60% off over that time. I do have facility to work out depreciation, however I usually don't bother as all the aircraft I am looking at are at least 20 years old and so depreciate very little if at all, some models even appreciate!

Cheers
CB