Operating Costs C150/2

[chris_p]

Does anybody have any figures handy so I could get a rough estimate of the operating costs of a fairly well kept C150/152? An FTO/group in Blackpool is stating that cost price is £45 per hour wet, does this sound like a reasonable assumption including maintenance, insurance, public CoA (& other regs etc..) costs averaged per hour?

[gcolyer]

Sounds good to me if that includes maintenance, licensing and insurance. But then are you talking about a group share or club rent.

[Tall_guy_in_a_152]

For a group that sounds barely sustainable, unless there is a monthly charge added on e.g. £50 per month x ten members.

[chris_p]

Thanks for the reply, the example I used was for a flight school in Blackpool which utilised membership of a no-equity group for its flight training (so it's kind of club rent with a group membership?!).

[chris_p]

Yes there is a monthly charge (something like £70pm I think). OK so if there wasn't a monthly charge, what would you expect 'cost price' flying wet ph to be? Thanks :)

[gcolyer]

With no monthly charge I would say about £65 - £70 ph wet.

[Tall_guy_in_a_152]

It would depend alot on utilisation as there are fixed costs to divide up by hours flown. Insurance and hangarage / parking are the most significant.

If you take a group of ten paying £70 per month then that is £8400 per year of income for the group. Divide by 200 hours (typical annual hours?) gives £42, plus say £25 towards 'hourly based' maintenance, oil and wear and tear plus £35 per hour for fuel. Total is £102 per hour. At 400 hours pa it is down to £81.

Those numbers look fairly generous for a 152, so should cover occasional unexpected expenses (e.g. GPS upgrade!) but owners always run the risk of unexpected maintenance expenses that would blow the budget.

Edited to add that for sole ownership the insurance would be cheaper and parking at a strip will be much cheaper than hangarage at a 'proper' airport.

[chris_p]

Hi Tall_Guy, probably because it's 10 o'clock on a Monday night, but I can't seem to get my head around your example. I understand that the fixed costs need to be apportioned according to aircraft utilisation, but how does the £42 income available per hour relate to the other figures? For example, the £42 is income, whereas maintenance & fuel costs are expenditures, but you have added them together?

[A and C]

The tall guy is more or less on the numbers for the C152 and as you can see the price comes down as the aircraft usage increases.

The biggest problem with aircraft is the lack of use that they get in the UK, the maintenance cost per hour rockets on under used aircraft as will the fixed cost per hour.

Group ownership is just fine untill the problems start, you will find that the 5 hour a year members will not want to spend anything on upgrading the radios etc (after all the aircraft costs them £213/hour). Then what happens when the aircraft has a big engine problem? If say at a 50 hour check metal is found in the oil filter and the engine has to be striped, you can expect a £6000 bill for that, will you all have to put your hands in your pockets?

chris_p you already have a PM from me with the details on how to get inexpensive hours with no cash up front and no risk and if a minimum cost.

If as you say the (F)ATPL is you goal you know who to call but if you want to fly an expensive under maintaned old dog and take the financal risk of unforseen costs get into this group.

My business model cuts out the "low use" problems of the UK, that is why I can supply a very good C152 at a low price and if you do all the things that I recomend you can fly for £55/hour.

[Tall_guy_in_a_152]

In a group the 'income' (i.e. cost to members) is used to pay the 'expenses' (i.e. money flowing out of the group to keep the aircraft flying). The income is generally split between an hourly rate and a monthly charge where the hourly rate is notionally based on the direct cost of operating the aircraft for an hour (including share of 50 hour checks etc) and the monthly charge covers all calendar based costs such as insurance, hangarage, the annual etc.

There are two ways to look at the cost of something comlpex - try to find out all the individual costs and add them up OR look at someone else who is doing the same thing and copy them. You started the ball rolling with the 2nd method and I am running with it.

To come back to the example, the assumption is that if a group charges themselves the equivalent of £8400 a year on top of the hourly rate, then this is what the group expects to pay out, averaged over the long term.

There are many ways to tweak this model to suit the needs of the group, particularly regarding how the cost of a new engine will be funded, when required.

A couple of ownership costs that are often ignored are depreciation and cost of capital. Cost of capital is either the cost of borrowing the money to buy the aircraft or (if you already have the cash) the loss of income from anything else that you might have done with the capital (opportunity cost).

Depreciation is beginning to hit traditional light aircraft as the cost of composite equivalents become popular. It is therefore critical not to pay over the odds up front.

[crap pilot]

If as you say the (F)ATPL is you goal you know who to call but if you want to fly an expensive under maintaned old dog and take the financal risk of unforseen costs get into this group.

Don't make assumptions like that:= I know of this group and not only are they the best examples of C152s that ive ever seen (one of them has a Garmin 430, fuel flow, music input, new engine, etc) but being no equity, should there be any problems, then it is no expense to the group members at all.

[A and C]

Good luck to the group if they are as good as you say, however I am on safe ground 99.99995% of the time making such assumptions, all you have to do is look around most GA airfields to see the state of most of the UK GA fleet.

If it is a no equity group and properly run at the costs stated the only way the owner can make a profit is to have a large number of people who pay the fixed costs.

However I can tell you that at that price some of the members are paying well above the odds for flying a C152 because they don't do enough hours. If there are a large number of members and avalabilty will be a problem and the members who are paying a large amount over the odds for the convinience of a group aircraft will soon want rid of an hours builder that they are in effect subsidsing.

What I offer is an hours building program that will work for the individual (or two individuals) who want to build hours quickly in a well maintaned aircraft and have no nasty suprizes on cost.

[chris_p]

A&C, yes I'm looking to hourbuild for the CPL & FI rating, but this question is separate to that - and whilst I agree you've got to be careful what you're getting, not every other C152 is an 'old dog' either.

Thanks for the detailed explanation Tall_Guy, that makes things clearer now.