Putting my aircraft on-line

[brommers]

After doing the sums I realised my local flying school are marking up my dry hire charge of $120/hr by $50/h before putting it on line for $295 wet. It is a C182P.
That sounds a lot and I think they are cashing in on my investment.
Any people out there who know the going rate? I have been told 20% of the dry hire is normal.
(please don't reply with lectures about why I should not put it on line. I have my reasons, thanks)

[Clare Prop]

Because they have overheads to pay? Flying schools aren't charities. Sounds like a reasonable rate to me.

[Band a Lot]

Ok brommers I am in, lets sort it.

Need all your costs plus what you expect as a pre and post tax profit on your investment, also need any deductions you may claim for tax reasons and also expected personal use.

Also do you cover loss of use of your asset or any other items we need to know about?

[The name is Porter]

Is that all they are marking it up by? You can't be serious whinging about that, take it back, manage it yourself and see how you go.

[CAVOK92]

After doing the sums I realised my local flying school are marking up my dry hire charge of $120/hr by $50/h before putting it on line for $295 wet. It is a C182P.
That sounds a lot and I think they are cashing in on my investment.
Any people out there who know the going rate? I have been told 20% of the dry hire is normal.
(please don't reply with lectures about why I should not put it on line. I have my reasons, thanks)

Flying schools aren't cheap businesses to run. Let's say your c182P does 100 hours in the year. That contributes 10k less GST a year to their overheads. Overheads that include a Receptionist 40k pa, accountant/bookkeeper 40k pa, a CFI with all the bells and whistles 90k+, rent, electricity, insurance, ect. I hope they have a lot of aircraft. Because according to my maths that 182 is going to need to be doing 3400 hours a year just to cover the fixed wages.

[bw2004]

I have an aircraft online and the numbers are similar to what you've mentioned.
Whilst, as an owner, it hurts a little to look at that margin, as CAVOK stated, I can see that the costs are substantial...
Not to mention the associated compliance related headaches...

The main question in my mind is what are you trying to achieve in terms of hiring your aircraft. In my situation, whilst its nice to receive some income I don't think I'm ever in danger of making any money. The main driver is to make sure the aircraft is being used (even if that isn't by me) as I don't want it to just sit on the apron. The other one is that I have some satisfaction in being able to 'give back' to the industry and allow others to have fun flying like I do.

If you aren't interested in big hours, you might be better off simply hiring it out yourself. Making your own website is part of the fun.....

[ChickenHouse]

$295 per hour sounds about right for 182 TCO, but why do you go online that cheap? Did you ever do a lifetime TCO calculation?

[brommers]

I don't think I should be funding a fulltime receptionist and bookeeper. Most places have instructors operating reception and the book keeper visits one every 3 months to do the tax. They are marking up by more than double what I was told to expect by another school. What I was hoping to achieve was to trade off engine life for avionics upgrade. That could still work but neither am I a charity. They sold off all their aircraft and now cross hire but are still treating other peoples aircraft as their own asset. Looks like I will have to run it myself.

[GADRIVR]

Mate.....what they charge the aircraft out at is really none of your business. They have staff to pay. Get over it. Yet another clown who believes that a flying school can be run on the smell of an oil rag with all the consequences that go along with that strategy. No wonder this industry is ******! !

[brommers]

*hissy fit*

[Traffic_Is_Er_Was]

So are you unhappy because they are making more money than you thought, or because you are making less than you thought? Were you not happy with the original price of $120/hr when you put in on line with them? In the end they are making $26 over what you thought they might make. Put up your rate to $146/hr and see what happens. Do you want more money, or more hours on it?

[CAVOK92]

If you don't think you should be paying for a full time receptionist, why would you cross hire your aircraft to one that does. My previous experience with flying schools is that they put 20% on top of the aircraft operating costs. So if you do the maths on your 182 you will find it should come to about $45.
The flying school gets to choose what they charge the aircraft out at. You get to choose a rate that you x-hire the aircraft at. If you aren't happy with what your getting? negotiate more, or cross hire it somewhere else. I'm sure there are a few companies at Moorabin who would love to have it. Keep in mind tho YMMB will charge you ten fold to park it.

Someone with your professional aviation experience should understand what it cost to run an aviation business these days. Compliance costs alone would need that 182 to do a lot of hours.

As well as that, any one in business outside of aviation looking at a flying school who has 20% margins to cover the fixed costs and make a little profit to put back into the club would tell them they they should close their doors immediately before they go bankrupt.

There is only one way to make a small fortune in aviation. Start with a big one.
Unfortunately you and your flying school are in the same boat.

[MikeJulietHotel]

Three simple questions:


Are you getting the hours you expected on the a/c?
Are they looking after your a/c as you would expect them to?
Is the rate you get a rate you agreed and are happy with?


If the answer to those questions is yes, then what they charge on top is really irrelevant to you.

If the answer to any of those questions is no, then go and have a conversation with them, and focus on those issues, not their rate.

[brommers]

The intent of my original post was to try to gauge what is the norm. I have not had much feedback so far.
I have asked for $145 dry but they don't want to pay it so at the moment is is off-line from 1st Oct.

[brommers]

MikeJulietHotel very sensible reply, thanks.

[brommers]

CAVOK92 thanks for your input. That is the sort of feedback I was looking for.

[poteroo]

brommers.

A lot of sound experience above from some who, I know, own and operate flying schools. Now for my 2 bobs worth.

If you own a nice aircraft, and you're feeling the pinch insofar as annual outgoings such as insurance: have a search about for 1 or 2 reliable pilots who are not owners, but have a steady need for a private aircraft for , say, 40 hrs pa. Negotiate a dry or wet hire rate with them - place them on your insurance by arrangement with your insurer, and be happy that the small income from these 1 or 2 pilots helps defray your insurance, hangarage etc.

Don't forget that your insurer might require additional premium to cover less experienced pilots so you need to make an adjustment for that. And, remember that it's you who have to determine whether these pilots are competent, current, and trustworthy. Unless you have a lot of experience in the industry, that decision may be better laft to a flying school who are qualified to do just that.

BTW, a C182 isn't the type that you just hire out to any pilot. They are very prone to front end damage, and need to be flown differently to a C172.

You won't ever meet your full outgoings: but you will prune back your more painful annual costs by way of some extra 'income' plus increased utilisation as well.

Good luck!

[Clare Prop]

$145 is reasonable.

Supply and demand, see what you can get elsewhere.

I own an aircraft of similar performance to the 182 and I budget $200 an hour running costs dry doing 100 hours a year. That is realistic having owned it for 10 years...but one 100 hourly unexpected item can gobble that up in one hit.

[Band a Lot]

Can I ask a serious question op? do you work for the government or a sector paid by them?

Unless you do mega hours your deal will never bear fruit of a avionics upgrade and any part to that is loss of engine/prop and aircraft in general, is your sids are not done you are in a World of hurt.


You know you need help to run your aircraft, they need help too - it is not a .com industry - never has been. why don't you offer to buy shares in the company you dry lease your plane if the make so much profit?

[International Trader]

Brommers,

Ever rented a car?
In the car rental business, the company organizes its car finance as low as possible to put as many cars as it can on "the line" and, then rents the cars out for as much as they can. They often have discount to get the work or offer free upgrades and sometimes not. Whatever happens, it is of no interest to the finance company ( they get the agreed rate).
Sounds to me like you have done a deal with the devil but, now you are not happy about dancing with him and maybe greed has got the better of you.
Do you feel as if the school should bend over backwards just because you are letting them play with your pride an joy?
To them it is just business and let me tell you, it is a tough one.
Did you ask for a minimum number of hours?
Did they offer it?
In order to get the utilization for your aircraft you don't really know what they might have do to their hire charges but, you still want your money( actually now more). They may drop the retail rate or even offer instructors for free to support hirers who are not all that comfortable in your aircraft or to encourage pilots to move up into the next class of aircraft. No one knows but, it really isn't your business, you have agreed on a wholesale rate.

Starting to grumble or threaten to move to another school may get you a reputation that will stick.

Trading engine hours for avionics upgrade? Forgive me for saying but ,sounds like another pie in the sky private pilot idea to me. For decades now, l have seen people buy a plane with the hope of becoming the next version of ILFC through GA cross hire.
People are always entering aviation with no real knowledge of the industry and they try to reinvent the wheel. They don't realize that the wheel fell off ages ago.

If you can't afford to pay for the aircraft fitted out as you want it to be then, it sounds to me like you can't afford the aircraft.

A wise man once said to me that, the only time you should buy an aircraft is when you can afford to let it sit there for when you want to fly it.

One last point, ever wonder why car rental companies turn over their cars at about the 15 month or 40,000km mark?

[gerry111]

"One last point, ever wonder why car rental companies turn over their cars at about the 15 month or 40,000km mark?"

I reckon that's because they want the vehicles to be available 24/7. Taking the vehicle out of service for an oil change would cost them money.

[Clare Prop]

It's so they can get rid of them while they still have a low enough mileage to be able to get a decent price. Which, from my experience in the hire car industry, will be more than they paid for the thing, plus 40G k's of income being thrashed by renters!

Did the OP have a written agreement with the school, if so why is he complaining about something he has agreed to? if not, then he has no leg to stand on.

In my early days I cross hired aircraft from private owners and clubs because I had to; never again, the attitude of people like the OP is the main reason why. I had a 30 day termination clause in the agreement which I would use if they started coming in and throwing their weight around or thinking they could talk down to my staff. They needed me more than I needed them. :mad:

[Band a Lot]

How about we pay $150/$160 per hr.

Location Groote Eylandt

Ops Charter and skydive.

Naturally all ferries and maintenance costs are yours, we pay fuel, oil and pilot (not on ferries).

[dhavillandpilot]

Having owned aircraft since 1974, anyone who thinks they are going to make money from an aircraft on line be it a Chipmunk or a Citation Jet is deluding themselves (I've owned both)

Similarly with overheads charged out properly by the flying school sub leasing an aircraft is not a winning formula.

It is simply supply and demand.

Private owners struggle to get utilisation, where's flying schools have a ready market thru their students, be it limited.

If you need to get hours to afford the aircraft youly probably better off not owning. If you are using it as a tax reduction vehicle then so long as the rate is not ridiculously low then just accept that the school needs to make money, after all you are both "in business" and you agreed the rate by mutual consent???

As for getting upset at what they charge, that is their business NOT YOURS

[Clare Prop]

Clearedtorenter , in an ideal world, yes. But it's amazing how quickly (especially with clubs) a mutually beneficial negotiated arrangement becomes something they try to squeeze more and more from, justifying it by making out you are the greedy one, though in their lines of work they would never accept the flimsy margins we have to work on. I always stuck to agreements to the letter but the owners would always try to shift the goalposts AFTER signing to benefit them more. That was when the 30 day clause was invoked. Stick to the agreement, negotiate a new one or F off. Many of them were far more trouble and time consuming than they or their aircraft were worth.

[peterc005]

There's more to it than that.

Planes have a high fixed cost (insurance, hangarage, maintenance etc) to to cover these fixed costs you really need to put at least 100 hours a year to get the fixed costs per hour down.

I think the way to do it is to find an operation that you can trust to look after your plane and work it to get over 100 hours a year.

I've also know LAMEs who fixed up damaged planes, that would be difficult to sell, and put them online at flying schools where the hirers don't know or care about the accident history.

LAMEs can do the maintenance themselves, sign off MRs and usually have a pilot of salvaged spares sitting around for their own planes. They treat these planes the same as you would for a property investment - buy the investment and wait for the yield to come streaming thru.

[cattletruck]

Twas interesting to see those who care about other people's property and those that don't, you wouldn't have picked 'em until you saw it.

Believe it or not, my favourite PA-28 at the old meat works was a private cross hire. It had all the hall marks of a privately owned plane - sheep skin seat covers, wheel fairings, some extra electronic kit - you could tell it was loved by someone else outside that meat factory.

Last I saw of it while at the above mentioned school was it went offline with fuel tanks leaking and the owner unable to repair it.

I saw it again 20 years later and it is now owned by the above mentioned school but the only character it has left are the memories it evokes from its rego.

[peterc005]

Trick is to find a place that will respect your plane, which comes down to the people involved.

If a C182 etc was put online for mainly cross-country nav exercises it would not be a worry.

I'd be too stressed to leave something like a Seminole online for circuit and asymmetric training.

It would be a brave person who left a Pitts online for training unless they were always standing around with a stick to whack ham-fisted knuckles.

[International Trader]

You can justify anything if you try hard enough but, in my opinion, you would be hard pressed to financially justify a plane on 100 hours per annum.
You would be better off renting varying aircraft types as the need arises and putting the capital somewhere else.
No sleepless nights, no unscheduled maint problems ( the worst), no maintenance sharks and, no SIDS. Choose a different type for each flight.

[Squawk7700]

You can justify anything if you try hard enough but, in my opinion, you would be hard pressed to financially justify a plane on 100 hours per annum.
You would be better off renting varying aircraft types as the need arises and putting the capital somewhere else.


Remember though, that there are your $80,000 182's out there and your $300,000 182's or more.... It all depends on which one you have.

This one is more like a $80k one which changes equations somewhat.

100 hours a year on a budget 182 is not a bad return and dare I say significantly more return than you'll get in any bank right now.

[Clare Prop]

I tell people that if they are considering buying rather than renting an aircraft for their own or business use they will need to do at least 250 hours per year to be better off than renting one.

One pair of gents who didn't believe me ended up working out that the aircraft they bought ended up, in real terms over five years, costing them around $8,000 an hour to fly. Each. Dry.

[Squawk7700]

I tell people that if they are considering buying rather than renting an aircraft for their own or business use they will need to do at least 250 hours per year to be better off than renting one.

One pair of gents who didn't believe me ended up working out that the aircraft they bought ended up, in real terms over five years, costing them around $8,000 an hour to fly. Each. Dry.

That figure is way too high for many scenarios. You need to factor in the hire cost for a comparable aircraft.

For my aircraft point the break even point is around 55-60 hours including hangar, insurance and other costs.

If you're taking about a 172 or perhaps an older LSA, 250 hours at retail hire rates represents possibly more than the capital cost of the aircraft.

It's all about percentages and the capital outlay. You can't use a blanket 250 hour rule.

[Clare Prop]

That's in my own experience after nearly 30 years of operating aircraft of my own and managing other people's aircraft on line. I do know a little bit about percentages and capital outlay, amazingly enough. I operate at a different level to "172s and older LSAs"

[Squawk7700]

The opening post was about a 182 and not a Lear Jet....

[International Trader]

I am with Clare Prop and Dehav .

I have never been able to get anywhere near 100 or 55(?)hours.
250 hours much closer to the mark but, what do I ( Nearly 40 years in the industry)and the others know ?

If I did my own maint , didn't insure or fix anything that fell off, ran the engine/prop until out of hours , I could say that my minimum hours would be zero ( just the cost of fuel to fly).
Of course, I know that I would be fooling myself and was just eating into the value of the plane.

[Torres]

I don't know how 100 hours per annum cross hire would ever cover fixed and variable operating costs of an $80,000 C182, cross hired at $120 per hour.

The most conservative fixed annual costs include:

Debt Servicing (or depreciation) 5% x $80,000 = $4,000
Insurance est 2% x $80,000 = $1,600
Provision for repaint/refurb = $2,000

Those three annual fixed cost factors alone total $7,600 per annum which amortised over 100 hours per annum = $76.00 per hour.

Whilst it has been a number of years since I have been involved in operating cost analysis for commercially operated aircraft, I'm very sure you won't meet all the other C182 fixed and variable costs for the remaining $44 per hour.

[Band a Lot]

Lets guess a few costs on top of Torres.

Cessna 182 costing's.

Debt Servicing (or depreciation) 5% x $80,000 = $4,000
Insurance est 2% x $80,000 = $1,600
Provision for repaint/refurb = $2,000
Annual $4,000
Engine o/h 12 years $3,500
Prop O/H 6 years $500
COA 100.5 $500

Parking/hangarage $2,000
SIDS/Preventative $5,000


So far $23,100 ($231 p/h) not counting a G35S.

Lets call fuel $2 bucks a Lt, so $12,000 ($120 ph)

[Clare Prop]

Add another $20 per hour for parking/hangarage and budget more like $10,000 per annum if doing preventative maintenance rather than just the minimum.

[Squawk7700]

Add another $20 per hour for parking/hangarage and budget more like $10,000 per annum if doing preventative maintenance rather than just the minimum.

I've never seen anyone base parking / hangarage on the aircraft's hourly usage.

Are you charging parking / hangarage by VDO or Airswitch?

[Band a Lot]

Squark7700,

"I've never seen anyone base parking / hangarage on the aircraft's hourly usage.

Are you charging parking / hangarage by VDO or Airswitch?"


Is the new thing works great, it is time from touch down to time of take off.

It is $20 per hr min charge $100, all profits go back into airport improvements. I understand the next airports it will be implemented at are the ones with flying schools.

[tail wheel]

I've never seen anyone base parking / hangarage on the aircraft's hourly usage.

Parking and hangarage are components of the annual fixed cost - they are not variable costs. En route charges (or what ever they are called these days) are variable cost factors.

[Band a Lot]

Care to guess the en rooted costs and landing fees Tail Wheel? I will put them with fuel cost for this exercise.

[On eyre]

No point Band a lot - they are add on costs not related to either hourly variable or annual fixed costs.

[Band a Lot]

No point? certainly a point on a dry/wet as an idea of costing's - but now lets not show real costs of aircraft On eyre.


The OP is stating his part + mark up + WET HIRE if you care to read, so yes a point in fact valid point.

[On eyre]

Having owned (and hired out and in) aircraft for too many years I can tell you Band a Lot that enroute and landing charges are always the responsibility of the hirer and hence are add ons. The owner should always recover those costs (if they are billed to him by Airservices or airport owners) in addition to the agreed dry or wet hire rate. That agreed hire rate is determined by apportioned annual fixed costs as described in various posts plus hourly costs such as fuel and oil and an allowance for maintenance.

[Band a Lot]

Same as fuel in your 182, I will use strictly book figures - just because you are right. Allow a six pack of cylinders just for attitude On eyre on that alone.