Understanding aircraft ownership

[GroundBound]

OK, I've searched the archives, but I've not found exactly what I want to know - can anyone out there help?

What are the costs and requirements of owning one's own aeroplane (C172/PA28 or similar, 20yrs+). Please don't tell me its cheaper to hire, or group own - I know that :D - but hiring isn't working and groups don't seem to exist here.

Forget about the purchase cost. From what I have gleaned, there are fixed costs:

Hangarage/parking (are they mutually exclusive?)
annual insurance
annual check
50 hour check (assuming one manages at least that per year)


Variable costs:

fuel,
oil,
landing charges
maintenance (depending on what and how often things go wrong)


What am I missing? Can anyone put some ball-park figures to the fixed charges?


thanks :ok:

[RichyRich]

I can't help with any of the costs, but don't forget to factor that 50-hour check in, even if you don't reach the hours: it then reduces to a six-monthly check, or so goes the theory.

[topcat450]

You'll also need to factor in an engine fund...to replace the engine.

If the engine lasts 1000 hrs...and costs 10,000, you'll be paying 10 per hour just to cover the cost of an engine when it needs changing.

[BlueRobin]

Whoa there Neddy! Back up a sec or two. I see GroundBound resides in Belgium. Now, I guess the costs, labour rates and regs are different there?

Are you planning to own/run a group in the UK? Unless you have deep pockets, I strongly recommend you run your own group if utilisation is low (<100 hours p.a.). Otherwise, you could end up running your C172/PA28 for £200-300 per hour! :uhoh:

Why a group? The hourly and monthly costs are cheaper due to shared costs, plus your engine utilisation goes up reducing further costs. NB: Engines like to be run. If not, there less than likely to reach their TBO without big repair bills.

About 6 is an ideal size. Again, regs on group ownbership are probably different overseas.

Also, landing fees are negli...gab..neg......able...gli...small! compared to the overall cost. Base landing fees can be incorporated into base parking/hangar fees and are a FIXED cost.

[QDMQDMQDM]

I own my own and reckoned it would only be a worthwhile thing if I flew 100 hours a year or more. I do and it is a wonderful experience, but it is jolly expensive and my fixed costs are relatively cheap.

Someone cleverer than I should be able to dig out the old threads for you -- there are lots.

QDM

[drauk]

I've done quite a bit of analysis on this in the past. It's amusing that despite you saying that groups or hiring don't work for you you'll still get people telling you to do just that. Of course, they're right in that in may well be cheaper, but it doesn't just come down to money for some people.

All my numbers are in GBP, excluding VAT and are based on the south east of the UK. For a 40,000 plane flying 100 hours a year, with a generous amount for maintenance but no engine fund, I calculated the cost at 136 per hour (i.e. 13,600 per year), including the cost of funds for the inital purchase. To get down to 110 (approximate cost of renting) you need to do 150 hours a year.

For people that just fly for the hell of it, 100 hours in a year is quite a few. For a more typical 50 the cost is over 200 per hour. This is why groups, where they exist, can work well - 4 pilots doing 50 hours each gets the price down to less than 100 per hour, which compares with a typical 1/4 share which costs 10,000, plus 100 quid a month and 60 per hour. Actually this would be slightly cheaper (90/month) but probably would result in periodic extra expenses for maintenance which the ownership figures already included.

I suspect people will say my figures are on the high side, but I've based it on an expensive airfield, insuring an inexperienced pilot and tried to include enough for maintenance to give a worst case scenario. If you end up spending less that's great. Also people will tell you to fly permit aircraft, microlights, paragliders and whatever else, but only you can make that choice.

[Monocock]

What are you buying with your 40k drauk? An F16!!!???

What must not be forgotten is that a/c appreciate. The last two a/c I have owned and operated for 3 years each flying about 100 hrs a year in them. When I sold them they had both appreciated by 20%. Add that in to your flying Gross Margin and things will look a bit rosier.

What I'm getting at is if you own you musn't look at it as a "cost per year" as yo do when you rent. No different from renting a house and buying a house.

Example over three years:

Purchase Price £40 000

Servicing £ 4,500
Fuel £ 7,000 (based on 100 hrs per year)
Landings £ 1,000

Maintenance £ 4,500
Insurance £ 2,400
Hangarage £ 4,700

Total 3 Year Expnd. £ 64,100

A/C sells after 3 years £ 48,000

3 Year Flying Cost £ 16,100

Cost Per Hour £ 53.67p


Oh and before anyone tries to tell me I should have included interest on Capital Invested and allowed for fuel price rises and maintenance cost rises etc. etc please bear in mind this is only an example. Their gross effect is marginal anyway.

Worth noting though that even if the a/c only sells for £4k more than purchase price, the cost per hour is still only £67 per hour.

Hopefully some of you can see where I'm coming from??

[drauk]

Monocock, our figures aren't so different in some ways (hanger and insurance are almost identical). The reason we come out with a different bottom line is:

1) Fuel: I'm guessing you've costed about 6 gallons per hour, my figures were based on 10. (5k difference)
2) I've not figured in any appreciation (8k difference, see below).
3) I've figured in the cost of funds (4.8k difference).

I can certainly see where you're coming from, but assuming we can both add up properly (or Excel can, which is what I used) then there is no mystery to it - you get different answers if you make different assumptions and when you're only dividing the final number by 100 it doesn't take much to have a 10 pound/hour difference in the bottom line (about a thousand pounds I'd say, which isn't much based on points 1 to 4 above). Above I've accounted for 18k worth of expense over three years - 60 quid an hour.

I am very surprised to hear that an aircraft on which you spend no money other than basic ongoing maintenance (i.e. no avionics upgrades, repainting, etc) appreciates 20% over three years having had three hundred hours added to it. Is this normal? Could it not be explained by changes in economic climate or buying at a bargain price and selling at a good one?

[poetpilot]

If anyone wants to email me at

[email protected]

I have an Excel spreadsheet that you can put figures into and play with, covering aircraft ownership. It's not gospel, but heck, you can customise it further if you want (just tell me so I can improve it)

[GroundBound]

Hi Guys,

thanks for the replies - and to Drauk for picking up the significant point :D

Indeed, the costs in Belgium may well be different, and may vary depending on the chosen base (as everywhere else), but I doubt that it will be hugely different to the UK.

My problem is that the "flying club" availability is relatively low - book 2 weeks in advance, for 2 hours then get rained off. There doesn't appear to be the same culture of group ownership, and I can't find any way to share. So its buy my own, or try to create a group of like-minded people.

However, never having owned an aeroplane or had anything to do with maintenance schedules, I have no idea what items need to be taken into account, nor what the "ball park" figure for them is - hence my posting ;)

[QDMQDMQDM]

I reckon roughly about £70 an hour at 100 hours a year, for a 150Hp PA18-150. That takes into account neither engine fund, nor cost of capital, but if you did that you probably wouldn't fly. Let's face it, it's an expensive, time-consuming, potentially dangerous past-time and if you spend too much time rationalising you wouldn't do it.

QDM

[cblinton@blueyonder.]

GB

Be carefull, I bought into an A/C and whithin 7 hours the engine blew up that only had 400 hrs on it.

This resulted in a 28,000.00 bill and I had only flown it for 10 hours.

so thats £2800.00 per hour!!!!!!!!!

[IO540-C4D5D]

GroundBound

You have to decide how much you can afford to spend (there is no obvious point at which you get especially good value; the more you pay the better a plane you can get) and what sort of flying you want to do now and in the future.

If you want to fly VFR only then you can probably get something good enough for say E60k. If you want to fly IFR then you are looking at a lot more.

Unless you do more than about 200 hours a year, it will be cheaper to rent by the hour. But if that was the whole story then almost everybody would take a train and not own a car. By owning you can look after it well, make sure everything works, and have total access to it. It is impossible to put a price on these things.

Owning will also enable you to do many more hours because the marginal cost per extra hour flown is very low, much less than renting the cheapest crappiest plane you can find. So you will get more currency. Very few pilots who rent have enough currency because the hourly cost is so high.

But beware when buying - always get a full inspection - cost likely E1k or so. Many people sell their planes when they discover something they don't want you to know! "Suprise" annuals costing E10k are fairly common on 30 year old planes.

[Monocock]

Unless you do more than about 200 hours a year, it will be cheaper to rent by the hour.

If you want to fly VFR only, then you can probably get something good enough for say E60K

always get a good inspection - cost likely E1K or so

"Surprise" annuals costing E10K are fairly common on 30 year old planes

Is there a competition on these forums for the highest level of clap trap to be spouted in one post?!!

I dont mean to be nasty but this tread was taking good shape for a minute.:ugh:

[QDMQDMQDM]

These are perfectly reasonable statements. What are you on about, Monocock?

QDM

[Monocock]

200 hours a year equates to 35 minutes flying every day. If that was required to justify a/c ownership I don't believe anybody would buy an a/c. (I certainly wouldn't have done).

To have to spend E60K to buy a "purely VFR" aircraft? C150's, PA38's, Luscombes, Jodels............aren't they in that bracket. My guess is that you can pick up a nice on of these for E35K (£20k).

A pre-purchase inspection for E1K? I have never had to fork out more than £100 cash and a lunch in a pub on the way home for one of these. E1K is two thirds of the cost of an annual!!

"Surprise E10K" annuals DO happen. To say they are "fairly common" is not really fair. I was speaking to my local M3 last week about this very subject. He reckons he has only had one annual/C of A that was over £6K in 9 years (on a light single). That was on a Rallye that had basically died due to corrosion.

As mentioned before, my post was not meant to be nasty, I just don't want Groundbound to be put off too easily when I personally feel that ownership has far more advantages than disadvantages.

[GroundBound]

Monocock
Don't worry, I shall not be put off :) I've seen previous threads on ownership costs, plus the dreaded unexpected arm-and-a-leg engine replacement. Its obvious to me that cost of ownership for only a handful of hours per year is far more than the cost of club flying, and that group flying seems to be the answer.

Chaps, as I said, club flying is not working - aircraft availability is not great, and the state of the aircraft "could be better" (- the PC way of putting it), try to find a POH on any of the aircraft for instance!

I'm trying to find a way where, even if I pay an equivalent cost per hour as club flying, the aircraft availability is better, and so is the state of the machine. Even a slight increase in cost per hour would not be an unreasonable burden if its a way of getting the other 2 benefits.

My problem comes from the fact that there seems to be no shared ownership here, and that I have no personal experience of ownership, what the legal requirements are or what the costs are - that's what I'm hoping to find out :)

A tentative probe within my immediate working environment has already revealed 2 others who could/would/might be interested. Trouble is, nobody has any idea what the cost is, and everyone assumes its too expensive. If the figures can be worked out and I can persuade another couple to join then maybe there's a chance. So I'm trying to find out "what requirements/figures are involved?"

Looking forward to some more input. :)

[IO540-C4D5D]

Monocock

"200 hours a year equates to 35 minutes flying every day. If that was required to justify a/c ownership I don't believe anybody would buy an a/c. (I certainly wouldn't have done)."

I believe I addressed this in the post of mine to which you responded. I did say that there are benefits in ownership which you can't put a value on.

The 200 hours figure is of course approximate. You can "operate" (the kindest word I can think of) an old piece of junk more cheaply, if you don't mind flying an old piece of junk in which just enough stuff works to make it daylight-VFR legal.

If you run a plane on a Private CofA and do your own maintenance (with no valuation of your own time), and it is a 1970 C150, the operating cost will be a lot lower than if you fly a really nice IFR-capable plane. Perhaps you could achieve a breakeven at say 100 hours (compared with self fly hire).

In this forum, some people here do fly old and very basic planes while others don't, but many questions of this type cannot be answered unless the proposed activity is known in some more detail.

Let's put some figures on it at one end of the spectrum:

A £200k plane on a Public CofA, still within warranty, and ignoring interest on capital:

Fixed costs:
insurance 4k,
hangarage 4k,
annual 1k.
Misc crap 1k.
So your annual fixed costs are 10k a year.

Variable per-hour costs:
£40 juice
£15 engine fund
£3 prop fund
£8 50-hr service
£10 150-hr service
So your hourly cost is £75/hour - actually very cheap considering it would cost you at least £250/hour to rent such a plane, even if you could find one, which is doubtful.

Now, at the other end of the spectrum. I have never oned one of these but I know of some figures, e.g. a 1970 C152 on a Private CofA and self-servicing:

Fixed costs:
insurance 2k,
hangarage zero, parking on grass £1500
annual 1k.
Misc crap 1k.
So your annual fixed costs are 5.5k a year. Obviously there are airfields where parking is cheaper, and insurance is not mandatory!!

Variable per-hour costs:
£25 juice
£10 engine fund
So your hourly cost is £35/hour, and if you can rent one for say £80/hour then the breakeven point is about 120 hours, and less if parking is free and you don't bother to insure it.

BUT - parking outdoors will rot your plane faster and will rot your avionics damn fast. On a well equipped plane this can make hangarage cheap at twice the price, quite literally. You can get some serious maintenance suprises.

As regards how much is spent checking a plane out before purchase, well as with a car you could be lucky. But most used cars are pretty good these days. With a plane you could easily buy a can of worms. I have looked at a fair few used planes and it is apparent that there is a lot of junk on the market.

Just a few thoughts...

[rtl_flyer]

This is NOT a definative cost, just my experience:

Based on Cessna 150 Aerobat.

Hanger £1500 a year

Insurance for two pilots (with 100 hrs - flying 25-50 hrs each a year) and QFI, Hull value £30'000(see note below) 3rd party 1 million - costs £1200

Maternance - usually £1200 a year, to £1400 (every 3rd year for C of A). If you have the aircraft on Private CofA you can do the 50hr/6 month check as Pilot Owner (ONLY Private Cat!!).

These are your fixed costs, as you have paid out its up to you to make the most of your fixed costs.

What I do consider you SHOULD THINK VERY HARD about is what aircraft to buy and especially what condition. Are you going to buy an aircraft with fresh (new) paint , referbished interior, rebuilt engine, moder avionics etc???
Say you see a cheap Cessna 150 for £15K, think....
A good paint job will be £5-6K
Engine rebuild £5-10K
Interior Referb £3K+
Modern Avionics - depends what you want... £5K+
(A GPS/COM may cost £1200 to buy but it could cost you £1K to FIT!!!!)

A (FULL) set of aircrat covers £1-1.5K

All this adds up!!!!!

Its very much what aircraft do YOU want to fly.

A friend of mine bought a "project", basically sound but in need of a "tidy" £17K later its a fantastic aircraft . I should know I bought it after all the work had been done.

Fuel costs & oil ..... its up to how much you use it.
Engine fund ...... some people do it some dont. If its a group you should have one.

Personally I like a clean shinny airplane to fly, with modern avionics. Some people will fly anything.......

My advise is to buy the best condition aircraft you can afford, as this is your biggest cost! But thats just my view!