Putting Aircraft on-line with local Aero Club - Costs?

[ckaine]

I am currently looking in to purchasing an aircraft, either a C172 or Piper Warrior/Archer and am hoping to get some advice on whether putting the aircraft on line with my Local Aero Club would be a good idea.

If anyone would be able to give me a bit of an idea of the approx insurance and maintenance costs it would be much appreciated as I am trying to work out what sort of Dry Hire rate I should be looking at charging.

I am not looking to make money out of it, and as I understand it this is probably impossible, however if it helps with ongoing costs I would be pleased.

Thanks.

[aldee]

COSTS

I would not do it again;
based on my previous 50% shareholding in a 2000 model Piper

It will break

It will get damaged

It will cost more than you budget for maintenance

It will get neglected / abused by non caring hirers

It will end up painfull after the warm & fuzzy "I'm an aircraft owner" wears off
(like when you're topping up the a/c account instead of flying yourself)

It will be your responsibility after it comes off hire untill someone else wants it

all good if you got truck loads of $$$"s, a comprehensive agreement and a charitable disposition

good luck

[PlankBlender]

Here's the calculation spreadsheet for my Archer, plug in your own costs for insurance, parking, local prices, etc. and away you go

4shared.com - online file sharing and storage - download Archer calc gen.xlsx

Comments on the figures welcome from anyone, so far the assumptions have held up pretty well, but I haven't done that many 100 hourlies and have not put her online yet (or for that matter changed prop or engine), so any experience backed up with numbers are appreciated

[PlankBlender]

aldee, care to share some actual figures, I'm contemplating whether to put my technically AOK Archer online for touring/IFR training use only, but so far I have resisted the urge for the usual reasons?!

Specifically, can you share

• how much (more) maintenance did you budget for, and what were the actual figures
• what did people break that wouldn't have broken/been damaged while under private use (to put provisions in the contract to exempt those from owner maintenance onus)
• what were the signs of neglect/abuse and can you think of any ways to protect yourself from these

Cheers!

[Biggles_in_Oz]

If the club wants exclusive (or near exclusive) usage of the aircraft, then they should pay the fixed costs and consumables, and a variable amount based on actual flying hours.
Otherwise you'll have to guestimate how many hours it'll fly to then be able to compute a single per-hour rate which will cause the club to say that your rate is too expensive.
Owen Stanley's "If the school is offering a certain amount of hours, divide it by 4." statement is a good starting point.
(For obvious reasons most clubs won't *guarantee* you a minimum number of hours).

Get the club to agree to reimburse you for the loss of your 'no-claim bonus' and 'excess' in the event of an insurance claim. (the club can then do what they like with whoever caused the damage).
Your insurance might have 'loss of income' coverage, otherwise you'll need to negotiate beforehand with the club so that they pay something for loss of income if repairs end-up taking a long time.

You'll be up for something like an average of $2k per annual & 100 hourly inspection + any parts and repairs, plus parking, plus insurance of around 5% of hull value.

You'll also be up for probably $5k+ for the first inspection because depending on the condition of the aircraft the LAME will find all sorts of things that 'need' doing.
Make it very clear to the maintanence outfit what your 'style' will be., ie open chequebook or, ignore cosmetic issues or, only fix critical stuff or, get permission before repairing anything or, ....

[c100driver]

Don't do it!!!!

If you cannot afford it with out loaning it out you cannot afford it if it is loaned out.

My C172 100 hour inspections went from $800 per inspection to $3000 after dry hire to an aeroclub. Non club/school aircraft are the ones they loan to the dodgy pilots so they keep there own working. In the 18 months they had my aircraft.

• Prop damage due run up over stones $4000
• Smashed nose spat and nose gear damage $2000
• Smashed skylight $2000
• Landing lights $80 per month
• Non vernier mixture "screwed out" $500
• Damaged rudder $1000
• Rear fuse skin damage from tail scrape $1500
• Ripped wing tip after contact with shed $1200
• Door latch locking arm stripped $600
• Starter motors x 2 $800
• Stripped starter ring gear after hand starting with starter engaged $800
• Tail plane rib cracked after moving aircraft by sitting on tail $1500

It just kept on coming, so I pulled the aircraft and just loaned it to pilots I knew and the 100's dropped back to $1000 until I got back on top of the damage then is was back to $800.

[PlankBlender]

c100driver, surely some of the damage you describe was caused by negligence and would have to be borne by the PIC or club?!

I would not entertain putting my machine on line without an enforceable clause in the contract that the club would be liable for such damage that is not attributable to wear and tear. Why should I lose my no claims bonus with the insurance or have huge maintenance bills just because some d!ckhead doesn't take proper care? Surely no-one gets away with such behaviour when they rent a car, why would they when renting an aircraft?

[Chimbu chuckles]

Surely no-one gets away with such behaviour when they rent a car, why would they when renting an aircraft?

Because they do!!

If you cannot afford it with out loaning it out you cannot afford it if it is loaned out.

Best advice on the thread.

[Ndicho Moja]

I have never quite got my head around this one, but, WHY would one own an aeroplane for some one else to wear out?

Simplistic I know, why?

[golow]

It seems the going rate for a 172 is $80 to $85 an hour dry to a school and you pay insurance and parking. Ay bankstown thats $4500 a year, so hard to make it pay for itself.

[PlankBlender]

Surely no-one gets away with such behaviour when they rent a car, why would they when renting an aircraft?

Because they do!!

So why do owners let them get away with it?

Surely you can stipulate conditions for rental, and one of them is that renter pays for damage or they don't get to rent it, no exceptions, sign-out constitutes acceptance of that condition, Bob's your uncle. You can define damage as not directly attributed to normal wear and tear by your LAME, or of course negligence and that's that. In case an insurance claim must be made renter or club pay for your loss of no claims and any increase in insurance for the next two years, call it an excess like when you rent a car..

It seems the going rate for a 172 is $80 to $85 an hour dry to a school

That sure sounds low, more like a figure for a C150.. If you look at schools' solo hire out rates for 172's/Warriors and deduct costs (have a look at my spreadsheet in the earlier post), there's still a margin in there for school and a bit of a buffer for the owner for extra maintenance after the cross hire has paid for most of the fixed costs..

[tail wheel]

If you are worried about the cost of buying, owning and operating a private aircraft, you really can't afford it. It is all going to end up in tears!

I suggest a cold shower, a BEX and a long lie down!

[c100driver]

So why do owners let them get away with it?

Usually because it is weeks before you find out that they have damaged the aircraft, mostly because the bill arrives in the mail.

Also because if you get tough on the Club or School you will find that the aircraft flying hours suddenly drop and your aircraft become the "use this one last" aircraft. I tried to neg a deal were they paid for minor damage and was told that they didnt need my aircraft that badly. This from two different operators.

If you are trying to run the aircraft as a business it must fly to generate an income.

After 3 years of leasing we realised that the only way to make it work was to be the actual operator of the aircraft. After we made this step we managed to get the aircraft to a break even stage.

[Ovation]

If you want to recover some of the costs of ownership, the safest way to go is to manage the use of it yourself. This means hiring only to those pilots you know personally or have been recommended and have vetted their experience, and who will (in writing) accept liability for the costs of insurance excess and/or damage they cause.

There may not be the same utilisation as "on-line", but the lower maintenance and repair costs will be the offset.

Use this simple test:

Would you would rent your wife/girlfriend/partner to somebody you don't know?

YES: Then put them on line to help with the ownership cost and don't rent the aircraft.

NO: Then don't rent your aircraft.

[the wizard of auz]

If that's the case. For rent or hire: one used and pretty worn looking wife. doesn't do much, but looks OK on a Friday night after the pub. Eat before you hire her, because she will burn a salad. High maintenance and expensive.
Can be used in piston powered aircraft to simulate a turbine whine.

[the wizard of auz]

It shows, doesn't it.

[Peter Fanelli]

Would you would rent your wife/girlfriend/partner to somebody you don't know?

So you are saying it's ok for someone else to pork your wife/girlfriend/partner, as long as you know them.

[the wizard of auz]

Its usually the way it happens........ whether you know about it or not is a whole different matter.

[ReverseFlight]

Having previously owned my own aircraft, I would also advise against it. The following has been reiterated in these forums ad nauseum:

If it flys, floats, or f**ks,
Don't buy it, just hire it !

So true.

[PlankBlender]

Like anything else that involves a fair bit of dough, buying/owing/renting out an airplane must be approached with a dose of financial acumen. Sounds obvious, but given all the anecdotal evidence that can be found here about people getting bent over a barrel as aircraft owners, maybe it's not so obvious after all..

The most important consideration must be that if you can't afford the aircraft without having it online, then you must have a pretty sound budget and business case for financing the purchase and operation. If you're not sure that you can get the utilisation or limit your risk re. maintenance sufficiently to make it all work, maybe the cold shower is the way to go

c100driver wrote:

Usually because it is weeks before you find out that they have damaged the aircraft, mostly because the bill arrives in the mail.

Surely that can be mitigated by instructing the LAME to pick up the phone and get authorisation from you for any repair before hands are laid on your machine, or obliging the club to inform you of any damage unless they want to end up paying for it if it can't be ascertained whodunit. I'm not sure that receiving an invoice weeks after the fact is the right way of looking after a considerable investment like this, this sort of passive management may work with a mutual fund but obviously not with a working asset

If the club you're wanting to put it on with won't accept your conditions, then walk away, find another club or maybe think about managing the renting out to pilots/'freelance' instructors yourself as suggested by others here so you get the level of control you want. Any investor's top priority is managing the risk of his or her investment, and a club/school's manager that doesn't get that you probably shouldn't be doing business with in the first place.
Of course if you let people get away with damage, they won't run after you to foot the bill

Personally, I would only rent my plane out to smaller clubs or schools where I can get some utilisation that pays towards my fixed costs, and where I can still have a good measure of control over my risk. A condition of renting my 100k+ asset would have to be that whoever signed the maintenance release without noting damage before someone else spots if would have to be responsible for it. Watch how diligent the dailies will be Makes for a messy MR, but who cares, that's what it's there for after all!?

As to all the 'if it flies, floats, or fornicates, rent it' believers I say that I thoroughly enjoy owning an aircraft that I know exactly what I can expect from, that is as much fun to fly as it is to look after, upgrade and treat like a long term project, and financially I'm still better of to the tune of thousands of dollars a year (yes, including all maintenance, engine/prop reserve etc.) compared to renting for doing my CPL/IFR training and other flying. Just a shame that an Archer isn't aerobatic

Also, I personally know owners who own training aeroplanes as investments and who make thousands in profit every month. Yes, no kidding, thousands. Sure their planes get flogged like working horses and need a fair bit of maintenance, but they produce income and are a very profitable asset. Do those owners manage their investments closely and make sure they don't get shafted? You bet!