Light Twin Operating Costs
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Light Twin Operating Costs
Hi
I have been asked to number crunch a couple of possible types for an indigenous organisation based in the NT. At present they have easy access to SE and twin service's from various operators but want their own aircraft and have a good case to justify utilisation. It will be charter op's within 300nm but mostly within 150nm. Remote location will mean ferrying to a maintenance facility, but I can factor that in.
I am thinking either a B58 Baron or Chieftain. Can anyone help me out with an idea on average hourly operating costs of these aircraft? I am assuming 500hours per year.
Thanks
D...
I have been asked to number crunch a couple of possible types for an indigenous organisation based in the NT. At present they have easy access to SE and twin service's from various operators but want their own aircraft and have a good case to justify utilisation. It will be charter op's within 300nm but mostly within 150nm. Remote location will mean ferrying to a maintenance facility, but I can factor that in.
I am thinking either a B58 Baron or Chieftain. Can anyone help me out with an idea on average hourly operating costs of these aircraft? I am assuming 500hours per year.
Thanks
D...
like I said, dont quote me on this. Fortunately I don't own one and therefore I don't have to work out things like that. Obviously closer to $400 is a more realistic price.
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Baron (very roughly).
$200.00 - Aircraft long term dry lease
$240.00 - Fuel (120LPH @ ~ $2/L for 'remote' location)
$90.00 - Pilot (NO - IT DOESN'T ALL GO ON THE PILOTS POCKET - [IE. PAY ROLL TAX, WORK COVER BLAH BLAH BLAH)
$30.00 - Public Liability and other insurance (budget ~$15000PA)
Up to $560 per hour and there is still
MAINTENANCE to come
PROFIT to come
...and a couple of other things to come that I may not have thought of.
How much money do ya wanna set aside for maintenance?
How much money do ya wanna set aside for profit?
How much money do ya wanna set aside for uexpected things such as tyres popping, cracked cylinder heads, diversions due weather, flat battery 3 hours flying away yaddda yadda.
It is a mugs' game.
As Owen Stanley insinuated - I doubt it matters
$200.00 - Aircraft long term dry lease
$240.00 - Fuel (120LPH @ ~ $2/L for 'remote' location)
$90.00 - Pilot (NO - IT DOESN'T ALL GO ON THE PILOTS POCKET - [IE. PAY ROLL TAX, WORK COVER BLAH BLAH BLAH)
$30.00 - Public Liability and other insurance (budget ~$15000PA)
Up to $560 per hour and there is still
MAINTENANCE to come
PROFIT to come
...and a couple of other things to come that I may not have thought of.
How much money do ya wanna set aside for maintenance?
How much money do ya wanna set aside for profit?
How much money do ya wanna set aside for uexpected things such as tyres popping, cracked cylinder heads, diversions due weather, flat battery 3 hours flying away yaddda yadda.
It is a mugs' game.
As Owen Stanley insinuated - I doubt it matters
We own our aircraft (baron), and it goes out for less then $600 an hour and we make a healthy profit
All up it costs me about $300/hr to operate the Bonanza. A Baron is just two Bonanzas flying in close formation!
Dr
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PB
A 182 at 160ish knots and the same payload?
Yes, they are cheaper per hour but times the extra time etc etc.....the 160 knot machines make an awful lot of sense.
When you add up the WHOLE cost........ you will get a surprise!
I can justify to my wife how little it costs..... its like journo's, and poloticians, its what you dont say that costs!
A 182 at 160ish knots and the same payload?
Yes, they are cheaper per hour but times the extra time etc etc.....the 160 knot machines make an awful lot of sense.
When you add up the WHOLE cost........ you will get a surprise!
I can justify to my wife how little it costs..... its like journo's, and poloticians, its what you dont say that costs!
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Fonz, you aren't comparing apples with apples. The example included $200 an hour dry hire, but you claim you own the aircraft so there's your explanation before you even start detailed cost comparisons.
Age usually = wisdom
Jabba the speed argument is always a good one and often has surprising results. Mate with an rv 7 is often telling me that based on his speeds his rv is more economical to run than his mates little jabiru.
Age usually = wisdom
Jabba the speed argument is always a good one and often has surprising results. Mate with an rv 7 is often telling me that based on his speeds his rv is more economical to run than his mates little jabiru.
anyone who has flown a P68 can tell you that will 6 bums on seats at average 70kg will = no fuel onboard. Hell we took one seat out from the partmarfia I did my MECIR in
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like I said, dont quote me on this. Fortunately I don't own one and therefore I don't have to work out things like that. Obviously closer to $400 is a more realistic price.
The guy was expecting an informed answer........
We all could work out in seconds that 2 x50 litres per hour =100.
It has to be $150 in fuel alone
I doubt $300 would cover the direct operating expense.
The engine/prop fund would have to be in the order of $50 per hour.
Indirect costs:
hangarage
Insurances
Bank loan
Calendar inspections
and it just goes on.......
I reckon a private owner would be paying around $300 per hour for a C172
and yes I am an owner also.
As an IA I get to see many low utilisation aircraft. I also see the size of some of the bills.
Aircraft ownership really is frightening stuff.
djf777. It is a bit of a worry if you don't know whether you need a Baron or a Chieftain as they are totally different classes of aircraft. You can't simply "assume 500 hours per year"; as annual utilisation impacts very significantly on operating cost, you must define the task, identify the most suitable aircraft type and then calculate accurate minimum annual utilisation.
Operating costs are calculated from two primary components:
Indirect Operating Costs: the costs you incur even if the aircraft does not fly: and
Direct Operating Costs: the costs directly related to flying the aircraft.
Indirect Operating Costs:
Direct Costs:
Divide Indirect Operating costs by minimum projected annual utilisation and add to the total Direct Operating Costs.
You may also need to add regulatory and compliance costs: the cost and time to obtain an AOC, regulatory documentation etc. You also need a business plan, budget and cash flow forecast.
The above list is not exhaustive. It has been 20 years since I played with piston engine aircraft operating costs and I've probably missed a number of cost components. I am far more familiar with turbine aircraft costs.
Total operating costs vary significantly between operators and are greatly affected by annual utilisation; operation type; fleet size etc. It is ludicrous to think you can "guess" your specific operating costs, or come here to PPRuNe and expect pilots to give you any real idea of accurate operating costs. With due respects to those who post here, the last person I'd ask for operating cost advice would be young starry eyed CPLs who has never had the pain of ownership.
Only successful aircraft owners who know the pain of real costs - think I've owned seven aircraft and managed a fleet of almost seventy aircraft - can give you accurate operating costs. Ask Chimbu Chuck, Jabba, FTDK etc.
It has been twenty years since I had anything to do with Baron or Chieftain operating costs (and on the basis of maintenance costs, I was never a Piper supporter), don't know current fuel and maintenance costs, but I would be very surprised if accurate Baron total operating costs were less than $600 per hour and Chieftain total operating costs were less than $800 per hour, based on 500 hours per annum.
You then add a realistic profit margin.
In a remote location, a wild guess would be a Baron charter rate of $750 - $800 per hour or Chieftain charter rate of $1,000 - $1,050 per hour. Anything less and you're probably joining the world of Australian aviation dreamers!
(I have another very rough "rule of thumb": An aircraft should earn a minimum of at least it's capital cost each year.)
Over the years I've owned aircraft, cruising yachts and classic sports cars, the rest of my income I spent foolishly. I can assure you with aircraft, yachts and sports cars the two greatest days in your life will be the day you buy and the day you sell!
Operating costs are calculated from two primary components:
Indirect Operating Costs: the costs you incur even if the aircraft does not fly: and
Direct Operating Costs: the costs directly related to flying the aircraft.
Indirect Operating Costs:
- Debt servicing costs;
- Hull depreciation;
- Hull and passenger insurance;
- Provision for exterior/interior refurbishment; (min $5,000 - $8,000 pa)
- Pilot salary plus on-costs plus costs (IFR renewals etc);
- Hangarage;
Direct Costs:
- Fuel & oil;
- Scheduled maintenance; (100 hourlies)
- Provision for unscheduled maintenance;
- Engine overhaul provision;
- Prop overhaul provision;
- Radio, Electrical & Instrument maintenance;
- Maintenance parts, (scheduled and unscheduled);
- ADs and other mandatory directed maintenance;
- Landing and parking fees;
- Enroute navigation fees.
Divide Indirect Operating costs by minimum projected annual utilisation and add to the total Direct Operating Costs.
You may also need to add regulatory and compliance costs: the cost and time to obtain an AOC, regulatory documentation etc. You also need a business plan, budget and cash flow forecast.
The above list is not exhaustive. It has been 20 years since I played with piston engine aircraft operating costs and I've probably missed a number of cost components. I am far more familiar with turbine aircraft costs.
Total operating costs vary significantly between operators and are greatly affected by annual utilisation; operation type; fleet size etc. It is ludicrous to think you can "guess" your specific operating costs, or come here to PPRuNe and expect pilots to give you any real idea of accurate operating costs. With due respects to those who post here, the last person I'd ask for operating cost advice would be young starry eyed CPLs who has never had the pain of ownership.
Only successful aircraft owners who know the pain of real costs - think I've owned seven aircraft and managed a fleet of almost seventy aircraft - can give you accurate operating costs. Ask Chimbu Chuck, Jabba, FTDK etc.
It has been twenty years since I had anything to do with Baron or Chieftain operating costs (and on the basis of maintenance costs, I was never a Piper supporter), don't know current fuel and maintenance costs, but I would be very surprised if accurate Baron total operating costs were less than $600 per hour and Chieftain total operating costs were less than $800 per hour, based on 500 hours per annum.
You then add a realistic profit margin.
In a remote location, a wild guess would be a Baron charter rate of $750 - $800 per hour or Chieftain charter rate of $1,000 - $1,050 per hour. Anything less and you're probably joining the world of Australian aviation dreamers!
(I have another very rough "rule of thumb": An aircraft should earn a minimum of at least it's capital cost each year.)
Over the years I've owned aircraft, cruising yachts and classic sports cars, the rest of my income I spent foolishly. I can assure you with aircraft, yachts and sports cars the two greatest days in your life will be the day you buy and the day you sell!
Last edited by Torres; 6th Sep 2009 at 23:29.
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Thanks for the "informed" responses. The idea is to determine whether a twin is justifiable in the area given differing requirements. My preference is a smaller twin, such as a Baron or C310, but the boss wants something bigger such as a Chieftain. The Chieftain, if we went that way, would be for longer regular (not RPT) Darwin runs but the Baron would be for work closer to home w/- 150nm. If the operating costs for the Chieftain add up then this will be feasible given this organisation is already paying up big time for seats on an RPT service every week. So having a larger twin carrying staff in and out makes sense in this case.
I like the idea of a 12month Dry Lease to prove the business, so if you have any more realistic Dry Lease figures let me know.
Maybe in time two aircraft for different areas of operation will be the answer. We already have access to singles but need/want the IFR capability for the Wet season.
The boss hasn't yet decided which way to go and this is based on the number crunching, hence the reason for the question.
Hope this helps define my question a little more.
Thanks.
I like the idea of a 12month Dry Lease to prove the business, so if you have any more realistic Dry Lease figures let me know.
Maybe in time two aircraft for different areas of operation will be the answer. We already have access to singles but need/want the IFR capability for the Wet season.
The boss hasn't yet decided which way to go and this is based on the number crunching, hence the reason for the question.
Hope this helps define my question a little more.
Thanks.
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Also dont forget to work out payload. No point getting a P68 and finding out that you can only carry 3 pax if the average load is 4-5. This will be reduced in the wet season also as a smart pilot doesn't just carry TEMPO fuel, a few en-route diversions in the wet around a CB's and you might find you get to your destination with only 30min holding.
The Chieftain, if we went that way, would be for longer regular (not RPT) Darwin runs but the Baron would be for work closer to home w/- 150nm
My only recommendation, and you can take this or leave it, is to forget the baron (far too expensive for what you get), and look into something along the lines of a P68 Partenavia.
Much better value for the same no. of bumbs on seats.
Much better value for the same no. of bumbs on seats.
A P68 is good for 135 knots, noisy as all hell and with max endurance will get 3 pax on board. A Baron will do 180 knots and carry 4 with max fuel a hell of a lot further.
300/hr to operate the bonanza?
Why Bother when you can hire a 182/mooney for ~250/hour, or a brand new 172 (with G1000) for ~ 180/hour??
Why Bother when you can hire a 182/mooney for ~250/hour, or a brand new 172 (with G1000) for ~ 180/hour??
Its like comparing a Hyandai to a Rolls Royce. It doesn't feel the same, sound the same, or give you the same satisfaction as a 520 spluttering to life then some time later at full song down a runway bound for the heavens.
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I can assure you with aircraft, yachts and sports cars the two greatest days in your life will be the day you buy and the day you sell!
......., unless there is a bloody good reason.In the interests of pragmatism- Make sure the "reason", requirement/work/contract or whatever won't evaporate or move on after you have saddled the reason with the joys of Aircraft ownership and operation...., as pending the machine if the music stops there may or may not be a market (/alternate work) to dispose of it and offer a financially realistic exit strategy on the sunk costs.
I believe, there maybe/have been some operators 'apparently' enjoying trying to find alternative work at the moment to support shiny tubes that were acquired for a purpose that is not now the great hope it was once purported to be.........
The kicker being (as mentioned above, or as you say unless you Lease it initially) the joys and cost don't stop because you've had enough fun and want to leave it on the ground and hope the pain goes away...., though they can be moderated if you "own" them and don't need to use the brass.
Good luck and hope it all goes according to plan.
Off now...... hat, coat- door
.Rgds- S28
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PlaneQuest
Fuel (GPH): 27.00
Fuel Costs/Gallon:3.65
Fuel Costs/Hour:108.18
Oil Costs per Hour:2.37
Maintenance Cost/Hour:61.90
Hourly Engine Reserve:33.94Prop
T/R Reserve 8.35
Total Variable Costs/Hour:214.74
Average Speed (MPH):200.74
Cost/SM:0.93
Annual Insurance 8,861.16
Annual Hangar/Tiedown:5,162.43
Training:4,012.18
Total Fixed Costs:17,934.68
Hours/Year:423.26
Fixed Cost/Hour:87.34
Total Variable & Fixed Costs/Year:141,168.75
Total Costs/Hour:302.07
Total Cost/SM:1.42
Operating costs for a B58 Baron , fuel costs need to be recalculated and these figures are US dollars.
For an aircraft flying 250 to 500 hrs a year 3 times the direct cost of fuel gives a good rule of thumb
Fuel (GPH): 27.00
Fuel Costs/Gallon:3.65
Fuel Costs/Hour:108.18
Oil Costs per Hour:2.37
Maintenance Cost/Hour:61.90
Hourly Engine Reserve:33.94Prop
T/R Reserve 8.35
Total Variable Costs/Hour:214.74
Average Speed (MPH):200.74
Cost/SM:0.93
Annual Insurance 8,861.16
Annual Hangar/Tiedown:5,162.43
Training:4,012.18
Total Fixed Costs:17,934.68
Hours/Year:423.26
Fixed Cost/Hour:87.34
Total Variable & Fixed Costs/Year:141,168.75
Total Costs/Hour:302.07
Total Cost/SM:1.42
Operating costs for a B58 Baron , fuel costs need to be recalculated and these figures are US dollars.
For an aircraft flying 250 to 500 hrs a year 3 times the direct cost of fuel gives a good rule of thumb
Last edited by aseanaero; 7th Sep 2009 at 15:01.