Is RACWA on finals? YOU WERE WARNED!!

[AirSic]

I refer to the July 2010 edition of Tarmac Topics, an official publication of RACWA, in particular to an article written by Mr Jack Gregor, President and the subsequent resignation of the club CEO on Friday 16th July 2010, Mr Alan Hoffman.

A passage of the article reads...

"Our total hours flown is down by over 2ooo hours for the year. This is a huge revenue loss for us. The reduction has been so severe that our efforts to contain our costs have not been effective enough."

".....Alan Hoffman gave notice that a new business model was essential."

Now he resigns...it's all too hard.

"We have engaged the leading business remodelling and accounting firm WHK Horath to review our business plan and advise us of any changes they think necessary. Howarth are also looking at more effective ways for us to manage the various entities under the Royal Aero Club. This could well mean rolling all our flying activites under the Royal Aero Banner."

Jack, I have a news flash for you.....Aero clubs make money by looking after their members. The reason that you are in this trouble to start with is that you FAILED TO LISTEN TO THE MEMBERS OF THE CLUB. You pontificated about how YOU knew best and everyone else was stupid. The members told you that rolling our flying activities under the Royal Aero Banner was essential. You were trying to be smart.

The CEO - for a club ?- was trying, with Jack Gregor, to run this as a company....seriously, a CEO being paid $$$$ ??? without any income production, or aviation experience. The acquisition of a training business, that was in essence already the clubs for $1m + and what a debacle that has been, the failed attempt at fleet upgrade, on more than 3 occassions, and the half arsed development of the murrayfield project...the list goes on!

I would suggest that the club is now faced with the real threat, and notice has been given, that it will spend some serious monies, that it doesn't have, to try and justify what hasn't worked and move forward with the same morons at the helm.

Jack...get it through your thick skull...RACWA is a club, nothing more, nothing less. Don't spend vast amounts of members money being told that you are losing money...you know that, and for Pete's sake, don't employee some company director that doesn't believe in combining income streams but runs the show as if each element has to be self profitable.....IT WILL NOT WORK!

Listen to the members and realise that this is not a Pty Ltd International trading business....it is a Inc club.

I hope it's not too late, lets see if you can do a Go-Around!

[sixtiesrelic]

Ah! ... the brave new world where people with diplomas know EVERYthing ....
They learned it out of a book at Uni.
Book was written by some dopy dill who has has NO common sense and has never been out in the real world, he hid in the cloisters of the halls of learning.
Where'd he get the info for his book?
He interviewed common folk with common sense.
Problem is... the interviewees weren't asked ALL the questions and expected the dill would know the common sensical stuff.
These bean counters are everywhere, stuffing up companies, clubs etc with their spread shaeets and white boards and "6.4823 units".
Units = people. They can't seem to understand that you can have six people or you can have seven people.
Never mind. It's the ordinary people who pick up the peices and get the show working again while the manager puts includes this episode in his CV and goes on to a higher place to stuff up another company.
It'll take time for the club to get back on it's feet but there's enough common sense and expertise for that to happen amongst the members who'll do it for free.

[solowflyer]

I have never had anything to do with the club and probably never will. I lost intrest when I asked them to do a BFR and they wanted me to do 5 hrs for it

[Ex FSO GRIFFO]

Some time ago, at a VERY well attended meeting at the clubrooms, in which the attending members appeared to have VERY little say, the said Pres. emphatically pronounced that there would be no cross-subsidisation of 'entities' - that each 'entity' within the Club would be self supporting.......

I know we have all 'moved forward', but when I was running a couple of country 'aero clubs' many years ago, it was common practice for the various fund raising events and the 'bar'/ bbq, being used to help in providing a lower rate for the members....

Seemed to work OK then.......it was after all, a CLUB for its members.....

But times have changed....now its all business....and 'touch & go'....

[lethalw]

Quote:
"Maybe the hoards of CPL students that used to be there have realised what a dead end career flying has become and are pursuing more lucrative careers."

And what makes aviation a dead-end career??? Didn't everyone's license begin under the instruction by a person in this supposed dead-end career? I suspect it's negativity such as this that turns people off. Ok lets face it the pay is not great to start off with, but is pay everything? Believe it or not, there ARE people out there who value quality of job just as much as financial reward. And it's these people that have passion for the industry and who we need to encourage to stay in the industry.

That's my rant over, not trying to flame anyone in particular, but I think the issue at heart in THIS thread is not the supposed dead-end status of the aviation industry....

[lethalw]

I agree with you being realistic. I can't deny that. But there will always be those that enjoy what they do, for these people a good career choice may not be entirely based on finance, and most 18yo's with a fresh Comm don't have the family thing so they are maybe prepared to 'live the life' for a year or so and move up the chain. I guess it comes down to each individual as to what they desire in their working life...

I'm happy doing what I do, so I guess I'm one of the hens teeth then, but then again I've been very fortunate in my 10 or so years in the industry, so can't speak for the new comers of today!

Your last statement, however, I agree with in principle. A club, regardless of size, always needs to remember that at the end of the day it is the members that need to be looked after and catered for. Without members, there is no club.

[AirSic]

sixtiesrelic, you are absolutely right. We live in a day when the Govt. has decided that they can revenue raise by "training" everyone and anyone then licencing that "profession". Most jobs these days require Diplomas, NOT ON THE JOB TRAINING AND LIFE EXPERIENCE. Then we end up with "I can do it, I have the piece of paper that says so!" mentality.

As Griffo said, a well attended meeting was held, and these stooges brought a lawyer into the meeting, "so that all members can be assured we are doing the right thing"...the minute a member asked a "hairy" question, the CEO and President hid behind the lawyer so as not to have to answer the question.

I am very passionate about the club.....I have been involved in one way or the other with it since I was 16. I remember attending the "great halls" of the demountable when it was in existence.

The basis of the club is strong, but dwindling, the members.

The experiences of people like solowflyer are unfortunate and probably have been experienced at other clubs around Australia and dare I say abroad. These things are inexcusable but inevitable where the rewards of "hours earnt means get out of here quicker". This is one of the reasons why RACWA NEEDS to change the way it employs its instructors.(only one of the issues).

I can name some exceptional instructors that have graced the apron in front of RACWA, not to mention the bar (which is not operated by RACWA anymore). It is natural that people move on, however, Van Gough is correct....life is not a dress rehersal, people want the best they can get for themselves and their families. Pay the instructors properly, KEEP them at the club. If they are not interested in staying, that's fine, don't employ them as instructors in the first place. Instigate a return of service and make it worth their while in hanging around. The interests of the many far outway the interests of the few.

I understand that training new comers is a necessity, but we don't have to employ every person that finishes a comm. or inst. rating.

If RACWA concentrated on providing the best training at a reasonable price, the students will come, then will come the dividends such as money to support the members, then they will come and in turn the circle goes round.

I fear the damage has been done. Bank finance is in place and with limited improved assets and increasing Commercial interest rates, combined with a decrease in revenue, the last thing we as members need is to be throwing money away needlessly.

As sixtiesrelic has said, there are plenty of members with the skills and experience that COULD help the club through this turmoil, but again, many of them have become so disillusioned and dispondent by being shoved away, I fear that they won't be there to help.

Once the CEO and committee have finally been removed, only then will we the members be able to cut through the red tape placed by them, and the Bull#$it will be seen for what it is. Then we might have a chance to take back what once was a great place to fly, instead of the clinical, dollar chasing whore house it has become.

[FokkerInYour12]

Ignoring the other "business areas" at RACWA but just looking at flying rates.

Perhaps it's time that RACWA members got used to paying $250/hr flying costs in a 172 rather than sub $200. Sub $200 is not a sustainable rate unless the level of utilisation is very high. On paper those rates might achieve $5-$10/hr "profit" but unscheduled maintenance is the killer.

This would also increase the profitability of other flying clubs/training companies at Jandakot too, making a generally more viable airstrip.

For too long have RACWA set below market rates for flying.

RACWA members need to realise that flying is not a poor man's hobby.

[Van Gough]

Perhaps it's time that RACWA members got used to paying $250/hr flying costs in a 172 rather than sub $200. Sub $200 is not a sustainable rate unless the level of utilisation is very high. On paper those rates might achieve $5-$10/hr "profit" but unscheduled maintenance is the killer.

Maybe if they got some new aircraft which are not falling apart and cost far less to run as well as reducing all the overheads/managers they could have aircraft rates which are actually affordable again.

I used to love going down to RACWA and renting a plane for a couple of hours. Now it just feels like a ripoff - paying for all the office people etc.

It almost seems as if knocking down the building/morgue and starting again with a small transportable like used to be there 20 years ago would be a good idea...

[YPJT]

You have to wonder also whether the purchase of WAAC (reputedly for a 7 figure sum) was a smart move?

[FokkerInYour12]

Unfortunately new aircraft have a financing cost associated with them.

eg. Let's say a new aircraft costs $300,000 versus a "30 year old" aircraft at $80,000.

Both financed on a 5 year plan @ 8% interest (which is generous).

New aircraft: Monthly repayments $6100. Total interest paid over 5 years: $65000.

Second hand aircract repayments: Monthly repayments $1600, Total interest paid: $17300

Assume also an average utilisation of 300 hours per year.

The new aircraft costs $244 per hour just on financing alone. Add Avgas ($60), 50 hourlies ($200 each), 100 hourlies (say $2K each), insurance $6K per annum, parking outside on tarmac $1.2K, and you're now looking at $263/hr - then add GST and it's $290/hr. You need to charge this before you even start making a profit. Now a reasonable margin on costs would be 20% (remember you have to also cover admin staff) and you're up to $375/hr inc GST as a chargeout rate.

On the old aircraft, bump up 100 hoursly to $4K each, and another $2K of unscheduled maintenance per year, and your costs are now $179/hr inc GST. Add 20% margin and you're looking at $215/hr inc GST as a chargeout rate.

Now staffing - if you say it takes the equivalent of 1 staff member per 5 aircraft and you pay that staff member an average admin wage of $50,000 that increases your costs by another $30/hr. Add lease rates, accountants, building facilities, briefing rooms, computers for flight planning, etc. and this clearly adds even more.

So why is RACWA perservering with such low low rates?

If they were realistic it would be $260/hr inc GST for a 30 yr old Cessna 172 and $450/hr inc GST for a new one. Perhaps even more.

There's just too many people with long memories thinking "well when I learned to fly it was under $100/hr - these prices are ridiculous!"

This is a problem Australia-wide too - not just RACWA.

[Van Gough]

Let's say a new aircraft costs $300,000 versus a "30 year old" aircraft at $80,000.

What about if they sold 2 old aircraft and replaced with one new? Most of the fleet sits there mostly unused anyway. Less aircraft would mean higher utilization of the newer ones..

If they have to charge $450 an hour they might as well close the doors now.

[YPJT]

I recently saw their rate sheet and by the time you have added on the many extras (such as the instructor and briefng fee and the way marked up landing fees) a lesson in one of thier 152s are going out at about $100 an hour MORE than other schools that have aircraft less than five years old.

The overheads there must be phenomenal. But at the end of the day it's not managers and chief this and that (and all the associated politics) that you need, it's bums on seats and happy punters. And a lot of those are moving elsewhere to sit on newer seats for a more reasonable rate.

There are some great people working at RACWA and I wish them well. But it lost it's way when they built the "Taj Mahal" and since losing the old building it's had about the same atmosphere as the Perth Domestic Terminal.

Whatever is happening there is something that seems to happen to most clubs at some time or another, the committee and the members grow apart and often this is the result of bad communication and misunderstanding, chinese whispers etc. But having a commitee is the price RACWA have to pay if they want to keep thier comfortable tax status.

[prospector]

"If they have to charge $450 an hour they might as well close the doors now."

What would be the average wage for a young buck these days?

When I started an hour in a PA18 was equivalent to a weeks wages. It certainly made for a concentrated effort to pass all the flight tests, theory exams, in the shortest possible time. And after the first job was gained to be paid for flying, it was well worth the effort.

Just for comparison, that PA18 cost three pound ten shillings an hour.

[FRQ Charlie Bravo]

The best thing about the RACWA is that it acts as a suck hole keeping the riff-raff to that side of JT. I can count the number of times I've been there on one set of hands and feet and the number of times I've left happy or with my mission completed on one hand (sans thumb).

FRQ CB

[kellykelpie]

It is such a shame to hear the great club is on tough times. I too have been going down there since I was a kid, learned to fly there and got my first job there. There is truth in the comment that the club lost its great atmosphere when the old building was replaced.

It has been on tough times before, many years ago when JD took over. He managed to turn it around. Maybe someone can step up and do the same again.

[Rich-Fine-Green]

RACWA new vs. old.

Van Gough is closest to the mark.

Cutting the fleet in half with new aircraft makes sense.

Better scheduling and faster maintenance turnaround would allow for better utilisation of a much smaller fleet.

Secondary savings would also be;

A reduction in maintenance hours would also allow for a few less staff in the workshop.

A smaller fleet would mean one or two less staff in admin.

A firm fleet turnover policy would mean the fleet would be in warranty always
and allow for further savings in breakdown parts. - i.e. start with a new fleet (half the size) and changeover every 3 years when the aircraft (with higher utilisation) reach 3,000 hours. The large USA fleet operators have always run this way - why not RACWA....

Saving of parking fees.

A complete new fleet would help attract new members.

About time to retire the Mooney fleet at least.

[Van Gough]

But it lost it's way when they built the "Taj Mahal" and since losing the old building it's had about the same atmosphere as the Perth Domestic Terminal.

Time to knock it down and start again

But having a commitee is the price RACWA have to pay if they want to keep thier comfortable tax status.

Logic would say that having a comfortable tax status should mean LOWEST rates at YPJT not HIGHEST

[Lodown]

Silly me! I would have thought parts of the problem were GA flight hours in the gurgler and a decrease in the number of students in general. But what would I know?

[htran]

Ignoring the other "business areas" at RACWA but just looking at flying rates.

Perhaps it's time that RACWA members got used to paying $250/hr flying costs in a 172 rather than sub $200. Sub $200 is not a sustainable rate unless the level of utilisation is very high. On paper those rates might achieve $5-$10/hr "profit" but unscheduled maintenance is the killer.

This would also increase the profitability of other flying clubs/training companies at Jandakot too, making a generally more viable airstrip.

For too long have RACWA set below market rates for flying.

RACWA members need to realise that flying is not a poor man's hobby.

Wasn't the issue not enough flying hours, rather than making a loss because the price is too low?

Increasing the price would result in even less flying hours.

I joined RACWA 18 months ago because I thought because it was a non for profit club, the costs would be lower and a more club type atmosphere. The monthly comps are nice, but there isn't much for a club atmosphere, I felt like the WAAC/CPL training kind of dominated and RACWA felt more like a TAFE. One of my instructors who no longer works at RACWA spent half the time texting during my pre-solo circuits! That said I have flown with some really good instructors and don't like how much intructor fees have risen yet the instructors didn't get much of that.

Contrast to my initial 10 hours of training at Basair in Bankstown, where I really felt like the instructors "cared", RACWA didn't seem to be what I had expected.

For example, Dual in C172 at RACWA a not for profit org, $229 + $110

At Basair a for profit company, $254 Dual.

Now I'm not complaining that the price is too high, I'm just saying maybe out costs are too high, or MAYBE increasing prices will not result in more hours being flown.

I just recently did a DA40 conversion at TAC because I got sick and tired of waiting for the "new fleet", and even though I pay $297 + $100 for dual. the plane, its nice and new. So now that I can fly solo in it, I could pay $229 at RACWA for an old C172 or $297 for a new DA40. I think its great that the club has recently been doing weekend specials etc, because for $199 I probably would hire a C172 instead of a DA40, but if the price went to $250, I'd be inclined to pay the extra and fly a nice new plane.

For me its about value for money value for money.

I think that the club should get rid of WAAC and focus on "club" type activities to deliver value to members, rather than making a profit.