Cost of light aircraft ownership

[jezbowman]

Roughly (very!!) speaking:

If you fly up to 20 hours per year, hire.

Over 20 hours per year, syndicate.

Into the hundreds per year and ownership starts to make more sense.

Just to contrast that - I can justify the move to syndicate after just 8 hours per year. I.e. £100/hr for C152 hire or £40/mth £40/hr in our Jodel 1050 syndicate. The latter takes more time - i.e. maintainance, cleaning, etc but that's part of the fun in my mind.

[Justiciar]

that's part of the fun in my mind.

Hit the nail on the head You want to save money: don't take up flying. I love being involved in my Group; to think that the lovely Chipmunk sitting on the grass in the afternoon sun is mine (well ours, actually). We are particularly lucky in that we have no monthly, no capital contribution and just an annual membership fee But, even with a monthly charge it would be worth it. It is all a balance, but you can't value to pride of ownership. It is a world away from negotiating the huge hourly rental on a 40 year old spam can.

[Lister Noble]

That local club Chipmunk is good value,I was sorely tempted and still may be,but the L4 Cub beats it hands down for cost per hour.
Lister

[IO540]

You want to save money: don't take up flying

You want to save money: don't take up anything at all. You are certain to die rich And if you keep your trousers zipped up for good measure, you will die even richer

But it would be a very uninteresting life.

[hatzflyer]

Justicair, will be at Tibenham all weekend with the jodel. John

[JW411]

Justiciar:

Breakdown as follows:

Last CofA - £4600, Insurance - £3500, Parking - £1825, Last two 50-hour checks - £1800. That adds up to £11,725.

[IO540]

That's quite a lot but perhaps it reflects an older airframe. I know of a C150 which costs £7000 for the Annual.

On my 2002 N-reg TB20 I pay

Annual £2800 + VAT (I think that is really pricey; I know I am paying the G-reg, Part-M, rate... but the firm is organised and gets it done in 3 days.

Insurance £2500

Hangarage £5000 + VAT

50hr checks cost me:

£60 oil
£12 oil filter
Half a day's labour
A few other bits

Mind you, I haven't told you about Lyco's famous SB569A

[JW411]

But the other side of the equation to be offset on the balance sheet is the lease income that I receive by dint of having the aircraft on a "Public Transport C of A". (That figure, however, is between me, my accountant and HMRC).

The fact that the aircraft is on an EASA ARC also makes it more saleable when the time comes (I hope)!

[dont overfil]

My 20 year old Archer cost £8000 per year doing 300+ hours/year with a flying club. No hangerage fees.
That was 10 years ago.
DO.

[Busbo]

Thanks everyone for their advice.

I'm looking at what aircraft type to use for the business and that all depends on the market here. I'm considering basing the aircraft somewhere around Edinburgh/Perth.

Other similar non-equity schemes south of the border use seem to use various cirrus models which despite their significant hourly cost work out economically to get places due to their speed. However if the core market here is the "sight-seeing with family and friends" type of pilot then although nice the cirrus isn't really ideal for and a trusty 172 would probably fit the bill.

There is of course the hour-builder market which I would imagine exists everywhere. I have however been told to be cautious of such pilots due to their inexperience, lack of care and tendency to incorrectly record hours!

If anyone has any views I'd be keen to hear them.

Also, does anyone know if its possible to find out numbers of flying license holders in a particular area?

[IO540]

I used to rent out a good quality IFR tourer (TB20) a few years ago. I've written about it here already 1-2 years ago but here's a few details:

Hard to find quality customers. Most good pilots are not renters; they are owners or part-owners already. Some renters are good but the % with scary attitudes to flying and life generally makes one's hair stand on end sometimes, and frustrates running a business around anything better than a piece of wreckage. This is why so many businesses have tough currency rules (which so many people moan about on pilot forums ).

This in turn makes it hard to find enough customers. If you are a pilot yourself and fly the said aircraft, this can result in you being a substantial (or the biggest) customer of the business, and this will attract HMRC attention. The tax inspectors are nowadays cynical crooks who are attracted to anything involving boats, planes, horses, prostitution, etc. (i.e. any business known for cash practices or more particularly known for instances where the proprietor gets a personal benefit from the business) knowing that any successful businessman will pay them off with a cheque regardless of any justice issues. This makes easy picking for an inspector wishing to maximise his promotion prospects.

I don't think it is possible to do this with good quality hardware unless one commits people big-time, by the purchase of hour blocks like the Cirrus businesses do.

Of course it can be done around wreckage - that is how most of the self fly hire business works. If you can eliminate the depreciation, life is a lot easier In this case, the way to minimise costs is to run a fleet of several identical planes which can be maintained together with parts bought together, mail order from the USA whenever possible, and the ultimate recipe is for the proprietor to be a CAA LAME who can do the maintenance I see several businesses doing exactly this and they all seem to do well. Around well maintained, very simple, very simply equipped in avionics terms, old wreckage...

[Justiciar]

JW411 That does seem very expensive even allowing for the public transport element of the C of A. Our last insurance, based on a hull value of £22k was around £1600! The other figures also generally look high, but then it is a function of usage.

Lister: Your would be welcome any time. The Cub was great but you can't turn it upside down

Hatzflyer: Sorry we keep missing each other. I have been away in the caravan over the weekend so unavailable for flying in this glorious weather My next couple of weekends are similarly spoken for. Perhaps we could meet one evening? I will buy the beer - after the flying of course

[princepilot]

Hi,

How would a microlight compare to this , if it was stored in your own hangar in your own land?

[Justiciar]

How would a microlight compare to this

The biggest single fixed cost is insurance after hangerage, so if you can take that out of the equation you are looking at cheap flying. I imagine microlights are similar to Permit aircraft, i.e. £300 to £400 a year for permit renewal, and say £100 (err on side of caution) for 25 hour oil change, etc. Insurance is the one you need to get a couple of quotes on; much of the premium is dictated by hull value.

[princepilot]

So say insurance was £750 and the yearly maintenance was say £250 thats only £1000

Add in say £10 per hour engine fund and the wet rate could be as low as £30 per hour (based on say 15lph fuel burn) with a £1000 fixed cost per year

Say you flew 6hrs a month , thats 72hrs at £30 which is £2160 +£1000 direct costs , with a total of £3160 equivalent to just over £60 per week costs. Man my wife could blow that on shoes , i will have to chop her feet off!


Now that is what i call cheap flying along with three axis microlights today are very advanced and in some ways better than the c152's of the sky.

Matt


Now thats what i call cheap flying!

[g21agoose]

The tax inspectors are nowadays cynical crooks who are attracted to anything involving boats, planes, horses, prostitution,

Boats, planes, horses and prostitution....................aahh.... my retirement plans..................

[Justiciar]

Now that is what i call cheap flying

Many people have come to the same conclusion of late, which is why you are seeing a lot of old iron advertised at significantly less than two years ago. I think people have had enough of expensive over regulated C of A aeroplanes.

I recently did some number crunching using a cheap single seater permit aircraft as a model and the figures for 40 hours a year come out at less than £50 per hours all in (including a quote of £350 for insurance ). In the expensive south east they will be higher, but up in sunny flat East Anglia they are achievable

[Big Pistons Forever]

Busbo

It would be helpfull to understand your motivation for structuring this venture as a no equity group? Is it to make a profit, or subsidise your own flying ?
A fellow at my home airport tried this with a C 150 a few years ago. It was a complete disaster as most of the guys flying it were one of two types

1) Complete F**** ups who had been severly restricted or in one case, even banned by the 2 schools on the field, or

2) Young time builders who wanted the cheapest possible flying and cut every corner.

The result was 8 months into the venture at the airplanes first annual inspection the aircraft was declared "not economically repairable" due to nose wheel and firewall damage from probable multiple heavy landings, a wind damaged rudder, and all 4 cylinders U/S due to severe overheating due to probable frequent and massive over leaning, and a basically destroyed interior.

The cheapest way to fly for most pilots is to rent. The best way to fly is in your own airplane. The best compromise between the two IMHO is a equity group of around 4 partners. This is small enough that you have good availabilty and lower possibilty of interpilot strife and yet fixed cost are spread around enough to achieve real savings.

[Busbo]

Big Pistons,

Thanks for your reply. In answer to your question my motivation is to make a profitable business out of it, hopefully building a collection of aeroplanes at various locations.

I first thought of the basic idea whereby people paid a lump sum at the start of the year and bought a set number of hours with nothing else to pay. However I quickly found out that similar schemes are already being run in the south of England but their members pay on a monthly basis which seemed much more sensible considering one of the main advantages overgroup ownership is not needing a lump sum up-front. That combined with the set-fees and nothing more.

I've been trying to figure out what, if any, market exists in my area. Your comment is not the first I've had along those lines and while I had first thought a cheap bit of wreckage for hour-builders might be a great way to get the business started I'm starting to change my mind. Perhaps the more expensive "IFR tourer" might be the way to go. Hopefully that would put off virtually all hour-builders and get pilots of a slightly higher caliber. However I do realise that a pilot's ability isn't necessarily proportional to his wallet size.

I was hoping I wouldn't need to go down that road as that's obviously a much more pricey set-up but then again it would set me apart from the schools up here operating and hiring the usual 172s and PA28s.

[Justiciar]

In answer to your question my motivation is to make a profitable business out of it

The old joke about "how do you make a small fortune in aviation?" comes to mind: start with a large fortune and buy an aircraft

Presumably you have carried out some in depth research into the market for what you want to do. Certainly you will want to do this before spending a penny on an aircraft. My feeling is, certainly in the area where I live, that the market for an IFR tourer is very small indeed. I can think of very few people who tour long distances IFR (or VFR for that matter) and those that do tend to be owners already, as IO540 pointed out a while ago. Those that do tour and who don't have their own aircraft may go for say a week to ten days a year, which when you apply this across the very small market means that you risk the aircraft spending most of its time in the hangar. There are a number of IFR type aircraft in my area for sale either out right or for shares which have been on the market a very long time, including a PA28 180 and a couple of Arrows. I would suggest doing a trawl through adverts to see what is already available in your area and for how long it has been on the market. That shoudl give you some guide as to what interest there is in the type of set up you are proposing.