Potential Pitfalls of group ownership ?

[742-xx]

I've recently been considering joining a group at my local airfield.
I currently use a non-equity scheme but we're fairly restricted hours wise (max 3 hours) because we use school aircraft.
My question is - what are the potential pitfalls involved in group ownership ?
There is one currently up, but I heard that one person gave their share away. This made me wonder if there are possibly some financial obligations - such as, the engine needs replacing and we need a couple of grand off everyone in the group, or that sort of thing ?
Anyway, any feedback would be gratefully recieved.
Thanks.

[Choxolate]

I have been a member of several groups, as well as sole ownership.
First thing is to be happy with the other members of the group - it is not always about the money. Nothing is more irritating than one member not cleaning the aircraft, fuelling it, or generally not "pulling their weight" etc.
Money is of course important, I have never been a member of a non-equity group (how can it be group ownership without equity??).
Basic principle is that all members have an equal share in the assets of the group (aircraft, cash at bank, spares etc) which they have paid for.
Each member pays a monthly fee whether they fly or not - to cover the "fixed overheads" - insurance, hangarage, permit/CoA renewals, etc
In addition each member pays for hours flown (wet or dry depending on agreement) to cover maintenance costs, oil, etc
The monthly and hourly costs should allow the build up of a reasonable fund over a period, for major costs such as overhauls, repaints, fabric re-covering etc.
If there is an unexpected requirement for funds (e.g. blown engine) and there is not enough in the pot then a call may be required on all members to cover the cost, so be aware of this and make sure you have access to some funds if needed.
The big advantages are much reduced cost over sole ownership and (with a reasonably small group) access to aircraft whenever you want it.
Going back to my opening point - the other members are the key to a successful group. Do you all get on? Do you all have similar aims? Do you all have sufficient income? Is the agreement fair and equal for all members?
I have never regretted using group flying but would never join a group where I did not know the other members reasonably well first.

[Pace]

I was in a group of 4 on a retractable single ! This was a disaster financially too!
I am sure this is not typical but stands as a warning!
3 of the group were great one was a complete idiot and an excuse for a pilot!
He crash landed once meaning we lost the aircraft for six months and an insurance claim! From the first crash we had no end of avionic problems which continued to cost us dearly for an aircraft the rest of the group were not even having a chance to fly!
Then he landed gear up ! Not only was our usage minimal but digging into pockets maximum but when we sold it we lost half the value!
A complete disaster ; (
So beware but as I said I am sure my example is not typical!
Sad thing he was an arrogant bast rd who blamed everything but himself


Pace

[sharpend]

I mainly agree with Choxolate. I too have been in a group (of 12) and now have sole ownership. My experiences are:

1. Much reduced costs. Big plus.
2. Cannot fly exactly when you want and most certainly not 'at the drop of a hat'
3. Much more difficult to sell a share than a whole aeroplane. There is at least 2 members of my last group who cannot sell. I sold, but at a give-away price.
4. The aeroplane may well be left in a condition you don't like, i.e. empty or even at another airfield! Pilots sometime don't return on time, due weather etc.
5. Difficult to get everyone to agree to an upgrade or non essential repair.
6. Cannot sell the whole aeroplane unless a certain percentage agree.
7. Nice to fly with other group members . A plus.

[phiggsbroadband]

Hi 742, I am in a C172 group at Sleap, and without doing some very prolonged calculations, I am not too sure how it compares to flying a Club Aircraft.. financially. Some years there are unexpected bills to be paid for servicing of faulty parts that have broken.

However in the group we can take the plane out for a complete day (or days by arrangement.) so there is less urgency about meeting time slots.

I remember hiring a Club 172 for a trip to North Coates, on the North Sea coast. I had it booked from 11:30, but was told that the previous flyer was still out in it... He returned at about 13:00, and when I asked him where he had gone he said... North Coates! So that aircraft made two flights across the country that day, and still returned before the club closed, but it was a bit of a rush.

If you can ask your club about their policy on taking their aircraft out for a complete day, then maybe it might even be the better option. After all a non-profit club is really like a big group share, in that the assets of the club are owned by a large membership, and that any breakages or upgrades are paid for over a larger group of fliers.

[742-xx]

Thanks for the replies.
I suspected that this was probably a complicated issue.
I think that I've probably got things pretty good under the current setup.
The only downside is that I can't get a plane for a full day, unless when I turn up on the day, no one has it booked after me, in which case I can use it all day.

[A and C]

742

If you are a regular customer must flying clubs will cut a deal on the three hour rule, for instance if you want an overnight stop you take the aircraft after the last slot in the evening and return the aircraft in time for the second slot the next morning.

If you have the reputation for being reliable there are a number of ways you can cut such a deal.

[Big Pistons Forever]

I was in a 4 plane partnership on a C 180 on floats and I am now in a 2 person partnership on a Nanchang CJ6A.

I left the first partnership after 3 years mostly due to all the whining over the cost of maintenance. The other three partners were lower time PPL's and I carefully explained the realities of airplane ownership before we bought the plane but they still moaned and dripped about everything that needed to be fixed.

My current partner and I think alike about maintenance and we have a highly successful partnership. I think a 2 person partnership is the best. All fixed costs are cut in half but in practice it is pretty much like you have your own airplane as you will hardly ever have scheduling conflicts. Also airplanes like regular use and it really takes 2 owners to give the airplane enough exercise.

FYI for the 4 plane partnership we assigned "ownership" of the airplane on a weekly rotating basis . If you wanted to fly the aircraft when it was not your week you had to get approval from that weeks "owner".

[Maoraigh1]

I've been in a group owning a Jodel DR1050 since January 1990. There are currently six members. One has been a member longer than me - two have been members for over 15 years. I bought my share for £1600. I have occasionally had to put up cash over the years, and the total would now be £1600+£900. Shares are now £2200. That's less than 1/6 of insured value, and there's an engine fund as well. At £50 per month, and £60 per tach hour, it's excellent value for me.
Overall its less than £69 per tach hour for the 11 months so far. However it's grossly expensive for some members who hardly fly at all. Availability is excellent, and there's no restriction on taking it awayfor a week outside of winter - it's wood/fabtric and needs hangarage in bad weather. It's been to France - from Scotland.Cost includes hangarage at our base airfield. It's run on mogas, and as a Permit aircraft we do most of our maintenance.

[Genghis the Engineer]

I've been a sole owner, and a renter, but am mostly a parallel and serial group member.

Benefits of group membership:-

- Cheaper so long as you fly at-least 2, preferably 3 hours per month on average (usually, whenever I've worked it out)
- You can take the aeroplane away for days, weekends, or weeks.
- You get to know the aeroplane much better
- You can share all the aggro of looking after the aeroplane
- Getting to fly much more interesting aeroplanes than you can usually rent.
- Being allowed to use your own judgement about flying conditions more.


Downsides:-

- If you stop flying for a while, or are trying to sell your share, the bills still come and need to be paid, and so do your working contributions to the group (turn to wash it, etc.)
-The occasional a****s who crop up in syndicates as they do in any other walk of life.
- Being constrained to flying one type most of the time.
- If there's a big and unexpected bill, the dreaded "cash-call".
- Having to juggle occasionally with other owners who want it.


For me personally, the upsides: most especially being able to take the aeroplane away for a long time (compared to renting), and cost (compared to either renting or sole ownership) much outweigh the downsides.

But for other people, certainly, the equations work out differently. I'd say that if you fly less than 2 hours per month - rent. If you are likely to fly more than 6 hours per month on average, consider sole ownership - but expect a lot more work and money for that privilege.

And always check the following make sense for you:-

- The personalities of the group members
- The syndicate rules
- The accounts
- How well the aircraft seems to be being looked after.
- The cash reserves and planning for big ticket items (engine overhaul, annual, CofA, recovering....)


My three current syndicates are:-

Flexwing: £2k 1/3rd share, £35/month + fuel, £75pa club membership
Modern group A: £1200 1/20th share, £40/month, £90/hr, £125pa club membership
Vintage permit group A:£1k 1/10th share, £45/month, £60/hr. £300 club membership.

Do watch out for the extra cost of local club memberships and landing fees [all three of mine the landing fees are included at-least, but that's not universal] - I'd save a lot of money if all three of my aeroplanes were in one place. But ultimately, I pay £2k per year for the privilege of being able to choose from 3 aeroplanes I like, at very low prices, across which I fly about 70 hours per year: all of them I can take away for weeks at a time, and 2 of them for weekends. That works well for me.

G

[sharpend]

Of course, the one big advantage of sole ownership over group ownership or club rental is the fact that you own it; the joy of ownership.

Would you share your wife? Would you rent her?

Don't answer that!

But of course we know that aeroplanes are far more important and less expensive

[Joe le Taxi]

Pace - I had an almost identical experience with a glider syndicate, except that both the other partners were clueless. The first decided to try and start the turbo after losing the ridge lift, and rather predictably cartwheeled it into an inadequate field. When the other landed it gear up, I decided to get out at any cost, which turned out to be a big cost, because the repairs had taken their toll on what was a beautiful £100k glider, and also cos other members at the club had more sense! The irony was, the self appointed leader of the syndicate hadn't even let me fly the glider for several months, until I had completed a regime of training of his own devising, despite 1000 hours of gliding, and previously owning an slmg!

On the other hand, I had two great syndicates, one in another glider, and in a PA28. On balance, I would avoid syndicates, and just get something cheaper.

[Pace]

Joe

Thats the sad thing that once there is an accident damage history the values plummet.
One bad apple in a group can destroy the group, cause a lot of bad feeling as people resent paying monthly fees on an aircraft they cannot use and who's value they see dropping because of the antics of one.

the problem of ownership is that any problems and they become your problem while with renting you walk away.

As i said my situation was probably not reflective of most groups and there are many which have been running successfully for years.

Obviously the more hours you fly the more attractive private ownership becomes but it makes me smile how many private owners down grade what they pay an hour in real terms from what they are really paying.
its almost like they do not really want to know the true cost

[Shoestring Flyer]

The best group to have is a group of one! No hassles, no arguments no fuss.
You can fly when you want, upgrade the avionics when you want or not and generally look after it how you want.
I would say lower your sights on the type of aircraft you want and take pride in knowing that what you have is all yours!

[Beethoven]

It is true that the members of a group are after where the value or otherwise of a syndicate lies. I have been in 3 groups in my time and am a day VFR type, an hour here or there and the odd (sometimes very odd..) land away.

A couple of years ago I thought I had found the perfect share in a PA28...local grass airfied...8 miles from home..low monthlies and hourlies etc. however it soon became apparent that one member viewed it as his personal weekend aircraft and had it booked months in advance for days at a time. So much so that the rest of the group had to try to find the "crumbs" left and be satisfied with them.

I had to sell this one as I was not happy to fund someone else's flying to that extent. He even neglected to attend a group cleaning session, but showed up immediately after it to fly the shiny clean aeroplane.

Upon trying to sell the aircraft, the group "leader" should we say was not particularly happy with the person I had decided to sell it to (not for flying reasons I might add as he had never flown with him) and decided to invent a new set of rules that did not exist about how he had to approve new members etc. This was not in the rules at all. However he did make it as difficult as possible to sell to my chosen buyer.

Life being too short to deal with throbbers like this I found a group at a close by airfield with a less than ideal aircraft type but this group, and its trustee are the polar opposite. I now rent an aircraft when I need a 4 seater and fuly intend to stay in this group.

With syndicates it pays to be flexible on your aircraft choice....and I would always insist at being allowed to look at the booking diary to see if any names seem to be hogging it.

[phiggsbroadband]

There is one further thing to take into account, in the choice between Group Share or Club Aircraft. That is, does your club insist on a check flight if you have less than 30 days currency? If you get poor weather at the wrong time, you can end up paying for a lot of instructors time.

Some Groups don't seem to mind if one member has been away over the winter months, and may not have any rules covering minimum currency.

[A and C]

Access !

The biggest problem with groups is the weekend aircraft hog, knowing his the only group I have been in had a system were each member had the aircraft for a week at a time his personal use in turn.

The rota was published annually and days swapped to as required, the system worked very well and prevented any of the weekend disputes that most groups have.

[Genghis the Engineer]

Most syndicates I've been in limit to 2 or 3 the number of bookings anybody's allowed in the diary ahead of time. That pretty much solves the weekend-hog problem. One I'm currently in limits us all to a maximum half day each weekend as well - I don't particularly like that rule as I'm fond of being able to take the aeroplane away for a full day, but it also serves the purpose (and a couple of times I've just emailed the whole syndicate well ahead of time and got agreement anyhow).

G

[Maoraigh1]

Our group of 6 has 1who works a normal week, 1 works offshore - weeks can't fly, then weeks free. 2 retired, and available any time. 2 "retired" but work as if they weren't. 5 fly very little at present. I get a very good bargain.
One advantage of a group is others to help if you have a problem - e.g. our exhaust cracked after landing on hilltop strip with the only hangar occupied by the strip-owner's aircraft.
We have no currency rule - but our only low hour member is very cautious about flying solo.
We used to have a 10 hour per month rule - then it became priority to others after you've flown 10 hours in the month. And NO booking for the Strut Fly-in - an agreed person flies it there and back, and ever member attending can fly it.
As well as personalities, the time free to fly also matters.
My personality would NOT fit with an equal share owner who claimed to control the group - and neither would the guys I share with.