The Economics of Ownership
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The Economics of Ownership
1. Does anyone know of any detailed information that is in the public domain and which would give me an oveview of the economics of small plane ownership - ie. PA28, Robin, etc. ?
2. I'm puzzled why so many people seem to be going overseas to build hours when so many planes are sitting idle in hangars just waiting to be used. Surely, if I was to buy a plane and hire it out for a minimal rate then this would stem the exodus and help people achieve their goals at the same time. Or, am I missing something here?
If you have any thoughts on either of these two points, I would really like to hear from you.
Cheers,
2. I'm puzzled why so many people seem to be going overseas to build hours when so many planes are sitting idle in hangars just waiting to be used. Surely, if I was to buy a plane and hire it out for a minimal rate then this would stem the exodus and help people achieve their goals at the same time. Or, am I missing something here?
If you have any thoughts on either of these two points, I would really like to hear from you.
Cheers,
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ian
Aircraft ownership can be likened to owning a cherished car (or any other item) - you lavish love and attention on it and wouldn't let just anybody drive.
I'm in a syndicate of 5, we all get on well, we've all got quite a few hours and we know the aeroplane. If we were to let an outsider in to fly it on a fee paying basis and he caused damage then we would lose the use of it through somebody else's misfortune. If someone in the group does it then fine, that contingency is covered in the group rules. But if an hours builder did it we'd be left to sort out the problem whilst they went onto the next 'victim'.
So - that's the reason why. Anyone wants to hours build, then rent or buy themselves. No ham fisted newbie is getting their hands on my pride and joy
That's the personal view, now the practicality view. In the UK to do the above the aircraft would have to be on a Public Transport CofA, with the commensurate cost of the additional maintenance. Also the insurance costs would possibly be higher.
Let's be honest - the vast majority of aircraft owners or part owners don't have to or want to rent out their aircraft, because they've got it for their enjoyment, not to make money out of it - let's face it if you can afford to own or part own you don't need any supplemental useage and income.
CM
Aircraft ownership can be likened to owning a cherished car (or any other item) - you lavish love and attention on it and wouldn't let just anybody drive.
I'm in a syndicate of 5, we all get on well, we've all got quite a few hours and we know the aeroplane. If we were to let an outsider in to fly it on a fee paying basis and he caused damage then we would lose the use of it through somebody else's misfortune. If someone in the group does it then fine, that contingency is covered in the group rules. But if an hours builder did it we'd be left to sort out the problem whilst they went onto the next 'victim'.
So - that's the reason why. Anyone wants to hours build, then rent or buy themselves. No ham fisted newbie is getting their hands on my pride and joy
That's the personal view, now the practicality view. In the UK to do the above the aircraft would have to be on a Public Transport CofA, with the commensurate cost of the additional maintenance. Also the insurance costs would possibly be higher.
Let's be honest - the vast majority of aircraft owners or part owners don't have to or want to rent out their aircraft, because they've got it for their enjoyment, not to make money out of it - let's face it if you can afford to own or part own you don't need any supplemental useage and income.
CM
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Generally, flying for fun is an affair of the heart not of accounts and cost-benefit-analysis.
That being said there was a good article in the last-but-one Popular Flying from a guy with a Jodel who had kept a very detailed record of his expenses over about 3 years.
Group ownership is an excellent way to go in my opinion, for affordability & often keeping the thing flying a decent number of hours a year. Also variety. I think I'd rather have shares in 3 different types of plane than own a single one.
That being said there was a good article in the last-but-one Popular Flying from a guy with a Jodel who had kept a very detailed record of his expenses over about 3 years.
Group ownership is an excellent way to go in my opinion, for affordability & often keeping the thing flying a decent number of hours a year. Also variety. I think I'd rather have shares in 3 different types of plane than own a single one.
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I subscribe entirely to Chilli Monsters point.
The planes might be sat idle in the hangars but the majority of a/c owners would rather have that situation when they are busy doing other things than worrying about a stranger bashing around the countryside "hours building".
When you own a plane you make every endeavour to look after it as not only do you rely on it to keep you in the air, you also try to minimise those annual and six monthly bills.
Once a "hirer" has finished with a plane is he going to clean the bugs off, leave it as tidy as the owner would inside, fill it with fuel, check for any signs of leaks etc etc?
I doubt it.
I know a person who was recently approached by an hours builder who wanted to rack up some hours in his Saratoga. The a/c owner took the request almost as an insult and politely explained that £500 per hour would just about be enough to stop him worrying himself sick when he knew that his plane was in the air with someone else at the controls.
The planes might be sat idle in the hangars but the majority of a/c owners would rather have that situation when they are busy doing other things than worrying about a stranger bashing around the countryside "hours building".
When you own a plane you make every endeavour to look after it as not only do you rely on it to keep you in the air, you also try to minimise those annual and six monthly bills.
Once a "hirer" has finished with a plane is he going to clean the bugs off, leave it as tidy as the owner would inside, fill it with fuel, check for any signs of leaks etc etc?
I doubt it.
I know a person who was recently approached by an hours builder who wanted to rack up some hours in his Saratoga. The a/c owner took the request almost as an insult and politely explained that £500 per hour would just about be enough to stop him worrying himself sick when he knew that his plane was in the air with someone else at the controls.
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It would be like hiring a car i suppose, and we all know how hire cars get thrashed......... Point being is there are people out there who would treat the plane like there own and there are people who wouldn't be bothered a bit about how they treat it as 'not mine' if you get what i mean.
Last edited by BRL; 23rd Jun 2002 at 19:18.
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The economics are you must fly about 80 hours a year to break even over club prices but this is only good if the aircraft is well looked after by the pilots who fly it and this is why I wont rent out my personal aircraft.
To make renting an economic proposition the aircraft has to fly at least 200 hours a year , if you can get the hours up around 300-400 then the cost per hour starts to fall fast and this is what i aim for with the aircraft i rent.
To make renting an economic proposition the aircraft has to fly at least 200 hours a year , if you can get the hours up around 300-400 then the cost per hour starts to fall fast and this is what i aim for with the aircraft i rent.
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The answer to your question is that there are people who let others fly their aircraft and in some cases it is to get the hours up and therefore help with the cost of ownership. To rent the aircraft out for hire it has to be on a public transport C of A and not on a private C of A.
I hire a very nice 4-seater from a lady who charges about the same as club rates, but it is a much nicer aircraft, and you can take it away for the weekend without paying any minimum hours (so long as she doesn't want it herself of course).
I also feel very honoured to have been added to the insurance policies of a couple of friends who own aircraft. However, I think I worry more than they do about returning the aircraft in pristine condition.
I hire a very nice 4-seater from a lady who charges about the same as club rates, but it is a much nicer aircraft, and you can take it away for the weekend without paying any minimum hours (so long as she doesn't want it herself of course).
I also feel very honoured to have been added to the insurance policies of a couple of friends who own aircraft. However, I think I worry more than they do about returning the aircraft in pristine condition.
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A & C
If you are breaking even on 80 hrs pa you are doing AMAZINGLY well, I have worked it out before and reconed 200 - 300 hrs is nearer the mark if you include things such as depreciation and engine replacement costs.
Add up your Fixed costs:- depreciation, insurance, parking, hangarage, and fixed maintainance, divide by your expected hours and you will arrive a your FIXED operating costs, for something like a PA28 I would be surprised if this was less than £5000pa, which on 80 hrs pa = about £80/hr, then add in your D.O.C.s (Direct Operating Costs) :- engine replacement costs on schedule, fuel, oil, maintainance (if you go above 50hrs) and you are getting to about £120/hr and have allowed NOTHING for any additional maintainance snags. (I can hire a pa28 for £85/hr)
You can of course reduce this if you have a freindly farmer who will lend you a field, but I still think 80 hrs would work out far to low to break even.
nb. if you are getting reasonable utilisation it is now not much more expensive to operate on public transport than on private.
If you are breaking even on 80 hrs pa you are doing AMAZINGLY well, I have worked it out before and reconed 200 - 300 hrs is nearer the mark if you include things such as depreciation and engine replacement costs.
Add up your Fixed costs:- depreciation, insurance, parking, hangarage, and fixed maintainance, divide by your expected hours and you will arrive a your FIXED operating costs, for something like a PA28 I would be surprised if this was less than £5000pa, which on 80 hrs pa = about £80/hr, then add in your D.O.C.s (Direct Operating Costs) :- engine replacement costs on schedule, fuel, oil, maintainance (if you go above 50hrs) and you are getting to about £120/hr and have allowed NOTHING for any additional maintainance snags. (I can hire a pa28 for £85/hr)
You can of course reduce this if you have a freindly farmer who will lend you a field, but I still think 80 hrs would work out far to low to break even.
nb. if you are getting reasonable utilisation it is now not much more expensive to operate on public transport than on private.
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foxmoth
The robin that i run i think breaks even because i would not be able to hire a club robin as well equiped and so would have to hire something more expencive to have a genuine airways equiped aircraft.
It is also an engineers toy so the maintenance costs are low.
Keeping control of your costs is what it is all about this is why i can rent out a Cessna 152 at £48/hr wet make money as long as the thing flys over 300 hours a year.
It is also an engineers toy so the maintenance costs are low.
Keeping control of your costs is what it is all about this is why i can rent out a Cessna 152 at £48/hr wet make money as long as the thing flys over 300 hours a year.
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A & C,
Still think you are doing amazingly well, and this could not be achieved by most people with normal engineering costs. Where do you keep your aircraft? I think this would also put costs up above your figures for many.
N.B. the Pa28- 161 I hire is also Airways equiped (not at present though as the DME is out for repair)
Still think you are doing amazingly well, and this could not be achieved by most people with normal engineering costs. Where do you keep your aircraft? I think this would also put costs up above your figures for many.
N.B. the Pa28- 161 I hire is also Airways equiped (not at present though as the DME is out for repair)
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We run a Pup 100 with a mixed group of weekend flyers and hours buliders.
We maintain her well and try to keep utilisation up.
Bottom line, £2.5K for 1/8 share, £50 pcm and £40 per hour wet - not bad value if you intend to fly many hours.
We have a share available presently, but to say anymore would be bad form. Anyone is welcome to mail if they'd like more info.
F3G
We maintain her well and try to keep utilisation up.
Bottom line, £2.5K for 1/8 share, £50 pcm and £40 per hour wet - not bad value if you intend to fly many hours.
We have a share available presently, but to say anymore would be bad form. Anyone is welcome to mail if they'd like more info.
F3G
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You can be lucky, and you can be unlucky. We run an Arrow III for six group members at £100 a month and £50 an hour, plus the engine accrual. Engine accrual is high because we only started doing it at 1600 hours.
In a good year, I don't have to ask the group members for any more money. In a bad year, it can be £2,500 a person. That was for two new pots and a new prop, which we hope won't happen again for a few years.
Average use is 200 hours a year for the total group, which makes the all-up cost with no surprises very close to £100 an hour.
Add in the "surprises" and you're at £125 an hour, which is about what you'll pay to hire an Arrow III at a club round here. But ours is a much nicer Arrow III.
Of course, if you fly another hour, it only costs you £50 (plus engine acc) because the fixed charges don't go up.
Unless someone's keeping proper books (as I do for our group) it's easy to kid yourself that your flying is a lot cheaper than it really is...
An old friend of mine at work reckoned he flew his Auster for £30 an hour - till I asked him some questions. We ended up at something like £120 an hour. He didn't fly many hours.
It's fine for those who want to kid themselves, I suppose, but misleading for folks contemplating ownership or forming a group and concerned about the real costs.
In a good year, I don't have to ask the group members for any more money. In a bad year, it can be £2,500 a person. That was for two new pots and a new prop, which we hope won't happen again for a few years.
Average use is 200 hours a year for the total group, which makes the all-up cost with no surprises very close to £100 an hour.
Add in the "surprises" and you're at £125 an hour, which is about what you'll pay to hire an Arrow III at a club round here. But ours is a much nicer Arrow III.
Of course, if you fly another hour, it only costs you £50 (plus engine acc) because the fixed charges don't go up.
Unless someone's keeping proper books (as I do for our group) it's easy to kid yourself that your flying is a lot cheaper than it really is...
An old friend of mine at work reckoned he flew his Auster for £30 an hour - till I asked him some questions. We ended up at something like £120 an hour. He didn't fly many hours.
It's fine for those who want to kid themselves, I suppose, but misleading for folks contemplating ownership or forming a group and concerned about the real costs.
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foxmoth
I keep control of my engineering costs because i do almost all of the maintenance myself on the robin and is not costed as it is my toy but the Cessna maintenance is costed at £30/hr as this is the going rate in the south ,its the high usage that keeps the costs down on this aircraft.
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Where is the Cessna based? I (and probably others reading this) may be interested in helping you keep up the utilisation at this price! - If you have room for more people flying it.
I say there boy
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I fly in a group of six with an airways equipped FM immune 180hp Grumman AA5B Tiger.
With the fixed costs factored in* I pay about £75-80ph wet (obviously depends on utilisation), compared to £129.25ph + £12pm 'membership' ** to hire one from Cabair at my home field, Biggin Hill.
Add into that the convenience of being able to take the aircraft away for long periods of time, good availability, plus the fact that the aircraft is much nicer inside and does not get bashed around by students, it makes ownership an easy choice - the best move IMHO.
There's a share available at £8,500 if anyone's interested - e-mail me for more info (sorry for the blatant plug!)
cheers!
foggy.
*(£50ph wet, £120pm fixed, based on ~50 hours per year, hourly rate includes very generous engine and maintenance fund to help smooth out any surprises)
** this does not have any associated costs of Cabair's (and other clubs') currency requirements factored in.
With the fixed costs factored in* I pay about £75-80ph wet (obviously depends on utilisation), compared to £129.25ph + £12pm 'membership' ** to hire one from Cabair at my home field, Biggin Hill.
Add into that the convenience of being able to take the aircraft away for long periods of time, good availability, plus the fact that the aircraft is much nicer inside and does not get bashed around by students, it makes ownership an easy choice - the best move IMHO.
There's a share available at £8,500 if anyone's interested - e-mail me for more info (sorry for the blatant plug!)
cheers!
foggy.
*(£50ph wet, £120pm fixed, based on ~50 hours per year, hourly rate includes very generous engine and maintenance fund to help smooth out any surprises)
** this does not have any associated costs of Cabair's (and other clubs') currency requirements factored in.
Last edited by foghorn; 3rd Jul 2002 at 09:05.
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foxmoth
I have had a telling off in the past from the moderators for posts that are to near to being adverts in the opinion of the pprune management and so as I wish to stay on the right side of the managment so I wont say more on this forum but feel free to e mail me.
Why do it if it's not fun?
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Another way of reducing the cost is to fly something a little different.
I'm always amazed at the prices of some single seaters. I've seen a few shares for sale (none recently, but then I haven't been looking at For Sale boards recently) for under a thousand pounds, with monthly fixed costs of around £10, and around £10/hour wet to fly.
If you don't want a single-seater, it's still worth looking at PFA aircraft, which are often cheaper to run due to reduced cost of being able to maintain them yourself, and better fuel economy due to more "interesting" designs. My 2-seat Europa, for example, cost me £6500 for a 1/6th share. I pay £50/month, and £15/hour dry, which works out at around £22/hour wet at 100kts cruise (10 litres of MoGas per hour) or £25/hour at 125kts (15 litres per hour). Compared to the price I was paying to rent a Super Cub before, that's a bargain!
FFF
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I'm always amazed at the prices of some single seaters. I've seen a few shares for sale (none recently, but then I haven't been looking at For Sale boards recently) for under a thousand pounds, with monthly fixed costs of around £10, and around £10/hour wet to fly.
If you don't want a single-seater, it's still worth looking at PFA aircraft, which are often cheaper to run due to reduced cost of being able to maintain them yourself, and better fuel economy due to more "interesting" designs. My 2-seat Europa, for example, cost me £6500 for a 1/6th share. I pay £50/month, and £15/hour dry, which works out at around £22/hour wet at 100kts cruise (10 litres of MoGas per hour) or £25/hour at 125kts (15 litres per hour). Compared to the price I was paying to rent a Super Cub before, that's a bargain!
FFF
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Cost is not the only issue, not many groups will let you have the aircraft for a 2 week jaunt to Spain or similar. Same applies to rented aircraft. If they will allow it minimum numbers of hours apply. A friend of mine just took his aircraft to Spain for six weeks, try that with a rental.