No "capital required" groups
Joined: May 2002
Posts: 99
Likes: 0
From: Hampshire, UK
I'd hate to be standing in front of an inland revenue inspector trying to explain that one. I'm sure they would consider your sole use of somebody elses capital asset as a taxable benefit! They've got pretty much everything else covered!!
Just picking up on one or two comments suggesting that the 'member' or 'no capital' arrangements could end up with broken equipment that the 'greedy owner' would not fix (my quotes).... this seems to me to be bracketing aircraft owners with dodgy landlords. I own an aircraft which I rent out to people. I rent it out because I need to cushion the fixed costs somehow and because it does an aircraft no good at all to be underused and I decided to buy the aircraft and 'control' it simply to avoid the politics that I have seen in a lot of groups. On my aircraft, if I want to upgrade the radios or install a new autopilot I only have my own conscience to argue with (and the cash to find of course)! The point though is that whether it be a membership scheme, a no capital group or just plain rental, the amount coming in is unlikely to provide a 'profit' and the owner can probably at best hope to break even (and to do that is paying the going rate him/herself for flying hours). There is no great incentive there for an owner to keep an aircraft in a substandard condition. I suspect that in the majority of cases the aircraft is the owners pride and joy and will be treated as such. This is certainly true in my case and to be honest I think the people who rent it from me are getting a good deal. I don't resent them that of course - it is a two way deal in that those people are allowing me to own the aircraft in the first place.
Having operated the 'rental' model for a couple of years I am currently giving great thought to the 'membership' model for two simple reasons.
1. To attempt to get people to commit a little more to the aircraft so I can better plan the payment of bills. It is very easy to get completely caught out by a long spell of bad weather coinciding with a large bill!
2. To engender more of a group feel. I have a fairly small group of people who rent my aircraft on a regular basis. This has worked well up to this year but recently I have started to see people making all manner of 'precautionary' bookings and then simply not turning up once they have flown the amount they wanted. A 'membership' scheme with some sort of democracy may help to get people to cooperate over the bookings rather than compete for them. Similarly, occasionally I see somebody book the aircraft for a week and I find out later that it has been parked up 45 minutes flying time away for the whole week. This is not really fair on me and it is also not fair on the other 'renters'. Hopefully a membership scheme might provide the required social pressure to stop this sort of thing. Who knows??
The difficulty I see in implementing this scheme is to work out how to pitch it in terms of 'membership fees' versus 'flying charges'. I have a range of people who rent it, some of whom might fly only 5 or 6 hours a year up to people who fly 40-50 hours a year. One intrepid sole has done 40 hours this year already (mostly on a single trip!). Any ideas on that one would be most welcome!!
Graham
PS. When I said I only have my own conscience to argue with.... I think I probably meant that I only have my better half to argue with!
Just picking up on one or two comments suggesting that the 'member' or 'no capital' arrangements could end up with broken equipment that the 'greedy owner' would not fix (my quotes).... this seems to me to be bracketing aircraft owners with dodgy landlords. I own an aircraft which I rent out to people. I rent it out because I need to cushion the fixed costs somehow and because it does an aircraft no good at all to be underused and I decided to buy the aircraft and 'control' it simply to avoid the politics that I have seen in a lot of groups. On my aircraft, if I want to upgrade the radios or install a new autopilot I only have my own conscience to argue with (and the cash to find of course)! The point though is that whether it be a membership scheme, a no capital group or just plain rental, the amount coming in is unlikely to provide a 'profit' and the owner can probably at best hope to break even (and to do that is paying the going rate him/herself for flying hours). There is no great incentive there for an owner to keep an aircraft in a substandard condition. I suspect that in the majority of cases the aircraft is the owners pride and joy and will be treated as such. This is certainly true in my case and to be honest I think the people who rent it from me are getting a good deal. I don't resent them that of course - it is a two way deal in that those people are allowing me to own the aircraft in the first place.
Having operated the 'rental' model for a couple of years I am currently giving great thought to the 'membership' model for two simple reasons.
1. To attempt to get people to commit a little more to the aircraft so I can better plan the payment of bills. It is very easy to get completely caught out by a long spell of bad weather coinciding with a large bill!
2. To engender more of a group feel. I have a fairly small group of people who rent my aircraft on a regular basis. This has worked well up to this year but recently I have started to see people making all manner of 'precautionary' bookings and then simply not turning up once they have flown the amount they wanted. A 'membership' scheme with some sort of democracy may help to get people to cooperate over the bookings rather than compete for them. Similarly, occasionally I see somebody book the aircraft for a week and I find out later that it has been parked up 45 minutes flying time away for the whole week. This is not really fair on me and it is also not fair on the other 'renters'. Hopefully a membership scheme might provide the required social pressure to stop this sort of thing. Who knows??
The difficulty I see in implementing this scheme is to work out how to pitch it in terms of 'membership fees' versus 'flying charges'. I have a range of people who rent it, some of whom might fly only 5 or 6 hours a year up to people who fly 40-50 hours a year. One intrepid sole has done 40 hours this year already (mostly on a single trip!). Any ideas on that one would be most welcome!!
Graham
PS. When I said I only have my own conscience to argue with.... I think I probably meant that I only have my better half to argue with!
