PA-28-161 dry lease rate: am I being fleeced?
 

Dear Forumites,

I have recently made some inquiries about dry-leasing a Piper Warrior II (to be based south-east UK) and got a few quotes back, all in the £65-80 range, all on the "maintained and insured" basis, except for one. A couple of years ago that rate would lease you an Arrow. Am I being fleeced or have I spent too many years hiding in my garden shed?


/h88

If that is for an engine within training organisation calendar and hours, I'd say it's a bargain!. Can you please say what minimum hours a month you've contracted for at that rate?

TOO

by insured and maintained, do you mean the supplier, pays for the insurance and all costs of 50hr checks, 150 hour checks, annual, ARC etc?maintained to public transport standards

Yes, they mean that (apart from public transport standards which are not applicable anymore).

I proposed 300, the quotes stipulated between 300-600.

An overall conclusion from your replies, at least those which addressed the question I asked, seems to be that I'm not being fleeced. Goodness me, the market really seems to be on the side of those who do own flying assets at the moment!

I believe that any aircraft on an EASA ARC cannot be rented with an engine running on condition. 12 years or TBO hours + any extensions even on a non equity basis. Therefore one must be a minimum part owner to fly 'on condition' aircraft, if paying any money at all.
PtF aircraft can be rented, but must be approved to do so.
Without pedantry, is this just about correct?

Yes, that just about sums it up.

Case study. We have a PA28, running on TBO + extension and calendar +extension, both of which expire this autumn. The airframe has also some distress about it, according to the survey we had done it has had 3 coats of paint more or less applied over the dirt. So, this autumn, we're having a paint-off respray and an engine rebuild, total budget £40k+.
. We charge £140 + VAT (£168inc) per hour chock-to-chock. This rate hasn't gone up in the past 5 years.
We've had the aircraft for 3 1/2 years. During this time, we've saved enough money for the respray and the engine overhaul, plus enough for the 8.33 radio and a new transponder. We've also recovered the seats and replaced the carpets. We pay for hangarage. We do about 400 revenue hours a year. We've a mix of young students and more mature members who hire the aircraft.
So, how have we managed this? By being a not-for-profit flying club, where people are volunteers and help each other.

TOO

In aviation we are vastly underselling ourselves if you want to turn a profit at a flying club. Our rental charges have barely changed this last ten years, yet prior to that charges doubled every ten years. We are all going bust slowly.

Local garages charge c£50 + VAT per hour. i.e. £60. They can work Mon-Fri and open at 8am and close at 5pm. Every week.

We, on the other hand, charge £150 for an hour in the air, booked as two hours in the diary, so effectively £75 an hour. But we only fly when the weather is suitable. We are open seven days a week.

Both a garage and us have significant overheads: be it premises or machinery.

But the garages charge by "book" hours for the jobs, so can fit more billable hours into a day than the eight hours they have in the diary.

(They also are not training many people who then go on to earn significantly more than their instructors!)

My contention: flight training needs to double its charges to have surplus cash to re-invest. Note, not to make a greater profit. Otherwise the whole aviation pack of cards will come crashing down.

I think in that case the whole pack will come crashing down in any case. How many student pilots would continue if rates increased by 100%? Or even 25%?

In 1980 as a 20 year old i was taking home £25 a week from work. Flight training was £23/hour.
Minimum wage now for 20 year old is 40 x £6.15/hr = £246 week, assume no tax paid.
So hourly rate should be around £225 hour, here in the Midlands.
We charge at the moment £185 for a Warrior.
Club does about 500 hour a year across two aircraft.
My partner secretary takes virtually nothing in wage and i take £700 a month as the CFI/examiner.
As you can see we do it almost for the love of flying.
Or am i just a mug?

I was thinking of splitting the club into two businesses to get below the vat threshold.
One would be hire and the other training.

£23 an hour sounds remarkably cheap for 1980, but in any case prices generally rise more slowly than wages. Going by the RPI £23 in 1980 is equivalent to about £100 now. Compared with average earnings £25 a week then is equivalent to around £150 a week now.

Interesting. Just for the sake of giving some international perspective - I think it was '84 when I started and the rate was (converted to GBP) approx £22.50 per hour for a Tomahawk or Tiger. I was earning £120/week (before tax), including a half-day on Saturdays.

Today you could hire a Tomahawk for ~£100/hr and I guess a reasonable wage here for a similar job could be £400/week (before tax), or possibly more, so relatively speaking not a great deal of change.

However it does appear that - without considering a great number of other variables - our flying is significantly cheaper per hour worked than yours in the UK.

FP.

Yes i forgot about working half day Saturday in the 80's. Always felt strange knocking off work at 12:00 rather than leaving at contracted time 16:30 (but leaving at 17:30, i was a mug back then).

We lease aircraft from a third party. To be honest we could have probably bought those aircraft twice over, if we owned them.

Just looked in my first log book, i have the old price list from when i started in 1978, £22.68p one hour Cherokee 140. That was the Midland Aviation Centre, Halfpenny Green.
So probably about £25 by 1980.

This is always a conundrum.

When I first started in 1982 we leased a Rallye from ATS at Biggin Hill - they gave us free hours when we did any above 400 p.a. The plus here was that we got another aircraft when the main one was on Annual. Then we were offered the aircraft to buy. This was great until the main spar rotted - common problem with Rallyes. This cost us to repair and off-load. We then bought a PA28. Again, costs sometimes threatened to overwhelm us.
Then I went to work for a big chain of flying schools in the London area. They had a mix of aircraft they leased back from owners and aircraft from a partner leasing company. They went bust big-time in 2008.
Now, at my present location, we leased aircraft up until 3 years ago. The plus here is a guaranteed fixed cost. The downside was that the only maintenance done was to keep the aircraft airworthy - cosmetically not brilliant, especially inside. Then we had an opportunity to acquire a PA28 at a very good deal. We've been lucky I'd say with this aircraft in that we haven't had any major problems and have been able to save up for a complete refurbishment, whist charging the same price we were for the previous aircraft out of which we made no money.
There are no rights and wrongs with this. The old adage about 'if it flies or floats it's cheaper to rent' ~(leaving out the rude bit!) isn't always true. Careful management and a small dose of luck help.

TOO

Well, yeah, per year of course :O it was late time of the day...