Advice on buying a B206 and leaseback schemes
Grandpa Aerotart
Kopterman ask yourself why many charter companies lease aircraft from people such as yourself instead of buying them or leasing them from a leasing company.
Don't get me wrong these arrangements can work...but it is VASTLY more likely to be the case that you're subsidising the AOC holder than the other way around.
In owning an aircraft you have;
1/. Fixed costs. (hangarage/insurance/capital costs [bank repayments]/GPS database updates and components that require overhaul/replacement based on date, etc) They are called fixed because they don't vary whether the aircraft flies or not.
2/. Direct Operating Costs. Which are exactly that...fuel/oil and components that require overhaul/replacement based on time in service.
Annual utilisation is the biggest factor in what a machine actually costs/hr to run overall...DOCs are the smaller component on low utilisation and the larger number on high utilisation.
As just one example of where you can be bitten by cost blow outs have a think about the turbine engine. They might have 3000 hrs TBO...but they also have a date limitation of 10 yrs. The next pilot who buys a turbine engined aircraft with '1000' hrs left to run until TBO who then finds 3 or 12 mths/200hrs later he has a 100k bill looming for a hot section inspection won't be the first.
Often a charter company will own or lease (from a commercial leasing company) a few of their machines and the remainder are leasebacks from private individuals. Your machine will fly only when their machines are already busy elsewhere. When their machines don't fly they have fixed costs to cover...when your machine doesn't fly the fixed costs are your problem not theirs.
One way to attack the problem would be a lease contract based on a fixed amount/mth which covers an agreed % of your fixed costs + an hourly rate covering DOCs. This ensures they are motivated to use your aircraft as the more often it flies the cheaper it is for THEM to operate/hr (which is the case with their own machines) and you are protected to some extent.
Your exposure under this arrangment would be limited to maintenance issues...things like an annual/100hrly inspection that blows out from the 5k you budget to 7,8,9 or 10k because of various unforeseen issues like a damaged main or tail rotor blade, components worn beyond limits, corrosion control, fried radio, AD compliance, etc....this is VERY common.
The problem with such an arrangment is the AOC holder will quite rightly suggest that any use of the aircraft by you limits their ability to use it and as such they will not enter into such an agreement...similarly with a 'guaranteed mthly hrs' arrangement...they just won't be interested because it would mean they risk leaving one of their aircraft on the ground to use yours.
Of course if you can find a company that will enter into such a contract and still let you fly your machine go for it.
I would be prepared to bet folding money you will NOT find such a charter company.
Don't get me wrong these arrangements can work...but it is VASTLY more likely to be the case that you're subsidising the AOC holder than the other way around.
In owning an aircraft you have;
1/. Fixed costs. (hangarage/insurance/capital costs [bank repayments]/GPS database updates and components that require overhaul/replacement based on date, etc) They are called fixed because they don't vary whether the aircraft flies or not.
2/. Direct Operating Costs. Which are exactly that...fuel/oil and components that require overhaul/replacement based on time in service.
Annual utilisation is the biggest factor in what a machine actually costs/hr to run overall...DOCs are the smaller component on low utilisation and the larger number on high utilisation.
As just one example of where you can be bitten by cost blow outs have a think about the turbine engine. They might have 3000 hrs TBO...but they also have a date limitation of 10 yrs. The next pilot who buys a turbine engined aircraft with '1000' hrs left to run until TBO who then finds 3 or 12 mths/200hrs later he has a 100k bill looming for a hot section inspection won't be the first.
Often a charter company will own or lease (from a commercial leasing company) a few of their machines and the remainder are leasebacks from private individuals. Your machine will fly only when their machines are already busy elsewhere. When their machines don't fly they have fixed costs to cover...when your machine doesn't fly the fixed costs are your problem not theirs.
One way to attack the problem would be a lease contract based on a fixed amount/mth which covers an agreed % of your fixed costs + an hourly rate covering DOCs. This ensures they are motivated to use your aircraft as the more often it flies the cheaper it is for THEM to operate/hr (which is the case with their own machines) and you are protected to some extent.
Your exposure under this arrangment would be limited to maintenance issues...things like an annual/100hrly inspection that blows out from the 5k you budget to 7,8,9 or 10k because of various unforeseen issues like a damaged main or tail rotor blade, components worn beyond limits, corrosion control, fried radio, AD compliance, etc....this is VERY common.
The problem with such an arrangment is the AOC holder will quite rightly suggest that any use of the aircraft by you limits their ability to use it and as such they will not enter into such an agreement...similarly with a 'guaranteed mthly hrs' arrangement...they just won't be interested because it would mean they risk leaving one of their aircraft on the ground to use yours.
Of course if you can find a company that will enter into such a contract and still let you fly your machine go for it.
I would be prepared to bet folding money you will NOT find such a charter company.
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Pandalet - the cost of an AOC would be around 20K, including the application fee and paying someone like me for the ops manual and other documentation, plus training for pilots, etc. and sundries like printing.
However, it does take some time and it can be restrictive. Under JAR OPs rules you can do a lot before you need one.
The cost of actually running a company, however - now that's quite different!
Phil
However, it does take some time and it can be restrictive. Under JAR OPs rules you can do a lot before you need one.
The cost of actually running a company, however - now that's quite different!
Phil
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Pandalet:
Aerial work is (from JAR OPS in Plain English)
Where an aircraft is used for specialised services such as agriculture, construction, photography, surveying, observation and patrol, search and rescue, aerial advertising, etc. In other words, not carrying passengers in the normal fare-paying sense, although "essential persons" may be carried, actually up to 6 indispensible people, excluding crew.
"etc" is actually in the JAR OPS definition, so I would suggest that anything you do that is not simply taking passengers from A to B is fair game for not requiring an AOC.
Phil
Aerial work is (from JAR OPS in Plain English)
Where an aircraft is used for specialised services such as agriculture, construction, photography, surveying, observation and patrol, search and rescue, aerial advertising, etc. In other words, not carrying passengers in the normal fare-paying sense, although "essential persons" may be carried, actually up to 6 indispensible people, excluding crew.
"etc" is actually in the JAR OPS definition, so I would suggest that anything you do that is not simply taking passengers from A to B is fair game for not requiring an AOC.
Phil
Why bother with all the B*****ks from the campaign against aviation (CAA)
it will only turn you into a dribbling idiot with all the rules written by suits who have no idea of the real world........oh my god !!!....the CAA are even getting to me ...i havent had my checkride on my computor this month and still have to do my fire drill in case it goes up in smoke....and oh NO ...i havent notified the authorities that i moved the plug to an area of the room that has not been inspected by a CAA inspector yet because he was here checking that the cable was the specified colour. Sadly i have to get off my computor now because the CAA has decided my seat is not the correct hight for the type of work i am doing and in any event as this is PUBLIC typing , and not private, i cannot use this computor as it is not wide enough...or is it too wide...anyway i am now going to do my new rating which covers me for ALL computors , unless they are black , in which case it has to be a different CAA examiner who can do that checkride. I would go to bed now but sadly the distance between my chair and the door is no longer legal , i now need a safe distance so that if i dont have the power to make it up ....i can settle back safely into the seat i lifted from.....keep your flights private and lease.
it will only turn you into a dribbling idiot with all the rules written by suits who have no idea of the real world........oh my god !!!....the CAA are even getting to me ...i havent had my checkride on my computor this month and still have to do my fire drill in case it goes up in smoke....and oh NO ...i havent notified the authorities that i moved the plug to an area of the room that has not been inspected by a CAA inspector yet because he was here checking that the cable was the specified colour. Sadly i have to get off my computor now because the CAA has decided my seat is not the correct hight for the type of work i am doing and in any event as this is PUBLIC typing , and not private, i cannot use this computor as it is not wide enough...or is it too wide...anyway i am now going to do my new rating which covers me for ALL computors , unless they are black , in which case it has to be a different CAA examiner who can do that checkride. I would go to bed now but sadly the distance between my chair and the door is no longer legal , i now need a safe distance so that if i dont have the power to make it up ....i can settle back safely into the seat i lifted from.....keep your flights private and lease.
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206 and building hours
Makes sense to try and get to the bottom of this before making a decision; you're right about there being no correlation between money and happiness.
Have you considered going to the military to fly? It would certainly be cheaper than paying for it yourself and you will gain experience that no amount of hours' building commercially or otherwise could replicate; the only problem you will have if you can take this route is the fact that you will eventually have to revert to the rediculously over regulated environment that we all know as commercial aviation in this country.
Good luck whatever you decide.
Have you considered going to the military to fly? It would certainly be cheaper than paying for it yourself and you will gain experience that no amount of hours' building commercially or otherwise could replicate; the only problem you will have if you can take this route is the fact that you will eventually have to revert to the rediculously over regulated environment that we all know as commercial aviation in this country.
Good luck whatever you decide.
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Forget lots of the negatives you read here. Some of it's from folks who will NEVER own a helicopter nor much of anything else, for that matter.
Talk to aircraft owners/aircraft companies and find out their opinions.
I own apartments, townhomes, commercial and other various real estate ventures and if I had listened to every "expert" who had never owned so much as one building then I'd still be poor. They always say it won't work!
(I didn't listen to them, thank God, and I ain't poor now)
Go talk to folks who are already doing what you seek to do. I own my own heli and wouldn't ever consider going back to leasing.
Again, every situation is different and I am not saying there aren't good opinions here, just talk to the folks who OWN and are doing what you seek to do. Their advice would be golden.
Best of luck to you and kudos for your spirit!!
PS
To everyone else here, I believe this fellow started this thread seeking advice on what type of Bell to purchace. Not business 101.
Talk to aircraft owners/aircraft companies and find out their opinions.
I own apartments, townhomes, commercial and other various real estate ventures and if I had listened to every "expert" who had never owned so much as one building then I'd still be poor. They always say it won't work!
(I didn't listen to them, thank God, and I ain't poor now)
Go talk to folks who are already doing what you seek to do. I own my own heli and wouldn't ever consider going back to leasing.
Again, every situation is different and I am not saying there aren't good opinions here, just talk to the folks who OWN and are doing what you seek to do. Their advice would be golden.
Best of luck to you and kudos for your spirit!!
PS
To everyone else here, I believe this fellow started this thread seeking advice on what type of Bell to purchace. Not business 101.
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Forget lots of the negatives you read here. Some of it's from folks who will NEVER own a helicopter nor much of anything else, for that matter.
Talk to aircraft owners/aircraft companies and find out their opinions.
I own apartments, townhomes, commercial and other various real estate ventures and if I had listened to every "expert" who had never owned so much as one building then I'd still be poor. They always say it won't work!
(I didn't listen to them, thank God, and I ain't poor now)
Go talk to folks who are already doing what you seek to do. I own my own heli and wouldn't ever consider going back to leasing.
Again, every situation is different and I am not saying there aren't good opinions here, just talk to the folks who OWN and are doing what you seek to do. Their advice would be golden.
Best of luck to you and kudos for your spirit!!
PS
To everyone else here, I believe this fellow started this thread seeking advice on what type of Bell to purchace. Not business 101.
Talk to aircraft owners/aircraft companies and find out their opinions.
I own apartments, townhomes, commercial and other various real estate ventures and if I had listened to every "expert" who had never owned so much as one building then I'd still be poor. They always say it won't work!
(I didn't listen to them, thank God, and I ain't poor now)
Go talk to folks who are already doing what you seek to do. I own my own heli and wouldn't ever consider going back to leasing.
Again, every situation is different and I am not saying there aren't good opinions here, just talk to the folks who OWN and are doing what you seek to do. Their advice would be golden.
Best of luck to you and kudos for your spirit!!
PS
To everyone else here, I believe this fellow started this thread seeking advice on what type of Bell to purchace. Not business 101.
KM
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agree with Kopterman
I own my own heli and have never looked back!! Go for it, and forget the idiots (most of which don't even own a copy of a computer Flight Sim let alone seen real life rotor blades)
Looking out of the window in the morning and knowing that if you want to you can fly, rather than hoping a machine is available is priceless!!!
Also, knowing the machine's history, serviceability and that some bloody idiot hasn't flown it before you is also priceless...
if you can make the sums work without breaking you, DO IT!!! You will never look back!
I own my own heli and have never looked back!! Go for it, and forget the idiots (most of which don't even own a copy of a computer Flight Sim let alone seen real life rotor blades)
Looking out of the window in the morning and knowing that if you want to you can fly, rather than hoping a machine is available is priceless!!!
Also, knowing the machine's history, serviceability and that some bloody idiot hasn't flown it before you is also priceless...
if you can make the sums work without breaking you, DO IT!!! You will never look back!
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"I'm also hoping to finish my hr building (approx 40hrs) until I do my CPL(H) course and then hopefully do some paid work as the owner, under the AOC of a Company/School, if this is realistic?"
"All help and advice appreciated, including recommendations for websites, contacts, books or software etc."
Seems to me he did ask for Business 101, especially when he plans to do it with only 200K. Cashflow is King in this business, well, from this idiot's perspective anyway.
Phil
"All help and advice appreciated, including recommendations for websites, contacts, books or software etc."
Seems to me he did ask for Business 101, especially when he plans to do it with only 200K. Cashflow is King in this business, well, from this idiot's perspective anyway.
Phil
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"I'm also hoping to finish my hr building (approx 40hrs) until I do my CPL(H) course and then hopefully do some paid work as the owner, under the AOC of a Company/School, if this is realistic?"
"All help and advice appreciated, including recommendations for websites, contacts, books or software etc."
Seems to me he did ask for Business 101, especially when he plans to do it with only 200K. Cashflow is King in this business, well, from this idiot's perspective anyway.
Phil
"All help and advice appreciated, including recommendations for websites, contacts, books or software etc."
Seems to me he did ask for Business 101, especially when he plans to do it with only 200K. Cashflow is King in this business, well, from this idiot's perspective anyway.
Phil
I think everyone knows that 'Cashflow' is critical to ANY business!
KM
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OK, then we seem to be at cross purposes! You would have to set up a formal business of some sort, though, because you would want it owned by a separate entity than the one operating it, for liability purposes. You would be very silly to own it personally. My comments (about cashflow, etc) were more towards other posters who seem to equate helicopters with property, because even for leaseback, 200K is not nearly enough. Well, not for a good jetbox, at least. I wouldn't want you to start on your project and fall flat on your face! Good luck whatever you do.
Phil
Phil
In rotorspins case i think maybe an idiot was just flying it !!!
I have owned lots of helicopters and they have all caused me grief....lots of fun too....but at a hefty price. The difference is that even tho it hurt , i could easily afford it. The owners who are advising you are not trying to keep you out of ownership ..just out of trouble !!!! The last big bill i had was $300,000 for NON scheduled work ....closely followes by another $100,000 on an AS 350. Believe me you could get bitten .
As for a business, yes of course it has to be owned by a business which will cost you even more on accounts etc Only RICH idiots own helicopters (i do not include Robinsons as they are not really helicopters)
I have owned lots of helicopters and they have all caused me grief....lots of fun too....but at a hefty price. The difference is that even tho it hurt , i could easily afford it. The owners who are advising you are not trying to keep you out of ownership ..just out of trouble !!!! The last big bill i had was $300,000 for NON scheduled work ....closely followes by another $100,000 on an AS 350. Believe me you could get bitten .
As for a business, yes of course it has to be owned by a business which will cost you even more on accounts etc Only RICH idiots own helicopters (i do not include Robinsons as they are not really helicopters)
