Advice about how to structure an R44 group
Thread Starter
Joined: Apr 2006
Posts: 714
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From: uk
Advice about how to structure an R44 group
A quick search did not reveal the answers so advice please.
A friend has owned an R44 Raven 2 from new and in about 4 years has done around 300 hours, he is considering selling it or preferably having an agreement with 3 - 4 other friends to in effect sell block hours to better utilise the helicopter and reduce his overall operating cost and therfore keeping availability for himself. There would not be a capital or share purchase.
It is G reg and he paid the VAT when purchasing it.
As I am one of the interested friends we have a few questions
a) Does any one have a proven agreement for a private owner to sell blocks of hours to be used over a period of say a year.
b) Would it change the maintenance requirement to Public Transport
c) What would be a fair price for pre paid blocks of 25 or 50 hours
Thanks
Duncan
A friend has owned an R44 Raven 2 from new and in about 4 years has done around 300 hours, he is considering selling it or preferably having an agreement with 3 - 4 other friends to in effect sell block hours to better utilise the helicopter and reduce his overall operating cost and therfore keeping availability for himself. There would not be a capital or share purchase.
It is G reg and he paid the VAT when purchasing it.
As I am one of the interested friends we have a few questions
a) Does any one have a proven agreement for a private owner to sell blocks of hours to be used over a period of say a year.
b) Would it change the maintenance requirement to Public Transport
c) What would be a fair price for pre paid blocks of 25 or 50 hours
Thanks
Duncan
Joined: Feb 2008
Posts: 61
Likes: 0
From: midlands
Syndicate
I cant see any reason why the owners friends cannot buy a small share - and I believe that there are CAA guidelines on the minimum capital share allowable(5%??) - and operate it from the owners home.
This would be an identical arrangement to the more common farm strip fixed wing syndicate, ie the owner of the farm strip/ member of the syndicate is entitled to charge the other members hangarage.
Selling block hours immediately renders it a Hire and Reward arrangement, with all the insurance, HMRC and PT CofA implications.
If in the same position I would continue to operate it from home but sell shares in it. If the owner bases it at an airfield, a major benefit of the heli v fixed wing is lost, something the major shareholder wouldn't want?
Putting my business head on, a share in a total flying operation, ie an insured, hangared aircraft, is worth more than the percentage value of the airframe. So, if the interest really is there from other locally based heli pilots, the owner might just be able to sell, say, three x one-quarter shares for the current hull value and have a free or cheaper one himself, whilst continue to enjoy the benefits of a machine at home.
I would caution against a cash in the hand deal because the insurers will very likely find out in the event of a claim and won't pay out.
Putting my jealous head on I cannot imagine letting anybody else fly my machine. Unlike a fixed wing, it is possible to cause some very expensive damage on start-up/ overspeeds etc.
Nobody looks after an aircraft better than the person who paid all the money for it. Sell 5% of it to somebody and they will very likely only acquire a commensurate level of 'ownership'.
Keep us posted.
JB
This would be an identical arrangement to the more common farm strip fixed wing syndicate, ie the owner of the farm strip/ member of the syndicate is entitled to charge the other members hangarage.
Selling block hours immediately renders it a Hire and Reward arrangement, with all the insurance, HMRC and PT CofA implications.
If in the same position I would continue to operate it from home but sell shares in it. If the owner bases it at an airfield, a major benefit of the heli v fixed wing is lost, something the major shareholder wouldn't want?
Putting my business head on, a share in a total flying operation, ie an insured, hangared aircraft, is worth more than the percentage value of the airframe. So, if the interest really is there from other locally based heli pilots, the owner might just be able to sell, say, three x one-quarter shares for the current hull value and have a free or cheaper one himself, whilst continue to enjoy the benefits of a machine at home.
I would caution against a cash in the hand deal because the insurers will very likely find out in the event of a claim and won't pay out.
Putting my jealous head on I cannot imagine letting anybody else fly my machine. Unlike a fixed wing, it is possible to cause some very expensive damage on start-up/ overspeeds etc.
Nobody looks after an aircraft better than the person who paid all the money for it. Sell 5% of it to somebody and they will very likely only acquire a commensurate level of 'ownership'.
Keep us posted.
JB
