UK R44 Lease back rate
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UK R44 Lease back rate
Hi People,
I just got my PPL(H) and i'm about to acquire a new R44. I have had discussions with schools offering to Lease it back for charter/training when the aircraft is free, but was just wandering what a common rate is for lease back in the UK. I'm sure it varies somewhat depending on aircraft age & type of use, and between schools, but any info would be appreciated to get an idea of whether they are offering a reasonable rate.
Thanks all
I just got my PPL(H) and i'm about to acquire a new R44. I have had discussions with schools offering to Lease it back for charter/training when the aircraft is free, but was just wandering what a common rate is for lease back in the UK. I'm sure it varies somewhat depending on aircraft age & type of use, and between schools, but any info would be appreciated to get an idea of whether they are offering a reasonable rate.
Thanks all
I reckon between £200 and £220 plus VAT. There are a number of R44's reaching the end of their calender life with lots of hours left to use so perhaps nearer the £200 mark. Just my thoughts!
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Cant comment on prices but have read many posts about such clubs ruining peoples aircraft, be aware of the downside and pitfalls of allowing training on your machine by a club?
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Thanks for the input,
If i'm to lease the aircraft back I would probably stipulate that the use would be for commercial work, or SFH with over 20-30hrs P1 on type (rules me out
), or something to that effect, whereby there would be no reason for performing autos & hydraulics off practice, hopefully minimising the potential hazards to the A/C but I appreciate I would never have the same peace of mind as keeping it at home.
Maybe i'll keep it solely as my toy, reduce insurance rate too I should imagine. Out of interest I believe club insurance rate is approx £18K could anyone give me an idea what it is privately, and whether anyone other than Haywards is worth a look?
Thanks
If i'm to lease the aircraft back I would probably stipulate that the use would be for commercial work, or SFH with over 20-30hrs P1 on type (rules me out
), or something to that effect, whereby there would be no reason for performing autos & hydraulics off practice, hopefully minimising the potential hazards to the A/C but I appreciate I would never have the same peace of mind as keeping it at home.Maybe i'll keep it solely as my toy, reduce insurance rate too I should imagine. Out of interest I believe club insurance rate is approx £18K could anyone give me an idea what it is privately, and whether anyone other than Haywards is worth a look?
Thanks
If i'm to lease the aircraft back I would probably stipulate that the use would be for commercial work, or SFH with over 20-30hrs P1 on type (rules me out ), or something to that effect, whereby there would be no reason for performing autos & hydraulics off practice, hopefully minimising the potential hazards to the A/C but I appreciate I would never have the same peace of mind as keeping it at home
So you'll find yourself in the 'is it worth it' camp very quickly. After all, you own a helicopter to get places quickly, not to drive to an airport, fanny about there as they have forgotten you're coming to collect it and left it with no fuel....all the time paying through the nose for insurance.
Either bend over, take one for the team and tell them to put lots of hours on at as good a rate as you can get (all the while hoping those students don't overpitch it and wreck the spindle bearings...again); or keep it in your barn, enjoy the lower insurance and worry about the fact you're not flying 200 hours a year and 12 years doesn't seem so far away now, does it....
Whatever you do, make sure you do the calculation on how many hours of use the school will have to use it for to pay for the uplift on insurance. That's money straight out of your account.
Welcome to the world of pain that is helicopter ownership.
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dont do it
keep it for yourself, park it in your garden and know its costing you money to have it sat there ! its better than getting the call to tell you its going to cost £x for something you didnt do ! at least if you break it - you wont feel AS bad !
the schools WILL just want to hand the broken aircraft back to you - because its yours - and thats how they make their money now days -
i looked into this a few years back - when i bought my first aircraft, no matter how you do your sums - you will end up losing out !!!
the schools WILL just want to hand the broken aircraft back to you - because its yours - and thats how they make their money now days -
i looked into this a few years back - when i bought my first aircraft, no matter how you do your sums - you will end up losing out !!!
Unless it is your school dont bother. If you have to, let them insure and maintain it, bet you get a different reaction !!
Having owned more than 20 helicopters over the years ( never a Robinson product though) if you cant afford it without leaseback then you cant afford to run one.
Having owned more than 20 helicopters over the years ( never a Robinson product though) if you cant afford it without leaseback then you cant afford to run one.
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dont do it
The recession is hurting the aviation industry badly, it doesn't seem to me a smart idea to hand over my expensive asset to a company which is being squeezed financially. Even if they want to be nice to me, their ability to do so is pretty limited.
Ended up selling mine, and the new one's exactly where it should be, in the barn in my garden. Shame about the bank balance though...
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Dont Do It...... UNLESS:
Unusually for me,
I agree with the majority of posters so far.
Until the balance changes in favour of the owner of the helicopter, it's a surefire way to lose money and be taken for a rather unpleasant ride.
It's not just on the maintenance and insurance that you'll pay through the nose, it's also the depreciation that you'll suffer due to the sweaty wornout grips, the torn seats and velour, the sloppy controls, and the scratched paintwork. And of course the hours used will be a major factor.
So when you come to sell your machine, what it has been used for and how it looks will make a significant difference to the price you achieve.
There will be overspeeds, there will be heavy landings -- it's the nature of students learning to fly, so be aware of this. And what often happens is that these issues only come to light at the next annual - and guess who picks up the tab? The Owner.
Unless you, as the owner, are actually learning to fly, then at the moment it's a Bad Plan to lease your helicopter to a school. But whilst learning to fly you'll be obliged to keep your aircraft at the airfield, you'll need training insurance, you'll have an instructor and therefore you've already got a lot of the fixed costs, so leasing it back for (say) 200 hours for one year might well help you while you get your licence. But read on.........
It's not only the abuse of the machine you need to consider, it's also whether you get paid or not. I'm not kidding - a lot of schools are tight for cash and cash flow, and owners of helicopters often get put to the bottom of the queue.
For a long while the rates for lease-back in the UK have been way too low. Compare them to the rest of Europe: in Italy, Germany or Switzerland you'll be paying a LOT more than £200.00 per hour to dry lease a R44.
SO, if you are intent on leasing back a R44 I'd recommend the following safeguards put in place - to protect the owner of the asset.
1. Agree an hourly rate of no less than £250 per hour, dry. Do not get involved in a fuel-inclusive rate.
2. Agree a minimum monthly usage of 20 hours per month.
3. Agree a set term of 3 years, with an either-way opt-out clause at the end of each 12 month term.
4. Take a deposit of 1 month's usage.
5. Agree payment term of: (i) 20 hours paid monthly in advance (ii) any hours in excess of 20 hours flown to be paid within 7 days of month end. Preferred method of payment is direct debit, with a standing order and electronic transfer being next best.
6. Agree that the school pays the premiums for insurance over and above private usage.
7. Agree that the school pays for ALL unscheduled maintenance over and above the set fees for the 50/100/300/annual services.
8/ Do not pay for hangarage.
9/ Choose whether you get paid for Datcon or flight time. Either way it should be what the student gets charged for.
For R22 lease-back, reduce the hourly rate to £125 and increase the number of hours to 30 per month.
If your chosen school happens to have its own maintenance facility, ALWAYS have it maintained elsewhere. You would not believe the conflicts of interest a school with maintenance factilities has when looking after 3rd party machines that the school use for training.
I appreciate that this post may not be very popular with school owners, but I know a thing or two about leasing back aircraft -- I've done it in the past and unless it were on similar terms to what I've laid out above, I wouldn't do it again.
I'm also completely aware that the inevitable consequence of implementing the above will be to (a) raise the cost of training and/or (b) reduce the number of schools and/or (c) increase the number of schools that operate their own aircraft.
In the UK, this is long overdue. Ask some of the school owners that are still around what it was like 15 or 20 years ago -- there was money in teaching people to fly then, but it's jolly hard these days.
If you want any more information, then please feel free to PM me.
Big Ls.
I agree with the majority of posters so far.
Until the balance changes in favour of the owner of the helicopter, it's a surefire way to lose money and be taken for a rather unpleasant ride.
It's not just on the maintenance and insurance that you'll pay through the nose, it's also the depreciation that you'll suffer due to the sweaty wornout grips, the torn seats and velour, the sloppy controls, and the scratched paintwork. And of course the hours used will be a major factor.
So when you come to sell your machine, what it has been used for and how it looks will make a significant difference to the price you achieve.
There will be overspeeds, there will be heavy landings -- it's the nature of students learning to fly, so be aware of this. And what often happens is that these issues only come to light at the next annual - and guess who picks up the tab? The Owner.
Unless you, as the owner, are actually learning to fly, then at the moment it's a Bad Plan to lease your helicopter to a school. But whilst learning to fly you'll be obliged to keep your aircraft at the airfield, you'll need training insurance, you'll have an instructor and therefore you've already got a lot of the fixed costs, so leasing it back for (say) 200 hours for one year might well help you while you get your licence. But read on.........
It's not only the abuse of the machine you need to consider, it's also whether you get paid or not. I'm not kidding - a lot of schools are tight for cash and cash flow, and owners of helicopters often get put to the bottom of the queue.
For a long while the rates for lease-back in the UK have been way too low. Compare them to the rest of Europe: in Italy, Germany or Switzerland you'll be paying a LOT more than £200.00 per hour to dry lease a R44.
SO, if you are intent on leasing back a R44 I'd recommend the following safeguards put in place - to protect the owner of the asset.
1. Agree an hourly rate of no less than £250 per hour, dry. Do not get involved in a fuel-inclusive rate.
2. Agree a minimum monthly usage of 20 hours per month.
3. Agree a set term of 3 years, with an either-way opt-out clause at the end of each 12 month term.
4. Take a deposit of 1 month's usage.
5. Agree payment term of: (i) 20 hours paid monthly in advance (ii) any hours in excess of 20 hours flown to be paid within 7 days of month end. Preferred method of payment is direct debit, with a standing order and electronic transfer being next best.
6. Agree that the school pays the premiums for insurance over and above private usage.
7. Agree that the school pays for ALL unscheduled maintenance over and above the set fees for the 50/100/300/annual services.
8/ Do not pay for hangarage.
9/ Choose whether you get paid for Datcon or flight time. Either way it should be what the student gets charged for.
For R22 lease-back, reduce the hourly rate to £125 and increase the number of hours to 30 per month.
If your chosen school happens to have its own maintenance facility, ALWAYS have it maintained elsewhere. You would not believe the conflicts of interest a school with maintenance factilities has when looking after 3rd party machines that the school use for training.
I appreciate that this post may not be very popular with school owners, but I know a thing or two about leasing back aircraft -- I've done it in the past and unless it were on similar terms to what I've laid out above, I wouldn't do it again.
I'm also completely aware that the inevitable consequence of implementing the above will be to (a) raise the cost of training and/or (b) reduce the number of schools and/or (c) increase the number of schools that operate their own aircraft.
In the UK, this is long overdue. Ask some of the school owners that are still around what it was like 15 or 20 years ago -- there was money in teaching people to fly then, but it's jolly hard these days.
If you want any more information, then please feel free to PM me.
Big Ls.
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Leaseback
If money is no object keep it at home!
Unfortuantly most owners of 44s only seem to fly abour 50hrs a year, and come the annual end up paying between 4 to 6 K for work carried out, due to S/Bs and leaking hydraulic actuators due to lack of use. Combined with ever increasing insurance costs, owners are seriously looking at getting a little back with self fly hire.
I am sure you could find 1 or 2 local guys who would like to use your machine and treat it with care rather than putting it out to a school.
Most instructors dont care about the machine that they are flying, they never put the covers back on or clean them, then end up doing run on landings, autos to the ground etc etc that basically end up with you having to pay large bills, letting students start the machine and warm it up whilst they finish their coffee! Student overspeeds the engine on start up! Owner ends up with a 40k bill.
I could go on and on! 44s are going out at £150hr dry in a few places at the moment!
I put my R22 out to a select few guys at £110 dry and the guys treat it as their own and I have had no problems, it keeps my costs down whilst burning the hours off that I could never fly.
Avoid flying schools as they are all nearly on their arse and will put you at the bottom of the food chain re payments for hire.
Good luck with your choice, I feel that everyone is feeling the pinch and if you can have a local syndicate or non equity group more people will be able to enjoy the enjoyment of flying helicopters, but unfortuantly the kudos of having it on the drive seems to win!
PB
Unfortuantly most owners of 44s only seem to fly abour 50hrs a year, and come the annual end up paying between 4 to 6 K for work carried out, due to S/Bs and leaking hydraulic actuators due to lack of use. Combined with ever increasing insurance costs, owners are seriously looking at getting a little back with self fly hire.
I am sure you could find 1 or 2 local guys who would like to use your machine and treat it with care rather than putting it out to a school.
Most instructors dont care about the machine that they are flying, they never put the covers back on or clean them, then end up doing run on landings, autos to the ground etc etc that basically end up with you having to pay large bills, letting students start the machine and warm it up whilst they finish their coffee! Student overspeeds the engine on start up! Owner ends up with a 40k bill.
I could go on and on! 44s are going out at £150hr dry in a few places at the moment!
I put my R22 out to a select few guys at £110 dry and the guys treat it as their own and I have had no problems, it keeps my costs down whilst burning the hours off that I could never fly.
Avoid flying schools as they are all nearly on their arse and will put you at the bottom of the food chain re payments for hire.
Good luck with your choice, I feel that everyone is feeling the pinch and if you can have a local syndicate or non equity group more people will be able to enjoy the enjoyment of flying helicopters, but unfortuantly the kudos of having it on the drive seems to win!
PB
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I learned the hard way
I rented out my R22s, before the days of the R44, and subsequently my R44s to a flying school.
Like many owners I was obsessed by recovering the VAT and whilst I had my trading company it was very convenient to have a flight school take care of all the nitty gritty operational stuff.
Having ordered my current R44 a couple of years ago I sat down one day to work out the running costs. I was horrified to see that it cost £16k a year more than if I had operated it privately.
Perhaps I was lucky as I only had one major problem in the 20 years that I rented the aircraft back to a flying school - a SFH started my R44 with the throttle open. The engine was completely trashed.
Additionally there were always a number on dings, scrapes and scratches, lost fuel caps, master switches left on flattening the battery and a number of other minor niggles which still cost money and aggravation. Although to be fair, the flight school did sort out a number of issues without cost to me.
Although I am not fully clued up on their current thinking, HMRC are taking a much tougher line about refunding VAT on helicopters and you may also get clobbered with a Benefit in Kind assessment if you choose to operate your helicopter through a company.
If you do pay the VAT and change your mind however, you do get two years to register for VAT and reclaim the tax - double check that with your accountant. I recommend that you get all tax advice from an accountant and not from the company you are buying the helicopter from - they can hardly be said to be impartial neither do they know your exact circumstances.
As already mentioned on this thread there are a lot of R44s out there (approx 300 shown on the CAA G-INFO data base as opposed to just under 200 R22s at the moment) and there are some ridiculous rates out in the market. Don't get sucked into this. As Biggles99 says the rates are much higher in Europe with the result that helicopter training and SFH is much more expensive too. The UK has more private helicopters than the next three biggest European countries put together.
Paying the VAT myself and limiting the number of people who fly it has halved the insurance and slashed other costs too. In cash terms I recovered the VAT outlay by two years saving on operational costs.
Helicopter ownership is not cheap but it is a lot of fun.
Like many owners I was obsessed by recovering the VAT and whilst I had my trading company it was very convenient to have a flight school take care of all the nitty gritty operational stuff.
Having ordered my current R44 a couple of years ago I sat down one day to work out the running costs. I was horrified to see that it cost £16k a year more than if I had operated it privately.
Perhaps I was lucky as I only had one major problem in the 20 years that I rented the aircraft back to a flying school - a SFH started my R44 with the throttle open. The engine was completely trashed.
Additionally there were always a number on dings, scrapes and scratches, lost fuel caps, master switches left on flattening the battery and a number of other minor niggles which still cost money and aggravation. Although to be fair, the flight school did sort out a number of issues without cost to me.
Although I am not fully clued up on their current thinking, HMRC are taking a much tougher line about refunding VAT on helicopters and you may also get clobbered with a Benefit in Kind assessment if you choose to operate your helicopter through a company.
If you do pay the VAT and change your mind however, you do get two years to register for VAT and reclaim the tax - double check that with your accountant. I recommend that you get all tax advice from an accountant and not from the company you are buying the helicopter from - they can hardly be said to be impartial neither do they know your exact circumstances.
As already mentioned on this thread there are a lot of R44s out there (approx 300 shown on the CAA G-INFO data base as opposed to just under 200 R22s at the moment) and there are some ridiculous rates out in the market. Don't get sucked into this. As Biggles99 says the rates are much higher in Europe with the result that helicopter training and SFH is much more expensive too. The UK has more private helicopters than the next three biggest European countries put together.
Paying the VAT myself and limiting the number of people who fly it has halved the insurance and slashed other costs too. In cash terms I recovered the VAT outlay by two years saving on operational costs.
Helicopter ownership is not cheap but it is a lot of fun.
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Probably agree with most things said here and with most of what biggles said, HOWEVER, an R44 will not suffer the same "misuse" at a school as an R22. Most cut their teeth on the 22 and then having had all the heavy landings, over-speeds, spindle bearing wear from lots and lots of autos progress onto a 44 purely to type rate and take their friends up. Yes I know several people train in the 44 and therefore my last comments are not valid but most don't.
Doubt if you would ever get £250 per hour today for a 44. Seem to remember seeing some sort of "black box" that you could fit to your heli that gave you start stop times, engine temps, rotor speed etc. Now wouldn't that be handy??
Bottom line, if you can afford not to do it then don't or buy a second 44 with lots of hours and little calender time left and use that at the school at a reduced hourly rate and don't give a sh*t what they do to it :-)
Doubt if you would ever get £250 per hour today for a 44. Seem to remember seeing some sort of "black box" that you could fit to your heli that gave you start stop times, engine temps, rotor speed etc. Now wouldn't that be handy??
Bottom line, if you can afford not to do it then don't or buy a second 44 with lots of hours and little calender time left and use that at the school at a reduced hourly rate and don't give a sh*t what they do to it :-)
Better red than ...
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If you really want some additional revenue for a 44 on the back of your own use, build your own small pool of SFH pilots (between 1 and 5) who dont fly too much and have enough hours and the right attitude. You will have to use your judgement on both of these.
Then you might cover your costs without adding to much to the depreciation curve and without the huge risk profile.
Then you might cover your costs without adding to much to the depreciation curve and without the huge risk profile.
Red eye,
That's all very well, but where do you find these people?
Anyone want to fly a Herts-based Bell 206 on such a basis? Two of us fly it at the moment and struggle to fly more than 80 hours a year, so plenty of availability.
That's all very well, but where do you find these people?
Anyone want to fly a Herts-based Bell 206 on such a basis? Two of us fly it at the moment and struggle to fly more than 80 hours a year, so plenty of availability.
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Anyone want to fly a Herts-based Bell 206 on such a basis? Two of us fly it at the moment and struggle to fly more than 80 hours a year, so plenty of availability.
Anyone want to fly a 2 year old Herts-based R44 Raven 2 with Flymap L on such a basis? Three of us fly it at the moment and struggle to fly more than 80 hours a year, so plenty of availability...
Lafite
Insurance for private owners vs. SFH or any pilot
Hi
There seems to be a limit of about 5 pilots, generally the least exprienced pilot is the benchmark. So if you have 3 pilots with 3000 hours and yourself with (say) 100 - it wouldn't be any cheaper than 4 pilots with 100.
Generally Haywards are the cheapest and they do offer some schemes to get the cost down. You might need to push to get a good deal.
Other options are to talk nicely to your local (or not so local) school and see if it works out cheaper to put it on a fleet policy.
Generally you are looking at Hull Value and Risks and the Hull Value seems to be a big chunk of it.
I don't want to be too specific about exact costs but I'll PM you with a bit more info.
There seems to be a limit of about 5 pilots, generally the least exprienced pilot is the benchmark. So if you have 3 pilots with 3000 hours and yourself with (say) 100 - it wouldn't be any cheaper than 4 pilots with 100.
Generally Haywards are the cheapest and they do offer some schemes to get the cost down. You might need to push to get a good deal.
Other options are to talk nicely to your local (or not so local) school and see if it works out cheaper to put it on a fleet policy.
Generally you are looking at Hull Value and Risks and the Hull Value seems to be a big chunk of it.
I don't want to be too specific about exact costs but I'll PM you with a bit more info.
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My first thought is don't do it. Leasing a helicopter back to a school is totally one way traffic. Whatever they pay you will not fully recompense you for their use of your asset. Servicing will come round more frequently and guess who will be paying the bills. Also things will go wrong more often if it is being used by a school.
I've never seen this work satisfactorily for the owner.
I've never seen this work satisfactorily for the owner.
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Helicopter Owners!
Seems you got your PPL flying someone else's machine and now you say that you don’t want any new PPL’S to use your NEW helicopter! Good job the owner of the aircraft you learnt in never looked at it that way!
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Seems you got your PPL flying someone else's machine and now you say that you don’t want any new PPL’S to use your NEW helicopter! Good job the owner of the aircraft you learnt in never looked at it that way!
If they were anything like me as a student then ABSOLUTELY!!
Lafite