Aircraft Leaseback....??

[Smash312]

I've just recently purchased a 1981 Cessna 152 II. Nice clean place, all the logs, VFR...... Now, I was thinking of just putting it away in a hanger and flying it when I fancy. But money making options have been coming up. Can someone please take the time to go though exactly what a leaseback program is and how much I can possibly make from one. I know the vague outline, but don't really know figures. Would someone please be kind enough to go though the pitfalls and benefits of putting an aircraft on a leaseback program and what should I look for.

The reason I ask is that I work at a flight school where they have 4 old battered 152's. The thing is that they ALL fly +8 hours all day everyday. They are tierd. Now, buy me giving this aircraft to the flight school, how much should I expect per hour from them (ball park figure).

 

[Flyboyz]

A leaseback is when you lease the airplane to a flight school in exchange for an hourly rate everytime it is used. All leasebacks are different between schools. I think you can expect at least 75 hours a month at between $50 to $75 per hour. Again this differs by school. However, you must really understand that leaseback contract, a lot, and I do mean a lot of these contracts screww the owner big time if you are not on top of it.

For a C152, I would definitely put it on leaseback. There really is not much you can do with that plane but train anyways so you might consider making a little money on the side.

 

[Lead Sled]

When it comes to lease backs, you need to be very careful. I've seen my share of lease back arrangements over the past 39 years and, in the long-run, most of them only really benefitted the flight school or FBO.

Don't rely on the promise that "Hey, you buy an airplane and we'll make the payments for you" - it doesn't always work out that way. Your best interest and theirs are typically two different things. Everything typically works well for the first year or so, but then the airplane starts to show some wear and tear. (Which will annoy the heck out of you, the owner; but it won't seem to bother them nearly as much - trust me.) At some point, they'll start pitching the same program to someone else - they like being able to rent out brand new airplanes. You'll be stuck with two choices, either refurbish the airplane or lower the rental price to keep the utilization up. After all, way pay top $$$ for a ratty airplane when you can rent their new one for the same amount?

Take your time. Talk to people who have have similiar dealings with the company that you are thinking about entering into a contract with. People who have been "full circle", not just in the first year or two (the honeymoon phase) of their agreement. Did it work for them? What were the issues that they had to deal with? Bottom line is that you have to approach it as analytically as would would any highly speculative business deal - keeping the emotional aspects of aviation out of it as much as possible. (We all want to own an airplane.)

Have fun,

'Sled

 

[PimpJuice]

Keep in mind, if you leaseback a 152, it's going to get beaten like a rented mule by students learning to land.

 

[AC560]

Leaseback's usually don't end up being a good deal. Once you factor in the cost of the 100 hour, fuel, insurance, etc. there is little if any money left for you (and if its a leaseback involving the FBO, any FBO worth its weight is going to jam you on the fuel/maintainence). Consider also the liability risk you assume if the plane crashes.

And as PimpJuice says the plane is going to get abused, rental power setting anyone?