Corporate A/C on 135?

[El Bucho]

Just wondering how common it is to bother putting the Corporate A/C on a 135 ticket. For those that do, do you get that much additional use out of the 135? We yanked the Mu2 off of a 135 becasue then insurance company wanted another 60 grand a year or something absurd to keep it on 135. It didn't do enough 135 work to come close to paying for that. For those with airplanes that insurance compnanies don't mind so much, what is the difference in cost to put it on 135 or not? Wondering if there is any difference in those operating jets vs. turboprops, etc. Assuming of course that the company doesn't fly so much that they need aboslute exclusive use of the aircraft. Thanks...

 

[Rick1128]

There are several reasons to put an aircraft on a 135 certificate. It will not DIRECTLY pay for itself that way. But in many states there will be a reduction of sales and property taxes, as much as 100% reduction. Fuel and training discounts. And so on. There is also accounting reasons. Being able to charge clients and subsidaries full rate. And don't forget that after 9/11, 135 aircraft were flying 2 days before Part 91 aircraft were. So you really have to look at the full picture. If someone tells you that it will pay for your use of the aircraft, they are blowing smoke up your skirt. There are some additional costs as you have found out, insurance and training to name a couple. But you have to fit it into the big picture.

How much an insurance company charges depends. A MU2 is going to be high rate because of it's record. A 135 MU2 will even be higher, again because of the record 135 MU2 operators have. Other aircraft have little or no increase when going on a 135 certificate.

 

[El Bucho]

Good to know that other aircraft won't have the jump in insurance to put on 135 like the good old Rice Rocket. Where is the best/easiest place to find out about the tax info? I'm guessing most accountants worth anything would know about this type of stuff?
One other question, is it worth the time and hassle to pursue your own 135 certificate? If not, what kind of bone do you throw the guy to put your plane on his ticket? With a 172RG I leased back to a company it was something like 20% of the hourly rate, which might work for the small piston bangers, but when you start talking about Jet-A...think another arrangement would be bettter obviously. Thanks again....

 

[Rick1128]

It would depend on how big your operation is, but normally it is not worth having your own certificate. Just way too much paperwork. Many operators love having another aircraft on the certificate.

As the owner of a jet, you might have to pay for proving runs, if the operator doesn't have that type aircraft on their certificate. Can be up to 25 hours of flying. Can be reduced depending on the operator.

As for payment. It depends on the operator and what is being provided and by whom. Some it is by an hourly rate. Others by a percentage of the charter revenue. There are numerous ways to do this.

The insurance will depend on so many factors. The operator, his history, where training is done, what type of aircraft, etc. And don't forget that hull and liability limits may be different between 135 and 91. So there may be jump in rates, but it shouldn't be as drasic as the MU2.

 

[Otter]

I agree with what has been said above.

Any management company worth its salt will have a fleet insurance policy. The fleet policy is the BEST way to reduce the cost of insurance.

A sophisticated management company should have tools in place to assist in tax issues, insurance, reduced trainging costs, and so on.

The hard part is finding good managemnt companies that have all the tools, and are not just a marketing machine.