New twin! Any ideas???

[guidoverduci]

Hello- I've been thinking seriously into buying a twin engine plane, and leasing it back to a flight school. My question is besides leasing it back, do I have any other options in using it as a way of making money. I understand about commercial carriage, but at the same time, I'm a little confused! How hard would it be to buy a 135 certificate and start a small charter operation? Any information would be appreciated.... thanks

 

[Typhoon1244]

I know where you can get a Brasilia cheap...

(Sorry, I don't have anything more useful than that. Anyone else?)

 

[vossdr1]

guido,
If you want to start a 135 operation, you could get a good idea of the work involved if you read the requirements for personel for a 135 certificate. If you are still interested in it, call your local FSDO to get the ball rolling.

You might be interested in a piston fractional ownership.

In any operation, money and insurance will be the sticking points.

 

[bigD]

I dunno man, I tend to think than any twin worth using for 135 ops isn't going to be easily rentable by Joe Blow at the place you plan on leasing it back to.

 

[bobbysamd]

Multi instruction

Why don't you just instruct in it yourself and not lease it back to the FBO? It's a great way to build multi PIC time. Also, you will have control over who is flying it, as opposed to the FBO, who could rent it to anyone.

My MEI was a partner in his Baron. All he did was give multi instruction. I forgot how much he charged, but it was far less than the few multis available on the field. Another good thing was the airplane was not heavily scheduled at all, so I didn't have to fight others to fly it.

Aside from insurance considerations, you would have to get regular 100-hours. You might have some business formation considerations as well. Also, you would have to troll for students. But if you can undersell the competition, which you can because you would have less overhead, you should have plenty of business. You can instruct Private multi, Commercial-Instrument multi, and even work with ATP aspirants.

Good luck with your plans.

 

[JJay]

You may want to check insurance requirements before you get involved with a twin. Premiums have really risen considerably the last few years as have hourly requirements.

 

[C601]

guidoverduci

I have some knowledge in this area, and will try and answer any questions you have. Its funny because the other day I was offered 2 C-152s and 1 C-172 at an excellent price, and I was thinking about buying them and leasing them to a Flight school I know that would have a need and keep them in good condition.

After 9-11, applying for a Part 135 cert has not been made any easier, and to go out and simply purchasing a Part 135 cert is even more difficult. 1st of all there not cheap and 2nd a 135 is only as good as what airplanes are currently appproved to fly on that 135 cert, any other aircraft added to it, there is a strong possiblty proving runs would be necessary for the FAA, it also depends on who is going to be flying the aircraft listed on the 135cert. Insurance is another huge factor and can be very costly.

It would seem in order to jusify of having a 135cert financially, 1 aircraft would not make it worth while. Unless you simply have money to waste.

As Far as buying a Twin and leasing it back to a flight school would seem to be a better approach, the flight school would be responsible from insurance to Mx, and making sure the Twin meets FAA standards. Make sure what ever flight school you lease the Twin to, make sure they have good financials and are in good standing with people they do business with. Better yet find out who where leasing the aircraft from ( if so) and get everything you can about if they have made there payments on time. You don't want to find out they are in the hole with the local fuel company for alot of money and your Twin is been "held" until they pay up, could become quite costly trying to get "your" twin back and hopefully in the condition you lease it to them in.

The other side is to find a flightschool that has a 135 cert already and there in need of the same twin that is used with the school.

Fireblocking is a must for all airplanes that fly 135, its not cheap.

these are just somethings that come to mind. if there are any other Qs, i'll try and answer them .

 

[Toy Soldier]

1. Check out www.part135.com. Paul can answer your questions about the different types of certificates and rates for his assistance in obtaining them.

2. Getting commercial insurance for flight instruction will be tough. However, call Falcon insurance at 800-370-0557 for your insurance quote. I was quoted $3500 for C150 commercial insurance for instruction. Also, they are very leery of insuring lower-time cfi's with a single ship startup operation.

3. Charter insurance on a Seneca II, with an ATP pilot is about $15,000 a year.

My suggestion is to buy a partnership or own one outright yourself. Then, fly missions for Angel Flight and write off your expenses as taxes. If you go the CFi or the 135 route (even if you could get approved), then you will be tied to that student schedule "just to pay bills". Try to find a way to have fun flying while building time and NOT get strapped into a bunch of high-dollar liability and hassle.


Good luck...

 

[Toy Soldier]

Oh yea, I did the leaseback deal and got shafted. The school got 30% off of the top and I then got ALL of the expenses and whatever "profit" was left over.

At the end of 7 months, the flight school made $15,000 and I was in the whole to them for $4000 when it was over! I OWED THEM MONEY!!!!!!

Here are a few suggestions to think about when negotiating with the local FBO:

1. negotiate a 15% or so leasback rate.
2. Make sure that you can fly the plane as much as you want for gas only.
3. Make sure that you can INSTRUCT in your own plane and receive the entire fee!
4. Find your own A&P and try not to pay through the school.
5. MAYBE THIS - you could also "turn over' your plane to the flight school with the agreement that you get NO profit from the AC but you also get NO bills. The f;light school gets 100% of everyhting. The benefit to you is that you can fly the plane whenever you want for gas only. In essence, you have a "free" plane that will be given back to you after a year or so with higher time and worn out engines!

Think it through, draft a draft aggreement, get a lawyer, then go for it.

On the flip side, I have seen some planes make out pretty good - but the owner was typically an A&P as well!

 

[vclean]

I believe the Atlanta FSDO has a 135 checklist/guide on their site.

 

[NuGuy]

Hi Guido,

If you are an AOPA member, head over to their message board and ask your question. They have a couple of guys who are active leaseback people, and you can get a great outline of how to do it, and what pitfalls to avoid. One guy has a whole document he'll send you that really lays it out.

FWIW, the best you could ever hope for is to break even on the airplane, maybe build some equity and do some flying cheaper (a little cheaper, and certainly not free) that you might ordinarily.

The problem with a twin is that you really need an active school to make it profitable, and if it's flying that much, you'll never get to use it unless you want to chase your students away. Sort of a catch 22.

But, if you are looking for a way to defer SOME of the costs of ownership in exchange from some inconvience, then it might work. But if you are looking to fly alot of time on it, you might be better off with a partnership.

Forget a 1 man 135. Any airplane that is cheap enough to get isn't worth doing 135. You would be pouring money down a black hole.

Best,
Nu

 

[FSB99]

you've already got some great advice up above, here, but just to add my thoughts in on the 135 certificate deal.... although i haven't been an aopa member in almost 10 years, i do remember seeing advertisements and mailings refering to the service they offer, specifically helping guys like you starting this type of operation. the service apparently offers advice on where to start, and personal contact with lawyers who will take care of most of the paperwork for you, just sign on the dotted line, type thing.

if you're not an aopa member, and you seriously are considering using your personal airplane on a 135 gig, maybe look into joining and check that service out.

good luck!

 

[planejanes]

NBAA is another good resource....

https://www.nbaa.org/merchandise/part135.htm

 

[Timebuilder]

It's a real quandry.

On the one hand, a ship that is good for 135, like a Navajo, is not good for basic multi instruction (price per hour) and has high insurance (about $17k two years ago, certainly over 20k now).

A ship that is good for multi instruction, like a Seneca 1, isn't much good for charter. A little, but not much. Capacity, comfort, range, and speed are all factors.

A ship that flies a lot and makes you money at a school will be hard for you to access for your own flying. Also, at 500 hours, it will be a while before you can build enough expereince to fly the charter runs yourself, or be insurable for either charter or individual dual given.

Of course, if you have the money to spend, you can hire the right people, pay the insurance, and pick up some time on the part 91 dead legs. I think there are far better places to put your money, though.

 

[SDdriver]

I would say lease back would be the way to go. I just went in partners with a guy that owns a 141 flightschool and 3 FBOS, I am now a recent new owner and operator of a 135 cert that I obtained from scratch. If you are only one guy doing it, I would say it will be very hard!! It is not impossible and it doesn't require as much money as people think, but it is still very time consuming and that is all you can really devote yourself to as I have done. WE have a leaseback Duchess at our school and it seems to work pretty good for the owner, but it is not a good charter plane, due to the reasons Timebuilder gave. In fact, he is dead on, you are not going to find a twin that is good for training and renting, that will be good for charter, it will almost always be to slow, carry to little, and not be comfortable enough for paxs.

I would say unless you have dreamed of owning and running your own 135 for years and years, then don't try it. You kinda have to love it to do it, cause the money can be good, but it is hard work and you have to set things up just right to make good money. I have always wanted to open one and run a 135, so for me, money almost aside, it is a dream come true, so moeny or not I am really happy and loving every min of it.

I would say we would be interested in your twin for lease back at a new location of one of our 141 schools, but I am sure I am to far away for you to enjoy using the plane.) Most of our new 172's are all lease back aircraft and our owners are very happy with the situation.

Good luck, and if you need some more advice let me know, but I have to say you have had some really good people above give you a lot of great advice. Take care.

Oh btw, as far as buying a 135, be very careful as to the history of that 135, but like I said I wouldn't even go that route in your situation.

SD

 

[mike1mc]

You can always put the plane on someone else's 135 certifcate and let them handle the crewing, maintenance, etc. You'd probably be able to get "hired" by them, take a 135 SIC checkride and be able to log SIC time for the 135 legs. Doesn't sound very profitable or desirable to begin the LONG process of getting your own 135 certificate. The best twin for charter is a Baron or Twin Cessna (C310). I know of a few operators with Senecas, but don't know how much flying they do. I would think the charter agreement would be more desireable because the plane will be kept to higher maintenance standards, flown by pilots with more experience, and the plane won't be put through engine shutdowns, and other stresses that go along with flight training. Just food for thought.

 

[SDdriver]

I would disagree with the 310, just because of the seating arrangment (all forward and hard to get to the back), we have a 2001 Seneca 5 on ours and it is a great plane, I would rather a baron, but we couldn't get the one we wanted. As far as twin cessnas are considered, the 402, 414, 421 are all great for charter (not for training), we also have a 414 among other aircraft, but they are great. He is right though, you could put your plane on a 135, it is basically a managed plane at that point, something that is becomming very popular these days, and he is right, you could get on as an SIC and fly 135 while your plane made money. WE obtained most of our aircraft for 135 this way.

Only isssue is, most 135 are probably not going to want the twin you are looking at, like some and myself said before.

SD

 

[SDdriver]

BTW, Dude I love that movie Clerks!!

SD

 

[Timebuilder]

Here's another angle, one I had forgotten about.

Putting a twin on a 135 certificate is one thing. Putting one on a 135 certificate for the first time can be a big expense, due to life limited parts, fireblocking, etc. Buying a twin that has already been used as a 135 plane is much easier. This is where proper logbooks and a previous owner who has not been in trouble with the FAA helps a lot.

Second sticky note: buying a plane at a government auction. You can get a great buy, since many are drug siezure aircraft. But- you can also set off red flags when you enter the country after a trip to the carribean or central America, since that tail number will pop up again as a suspicious aircraft. I can't tell you if there is a way to get off the list, either. Bringing such a plane in from Costa Rica resulted in a complete search, with long delays and a K-9 from the Palm Beach PD. Nice people, but a huge pain in the keister.

 

[guidoverduci]

WOW! thanks for all the excellent responses. I do have one more question... When I lease back the plane to the flight school and say by word of mouth people find out that I have a plane. Can I charge them to fly them somewhere? How sticky is that reg? Can anyone explain?? Thanks again everyone