to anyone who has owned a small plane

[utahpilot]

myself and a few other discouraged instructors are thinking of buying a cherokee or similar plane for about 30K. we've run the numbers on operational costs, rainy day fund, etc. we came up with a figure of about 700/mo for all costs. all 3 of us could instruct using the plane to meet that or fly it ourselves. I've heard good and bad about doing this. we don't want to lease it to anyone. we plan on flying it ourselves and using it to instruct as much as possible.

anyone who has done this, your input is appreciated

 

[LittleDeuce]

Owning an airplane

You know how you make a million in Aviation?...Start out with 2 million.

 

[pilotyip]

surprises

as an airplane owner, I pass this along, you need a A&P freind to do the 100 hours if you are instructing, the shops are very expensive. Also in airplane there are always surprises that can run into the thousands. AD's, repalce cyl, etc.

 

[ILLINI]

I've never owned an airplane and I don't know much about costs of owning one either. But an instructor I know bought an Archer with a partner and then found a mechanic to do all maintenance for free in exchange for free flight instruction - or rent it to him for the cost of fuel only. They did set a limit to the amout of free time the mechanic got a month, but I forget what it was. It worked out very well for both of them. The a/c owners got all their maintenance done for the cost of parts and the mechanic got free flight instruction/time. Keep in mind though that there are certain things he may not be able to do like avionics or engine overhauls.

Good luck!

 

[newmei]

The biggest problem I can see in instructing in your own plane is the insurance to rent it out to students (for like solo work) will cost you about 5000 a year. Other than that owning a airplane is almost always a break even proposition. I don't see you losing money on the deal unless you discover a huge corrosion problem in the wing spar or something. I flew a 150 that I owned for 500 hrs. I bought it for 14k put a 9k engine in it. Throughout the 500 hrs I put new cleaveland brakes and a new tail (bushing brackets etc) That with other stuff totaled about 2000-2500 including the annuals that I did when I owned it. That was a on a near perfect clean airplane. Put if I had it over to do again I'd do it in a heartbeat I basically flew for 500 hrs for only the cost of gas.

 

[seattle]

I like your idea of not buying something with retractable gear and/or a variable pitch prop. Those are two big money gobblers you won't have to worry about. I've owned an old Bonanza for about the past three years. It's a nice time builder and family toy, but old complex airplanes are expensive. However, my total hourly costs are still less than what I could rent a C172 for at the local FBO. I think if you can market your CFI talents successfully you guys will have a nice little business. I do some of the little maintenance tasks myself and have an A&P do the rest. Be careful, ownership can be a progressive disease. One airplane, or a non-complex airplane, may not be enough for you come this time next year.

LOL

Seattle

 

[KlingonLRDRVR]

Utahpilot,

Take some sage advice from an attorney who has seen the light and is now back flying. If you are going to enter into a partnership on this plane or a partnership in almost anything you need a good partnership agreement and I would further advise setting up a Limited Liability Company to try and protect eachother from liability should something go disasterously wrong. I know what you are thinking because I owned an aircraft on a shoestring myself and I got lucky nothing happened. You are thinking, you don't have a pot to "P" in therefore nobody would sue you because they would get nothing. Maybe, maybe not. In MN a Judgement is good for 10 years and renewable for 10 more unless you file Bankruptcy. Can you aford to have your wages garnished from a new airline Captain wage because of something that happened a long time ago that you personally may not have a direct cause in. At the very least get and read and make every potential partner read Geza Szurrovy's book called "Aircraft Partnership" look at Sporty's or Amazon for it. At least you can all approach the project with some background to what your true needs are. In the back of the book are some sample partnership agreements ect., ect.. I would seriously look into the Limited Liability Company with an attorney or at least have him look over your draft of an agreement to ensure that it complies with your state laws. If the attorney messes up at least he has malpractice insurance. With a bunch of guys the cost would not be that great. IMHO you can not afford not to. I admire you because you are at least thinking outside the box and have the drive to go for it. Good luck on your adventure!

KlingonLRDRVR

 

[tarp]

Utah,

1978 Cherokee Archer
Based in Suburban Mid-Atlantic Airport

Approx. value of airplane, IFR (Dual VOR, ADF, DME), Stormscope, 4-place intercom, wing leveler autopilot, 1750SMOH on 2000TBO engine = $68,500.

Fixed Costs:

-Tiedown = $100/month
-Insurance(Single owner w/750hrs in aircraft) = $1200/yr
or
-Insurance(Instructor, with signoff authority students only) = $6,700/yr.
-Annual = $750/yr. (Note: this only covers the labor required by regs to perform the annual inspection – all repairs are allocated to hourly maintenance account)

Hourly Costs:

-Fuel = $22.95/hr (9gph @ $2.55/gal)
-Oil = $0.50/hr (1 qt. per 6 hours @ $3.00/qt. – airplanes burn a lot of oil)
-Maintenance fund = $13.65/hr (You find out very quickly that a broken VOR turns into a $400 repair bill, a broken exhaust flange is a $200 event, an alternator with legitimate PMA stamp is a $300 part, etc. – even with that my Archer is affordable.)
-Engine Reserve = $7.25/hr. (A $14,500 engine overhaul lasts 2000 hours. If you don’t “charge” your partners for running out your engine, someone will get stuck with a very big engine overhaul bill!)

So is this what you had in mind??? Buy a used airplane for between $40-75K. WITHOUT instructing, you have $3,150 in fixed costs. Let’s say each of your three people fly 100 hours a year (which, by the way, is a good bit of flying). $3150 divided by 300 hours is $10.50/hour.

So you can either pony up $1,000/yr in an assessment to each partner or you can change the hourly rate.

If you put everything in the hourly rate, it will cost your partners $54.85/hr to run the airplane without “cheating” any one of the net value of the airplane. If you pay a yearly assessment of $1050.00, then you can rent the airplane to yourselves for $44.35/hr. If you instruct in this airplane and allow your students to solo (insurance companies already assume that if you instruct in an airplane, then said airplane will be flown by students of less capabilities than the owners), you will have to pay $5500.00 more in fixed costs. Since you now have students to help the airplane fly even more hours per year, let’s say you get a whopping 600 hours usage. And since you are now instructing, the insurance company will demand 100 hour inspections and 50 hour oil changes. So you will add an additional $2000.00 in 100 hour inspection charges ($500 for each inspection above the $750 annual). So $18, 150.00 is divided by 600 hours for $30.25/hour. Ergo, $44.35/hr plus 30.25/hr equals $74.60/hour to rent a 1978 IFR Archer in the Mid-Atlantic area with fuel and no profit for the owner. Do you now see why flight schools charge so much??

Generally, FBO’s make money by charging you for the fuel in the tanks of the rental plane and by a 100 percent mark up on the instructor’s salary. I.e., if you pay $40 for an instructor, $20 is going to the school.

Been there, done that.

 

[KlingonLRDRVR]

Just a side note of what I did in the late 1980's to build some multi time. I bought an old Apache PA23-160. It was your typical old "rat trap". I had my MEI but I did not want to beat my plane by doing initial ME ratings in it. I only did two ratings for friends of mine. I paid $16,500 for the plane. (Boy that price makes me feel old) I advertized in the college newspaper at one of the well known flight universities up in the frozen tundra seeking those who wanted to build time cheap. My only stipulations were I had to be up front in the right seat and sign it as dual given and I at least got a couch to sleep on if we went anywhere over night. I had takers and I had a blast. I flew out to the West coast and to the Grand Tetons twice to go skying. My being up front helped keep insurance lower and I got to watch so the plane was not beat too bad. I did this while I was in A&P school so the plane got to be the school's pet project every once in a while. I had the plane for less than a year and got 250 hours of multi time. I sold it $19,500 and after it was all said and done I lost about $800.00. (maintence can and will eat you alive). Not bad when you consider the 250 hours twin time. What ever you do make sure you pay a reputable mechanic to go over any potential plane with a fine comb. It will be money well spent. I just as easily could have lost $8000 rather than $800 and that is no exaggeration. I wish you luck in your adventure.

KlingonLRDRVR

 

[BlueRidger]

Utahpilot,
I used to fly an Aztec out of LGU to build time and I did a little instruction in it to off set the costs. Utah is a expensive place to own an airplane, due to limited numbers of good A&P's and even fewer AI's. My advice to you and your friends is to just buy the plane and do not get involved with instruction for hire. As was suggested earlier form a LLP to CYA. Plus this allows one partner to get out easily and new ones to join. You could have more than 3 partners although more than about 8 partners becomes burdensome. If you are going to instruct or even if you just form a LLP try to do this in conjunction with another group of people who have an airplane and ask your insurance company for a "fleet rate". I worked with a guy who had a C150 and by putting me on his insurance it cut the cost of both our insurance in half. Granted this was still a lot higher cost than with no-instruction policy. If you want to be selfish, then your best bet is to find a well run club that is already esablished and become the check airman for the club and get a low hourly rate plus some free time and pay.