Putting a plane online GA Questions

[Spriteah]

Im hoping that some people here can give me some idea at costs of running a plane.

 

I am considering purchasing a C172M IFR with 1400hrs to go on motor. So my questions are:

 

What money per hour am I likely to get if I place the plane online at a school?

 

I would need 100 hourly, generally how much do they cost?

 

I would need insurance approximately how much would that be?

 

On the other side of the coin can I rent it to just a 'few' friends and avoid many of the costs?

 

Any Advice would be greatly appreciated.

 

Jim

 

 

[dazza 38]

Hi Spriteah, i would like to help but my figures are from 1998-1999, vintage, that was for a Piper Archer, so it is pointless to use those figures now. I was wondering though, what is the Total time of the airframe? Also our plane was IFR, there is a bit of a extra cost, in that. Instrument calibration etc.Our a/c flew alot, around 12-18 per week, so our 100 hourlies, were carried out every 6 or 8 weeks, which turned out to be not to bad of a cost, because any Ad's where taken care of regulary, there wasnt many anyway.Our 100 hourly inspection where cheaper than the normal, due, to as above, being done alot. Insurance (hull) i think is still around 3 per cent of price. Although ours was $4500 per year, back in 1998, the plane cost us back then, $68 000, with a hawker Blue seal engine just fitted. I would like to know myself what the going rate is these days, we got $90 per hour, dry hire at southern skies aviation archerfield.It was bought out be Steve Maultbe, and turn into sunland aviation, where the cirrus A/c, are assembled and sold.

 

It is interesting, that the a similar a/c, now for sale,(12 years older), is the same price or more expensive, than when we purchased 12 years ago.

 

Paint is a biggie, i think around $8 000.

 

Sorry i cant be much of a help, on this.

 

 

[dazza 38]

We were lucky, we bought the a/c off Brian Westen, who owned Southern Skies, we were looked after.Alot of people are not.

 

 

[poteroo]

Spriteah,

 

A word from the 'bitten' to the unwary. Crosshire is a financially risky exercise.

 

You might try using the rent-out price/hr that you can get for a 172M from any flying school, and then subtracting costs from there. What you'll come up with is a number which is probably $50/hr more than that offered as dry hire. That's the margin the AOC holder expects to clear on the transaction, after their allowance for fuel. Say they rent out at $180/ VDO hr wet: then their costs are the fuel, say $50/hr, plus what they allow for 'overheads'. So, $180 less $50 = $130......but you'll be offered about $70/hr - and that will be tacho. So, there's a gap in there of about $50/hr, plus the difference between tacho hrs and VDO hrs - probably 10% more.

 

Now, you certainly have real overheads of your own - which you'll never cover out of $70/ tacho hr 'dry' for a 172. Out of that you'll never even have enough to cover your engine and propellor overhaul 'allowance' or 'reserve' - a number I'd put at some $45/hr on current prices. Your insurance is certainly going to cost you $32/hr based on 100hrs pa and a purchase price of $80,000. An annual,(100), inspection cost of $2000 is possible = $20/hr...by the time you cover AD's, Rad 43/47 checks, instrument checks and allow for other replacements and consumables. This doesn't allow much 'margin' out of an offer to cross-hire @ $70/hr dry.

 

But, you would have to pay fuel if you rented out privately on a 'wet' basis. So - you are back to $130/hr before you allow any extra for overheads - as has the school hirer. You'd be wise to consider that even the best clubs and flying groups are renting out at about $150 to members.....meaning there's not much margin in it for an owner who wants to rent out.

 

On top of all that, there are perils in renting to your mates or a limited number of outside pilots. Your insurance will jump at least 1%, or around $1000pa as a guesstimate. As well, you'll have to provide your insurer with a list of 'nominated' pilots plus their experience and accident histories, which might cause the insurer to amend your premium upwards.

 

Then, you'll find that the question of currency arises. Who's going to check these prospective renters? Unless you're an instructor yourself, you're then having to obtain outside help.

 

In my experience,and that of my aircraft owner friends - neither cross-hiring, or renting out privately, is worth the risk and effort.

 

PS: I've owned 9 GA aircraft over a 33 year period, and only ever rented a couple of them to pilots whom I knew well, and had checked thoroughly. And, I 'nominated' them on my insurance as well.

 

happy days,

 

 

[FlyingVizsla]

Hi Jim,

 

I did a bit on aircraft costs based on my present C152 - you can find it in General Discussion a few pages back under "Aircraft Purchase" by Crashbait. Just saves repeating myself.

 

Good Luck

 

Sue

 

 

[Bill Hamilton]

Spiriteah,

 

Before you go any further, ask yourself: "Why am I doing this?"

 

If you don't have a really good answer, give it away.

 

If you want to be an owner/operator, but cannot afford it without rental income, you cannot afford to be an owner/operator.

 

If somebody tries to sell you on the idea that the losses are tax deductible, forget it, because it means that you are planning a non-commercial operation, and there will be two results:

 

(1) Anybody who plans a non profit or loss making operation always succeeds beyond their wildest dreams (nightmares, really), and;

 

(2) There is a very good chance the ATO will knock back deductions, because there was no realistic hope of making a profit --- it was not a genuine business --- even if they do allow some losses, check with your tax accountant, the losses allowed will not be all the losses.

 

Insurance will (not might) be another nightmare, and don't forget that the new MANDATORY insurance that is likely to become law about December this year. It is a sure fire bet that the mandatory nature will be seen as an open go by insurance companies, and;

 

All this without taking into account that the normal legislated consumer laws, that you enjoy in insuring a car or boat don't apply to aircraft, with the result that there are so many really sad stories from "owners who thought they were insured" ---- which they were, except for so many things that happen to aircraft.

 

With all due respect, if you have to ask the questions you have asked, rent, don't buy --- with the intent of putting the aircraft on line.

 

Buy a Jab or similar, just for your own use, do all your own maintenance ----- and enjoy flying.

 

I know of one sad case of three small single engine aircraft on line with a flying school, and the owner was an instructor with the school ---- and he still lost over $100,000 getting done over by the school.

 

Regards,

 

 

[dazza 38]

I do agree with the Guys above, the only aeroplane that i owned, was the archer, and we owned it outright.Thats why is was profitable in my case.But as the guys have already said, it doesnt work out on paper, if you are paying it off, etc. Thats why i rent at the moment, it will always be cheaper.But having said that, i am saving for another bird, but it wont be online,(as Bill has mentioned, if it has to be online for you to be able own it, its not worth it.) The a/c i am saving for,will be for me and the missus/friends to enjoy."your dead for a long time".Might as well make the most of life and live the dream.Cheers