Private ownership

[Guest Ken deVos]

Is it better to "hire, fly & forget", or, "buy, insure, maintain, fly and hangar"?

 

For say a $75000 purchase without further ongoing costs, you could do a lot of hire-flying (@ $7500pa = 10 years). What are the tips, traps, and costs of private and/or syndicate ownership?

 

 

[Guest aaronb]

good topic ken, i was looking at some prices to buy as well rather then hire, when i get my ticket :P

 

 

[Admin]

Ken - One thing that you could consider is the financial advantage of having spent $75k over 10 years in flying costs compared to having spent $75k and have a saleable asset after those 10 years but you will need to factor in your cost of capital.

 

$75k @ 7.25% over 10 years will have a total cost of $105k plus add to this the fixed costs (costs you incur whether the aircraft is in the air or not like insurance, hangar, rego etc) then work out the X number of hours you will fly per year to calculate the cost of maintenance etc (the variable costs usually calculated as a cost per hour of flight) and then subtract what you will be able to sell the aircraft for in 10 years and you will have a cost of ownership for flying the X hours that you have used in calculating your variable costs.

 

If my memory serves me Paul Willett (???) here at the forums has a financial model already made up that could be used

 

Hope this helps!

 

 

[PaulN]

Let's not forget the satisfaction factor too. Owning your own gives the advantage ofkeeping it maintained the way you like, caring for it the way you want,keeping it at a location convenient to you, and knowing it's always available when you want it (when it's not "broke" :;)4:).

 

Just my $0.02 worth (that's all I can afford ...Ibought a plane).

 

Paul

 

 

[pylon500]

The same could be said for most forms of transport.

 

Take cars for example;

 

Buy a $20,k car (cheap these days), then pay more than $1,000 a year to own it, $2,000 a year to fuel it, lose half it's value when you drive it off the showroom floor and finally throw it away after fifteen years... :ah_oh:

 

How many taxi rides could you get for that?

 

But would you want to? ;)

 

These are some of the factors that add to the achievement of building your own. :)

 

Arthur.

 

 

[Guest malarcon]

Hi all,

 

From a purely economical point of view, and when calculating it correctly, renting is cheaper than buying your own. This is due to the low hours a recreational pilot usualy gets to fly his/her airplane (Here is where the car/taxi comparison can be a bit off, as most people sit in their car at least 1h a day, although it works in places with good public transport)

 

Now if you can afford it, your own set of wings is something wonderfull, but as they say, there is no pricetag on that.

 

On a curiuous note: Most mayor airlines have sold their aircraft to leasing companies and are leasing the same aircraft now.

 

 

[Guest danda]

Great question in my case the closest hire aircraft is 2hrs away and they are used for training so you have to wait for a lull in training and in most cases you may only get an hour or so if your lucky.

 

All that aside the ownership of my own plane was not purely an economic one but the joy of knowing that it was mine and as they say “Oh what a feelingâ€Â.

 

One other thing that I have found as an asset in ownership is what I have learnt about my aircraft, how it works, how to fix it, if I do this, this will happen, there’s no greater teacher than experience and I don’t think the owner of a hire plane would allow you to get that type of experience on his/her aircraft.

 

Don

 

 

[Guest Graeme]

One of the big issues to come to terms with in our chosen sport is what sort of flying are we mainly going to be doing. Our planes are like motor vehicle, they have limited application in certain areas. What are you looking for. Speed, fuel economy, rough terrain, short field, carrying capacity/storage. There are so many variables to consider. I personally love rag and tube but have many friends who fly plastic. My primary application is rough terrain and believe me there isn't many places I cant go but the plastics overhaul me very quickly when we go away. but they cant go crabbing and fishing with me. My aircraft to replace, if I bought a new kit would be in the order of $50K set up. Thats my budget but I flew in a friends Foxbat the other day and it cost him near $80K to set up to his liking. I suppose the message is, work out where you will be spending yourflying hours and what will you be doing. From there its just a decision. You might find like me you save yourself 20 or 30K.

 

Cheers

 

 

[Guest Ken deVos]

Thanks everyone, for the responses so far. I think the consensus is best expressed by malarcon who wrote:

 

Now if you can afford it, your own set of wings is something wonderful, but as they say, there is no price tag on that.

 

I do get disheartened whenever I cannot hire an aircraft, when I want to fly. Everyone here in Victoria seems to be looking at the same weather charts as me and books as soon as the high pressure cell is overhead Perth.

 

Another issue is that most operators have a limited a/c fleet and there is a better return in student trainingthan solo hire.This further limits say, overnighters and longdistant flyins.

 

On the a/c purchase side...

 

What is the availability and cost of hangarage in your area? It might be OK to leave an old metal C150 etc in the paddock, but the plastics would suffer.

 

Cheers

 

Ken.

 

Ken deVos

 

 

[Guest Guest]

You can't beat owning an aircraft for flexibility and cost, especially if you build it yourself. Jabiru's win hands down in this regard as you can re-coop some profit when you sell. For a 600 hour input you will pick up $10k+ at sale time which will offset the initial outlay also; plus you get an aircraft you want.

 

Interesting comments from you ken regarding availability of aircraft as you fly at the biggest RA-Aus flying school in Australia yet an aircraft is sometimes hard to get your hands on; point being that it's much harder at other schools who have only a couple of aircraft - consider yourself lucky!

 

Buying an aircraft doesn't have to mean a $75k outlay; there are used models out there with many years of flying in them. Build a J160 for $50k'ish perhaps...

 

A wise CFI once told me...

 

"Owning an aircraft is like a bacon and egg sandwich. The chook's involved, but the pig's committed."

 

Owning an aircraft is NOT a cheap exercise and never will be. Anyone that says it is, IS lying; particularly if insured. With a syndicate, you are opening the doors for trouble with insurance anddamage - you would REALLY need to trust the other party that you are entering into the agreement with. Many syndicates end in disaster and many don't. What happens when you both want to fly to Narromine at Easter with your "significant other?"

 

Put some calculations together, post them here and we can all comment for you. Starting on a smaller or cheaper aircraft can be a good idea to keep costs down, however in the end if you "upgrade" to a faster or larger aircraft you'll be looking at a larger outlay - point being that perhaps you should have spent more in the first place.

 

Tough call. Let us know what you are thinking.

 

 

[Guest Ken deVos]

Thanks for your input here Nosmo, much appreciated.

 

In addition to the ‘bacon and eggs’ analogy, I suppose another is to own a horse – great to look at, pat and even ride occasionally. Just don’t ask the owner about the costs for agistment, vet, farrier, dentist, feed, grooming, training etc etc etc. And the resale value?… Hmmmm, great if you own a winning racehorse, but not so if it’s a nag with bad habits

 

I fully agree with you on syndicate ownership. It is a business partnership with all the traps and heartache. What hasn’t been discussed yet, are the pros and cons of leasing your pride and joy to an operator/flying school.

 

The kit build suggestion is interesting and I would like to hear from people who have committed to doing this and also why. However, should one discount the resale value due to the flight training limitations and airworthiness issues? A 55-xxxx usually has a better resale value than an equivalent 19-xxxxx.

 

Still uncommitted future owner

 

Cheers

 

Ken. Ken deVos

 

 

[Guest Guest]

The positive side of the Home-Built equation is that often you get what you actually want in terms of options and accessories, plus you get an aircraft that hasn't been "flogged" aroundin training for years, thus it will likely be in better condition.

 

As a side note, wait times for J160 in factory built at present are pushing up to 12 months, but kit builts, 2-3 weeks. This will up the price of homebuilts significantly, because remember not everyone wants to train in their aircraft - remember that only a small percentage of aircraft are actually "on-line" in a school. Probably not something to place a large emphasis on when making a purchase.

 

First step. Set up a spreadsheet with the costs that you will think it will cost for you. Then post it here and we can offer advice on whether or not your figures are realistic. Also try to find out the cost of hangarage or parking when you're making your spreadsheet.

 

You can't count on a great resale value, however it's normally better than a car, for sure. But then again with the price of petrol and AVGAS on the rise we might all be in trouble as LPG isn't an option for aircraft and diesel still uses oil...

 

 

[Guest Ken deVos]

Thanks Nosmo, for goading me into this cost evaluation process.

 

Here are my assumptions:

 

Time span: 10 years, flying 300hrs pa

 

Initial purchase price: $75k

 

Resale value: ($50k)

 

Depreciation: $30k

 

75-50+30 = $55k over 10 years or $5,500pa

 

Add annual costs of:

 

Hangar space @ $50pw: $2,600 ???

 

Insurance: $2000 ???

 

Registration: $1000 ???

 

Maintenance: $1000 ???

 

Running costs (fuel oil tyres): $10,000 (300hrs x 15l/hr x $2/l = $9k)

 

Total cost pa: $22k

 

Cost per hour: $73.33

 

If flying time is halved to 150 hours pa then

 

Total cost pa: $17k (running cost is halved to $5k)

 

Cost per hour: $113.33

 

E & O E

 

Ken. Ken deVos

 

 

[Guest Guest]

Well Ken, I come from a background of Boats, Planes and Horses and have owned all three of them so I fully understand the situation.

 

Here’s my suggestion. I think you’ll upgrade after 5 years so I’ll make it more realistic based on all of the people that I know who fly their own aircraft; in terms of hours, etc. Any more than 5 years and you’ll be up for an engine rebuild and more maintenance overall.

 

- 5 years, 156 hours per annum.

 

- Remember that’s 3 hours every Saturday. (ie. a LOT of flying)

 

- Initial purchase price $75k

 

- Resale value after 5 years, perhaps $48k.

 

- Depreciation $27k

 

- Depreciation = $5,400 per annum

 

Annual costs:

 

- Hangar space; Tyabb @ $60 per week. (not available at Tooradin)

 

- Insurance more like $4k’ish

 

- Registration $220 for first year, then $110 thereafter

 

Hourly costs ($31 per hour)

 

- Fuel. 15 Lph @ $1.80 = $27 per hour

 

- Oil $28 per 25 hours = $1.12 per hour

 

- Oil Filter @ $12.50 per 25 hours = $0.50 per hour

 

- Tyres $1.10 per hour @ $55 each (mains only)

 

- Punctures, tubes, transponder checks, miscellaneous $1.50 per hour

 

Running cost for 5 years; fuel, oil, tyres, misc, etc. @ 156 hours per annum: $24,180

 

Plus Hangar, Insurance, Rego. $36,260

 

Sub Total $60,440

 

Purchase Price $75,000

 

Depreciation – Less $27,000

 

Total Cost of ownership equals running costs plus depreciation $87,440

 

Per annum @ 5 years $17,488

 

150 hours per year (780 over 5 years)

 

Total cost per hour = $112

 

Remember 150 hours per year is a fair amount of flying and more than the average Private / Recreational Pilot. If you only flew for 100 hours a year, the total cost per hour will go up to $157 per hour!

 

If you built a Jabiru and saved $14k and flew 150 hours per year, you’re looking at around $94 per hour.

 

If you had to borrow money to buy this aircraft all of these figures will start to get a lot more ugly!

 

I hope I haven’t made too many mistakes!

 

J160 Jabiru Hire Rate @ Tooradin Solo $115

 

Owning your own J160 - $Priceless (or $112 per hour)

 

 

[Guest Ken deVos]

A job very well done Nosmo and thanks for the fine detail in the analysis. I do admit to guessing at a few of my figures and was surprised I fluked a similar result.

 

Perhaps those who do not go through this analysis BEFORE committing their money should think again.

 

An enlightened future aircraft owner

 

Ken.

 

 

[Guest Guest]

I should mention that many members (in fact most) out there aren't insured at all, except for the RA-Aus third party coverage which will make a bit of difference to the total cost...

 

You just don't realise the money you are throwing into it until you sit down and do the calculations; however if you have the money to spend, why not?

 

 

[bushpilot]

Guys - The advice and comments in this topic has been extremely helpful to me; I'm currently doing the sums on Jabiru or similar, and tossing up between new and used..

 

I wonder if those of you who have gone through the same process could comment on these questions (Or anyone else who has some thoughts):

 

1. A lot of the used a/c being advertised have a heap of extras - which if factored into new price add some additional value.. But what are the most useful 'extras' - based on what you have experienced as an owner or hirer? e.g. quite a few have additional instruments.

 

2. What are the relevent questions to ask a seller - apart from the obvious Total Time, Engine Time, major repairs and accidents?

 

3. How do I determine the quality of the maintenance performed?

 

Would appreciate any advice....

 

Cheers,

 

Chris

 

 

[Yenn]

There are quite a few RAAus members who came from GA and now own their own aircraft, but would never have owned a GA plane. The cost of GA hire is a bit higher than the figures quoted above, but not so much as to preclude hiring.

 

I always found it a hassle to get a GA plane when I wanted and they were very variable in condition, so to own my own became a better bet.

 

 

[Guest AusDarren]

Here are my assumptions:

(snip)

 

Insurance: $2000 ???

Insurance can be a huge variable I'd recommend getting a quote or two for your intended use. One owner I know has their Jabiru LSA55 online at Point Cook. their insurance is around $6000- per year.

 

Point Cook has an increased risk of bird strikes, and some policies forbid operations there. so a privately operated aircraft that is hangered in a good location may be a lot less. be prepared with hard facts prior to taking the plunge.

 

Regards,

 

AusDarren

 

 

[pylon500]

If flying time is halved to 150 hours pa then...

As a weekend instructor (one day a week), over the last five years I have still only managed to average around 110 hours a year!

I also own my own personal ultralight and am lucky to do 30 hours a year in it, more like 15~20.

 

Having said that, I usually feel it's been a big day to have done 4 hours instructing in a day.

 

Life cost to build my own ultralight: 3 years

 

Finacial cost: about $7,000 total

 

Emotional value of saying "That's MY plane": Priceless!!

 

Arthur.

 

 

[Guest micgrace]

Hi

 

I am of the opinion it is far better to own your own a/c rather than hire.

 

1. Can fly wherever and whenever you like (weather and regs depending) without being dictated to by operational concerns of a training establishment.

 

2. When moving from location to the next eg from Cairns to Brisbane and being dependent on training school a/c results in a "check ride" usually winding up in a full blown training regime since views of instructors on learned techniques are quite variable or profit orientated.

 

3. Bragging rights. Can at last say I own an a/c I bought/built wanna go for a fly?

 

Micgrace

 

 

[Guest AusDarren]

Hi2. When moving from location to the next eg from Cairns to Brisbane and being dependent on training school a/c results in a "check ride" usually winding up in a full blown training regime since views of instructors on learned techniques are quite variable or profit orientated.

 

Micgrace

you are absolutely spot on, over the years I have flown with quite a few instructors and each one has their own slant. most are quite professional; though I have had the occasional one that had ideas that were on the edge of the envelope. One instructor used to insist that you landed right on the Piano keys (in a Jabiru on a 1200m long sealed runway) Unfortunately he is no longer with us, Due to an accident that occurred when he didn't make the runway.

 

It has had a tempering view on my own judgement.

 

After a while you take the input from the people you fly with and form your own standards, hopefully getting all the best bits.

 

Regards,

 

AusDarren

 

 

[crazy diamond]

Can anyone do something like the cost breakdown done here or point me to some for the X-Air, or Thruster T500 with a purchase price of between $15,000.00 and $25,000.00???

 

 

[Guest adcom]

This running cost spreadsheet was sent to me from Jabiru. Hope it helps

 

Running Costs for J160 (2).pdf

 

Running Costs for J160 (2).pdf

 

Running Costs for J160 (2).pdf

[bushpilot]

This running cost spreadsheet was sent to me from Jabiru. Hope it helps

That's a real useful document - Thanks! The indirect costs are often overlooked - but this appears to tell all... (Except for the cost of make-up restaurant costs and other bribes for the other half...;) )

 

Cheers

 

Chris