Can you make money from Recreational Aviation

[Powerin]

Along the same lines as Tomo's thread about RA aircraft making money, I'd be interested in some opinions on making money, or even a living, out of Recreational Aviation generally. After 4 years drought thumb_down I'm thinking it might be time to explore options other than farming. Aviation would be my first choice but I think I'm too old (45) for commercial aviation.

 

I think I'd love both instructing and aircraft maintenance, perhaps even setting up a school. Do you think there is a demand for more (or even a shortage of) instructors and lames? Is there enough work in those areas to make a modest living (I'm a farmer...I'm used to living modestly ), or is it only something you would do in your spare time to help pay for your own flying habit?

 

I realise this is like asking about the length of a piece of string, but I'm interested to hear your thoughts. Thanks.

 

Peter

 

 

[Guest basscheffers]

The fastest (only?) growing segment of general aviation? can you make money from that? Of course you can!

 

Just have to offer the right product in the right location... Have a look at what's going on around you. In your neck of the woods, neither Mount Gambier nor Hamilton have an RA-Aus school listed. (Really?) Sounds like there's some opportunity there.

 

But before you can have your own school (be a CFI) you'll need experience as an instructor under another CFI. That'll take while; better start learning to fly! :)

 

To be an instructor; you'll need at least 75 hours command and then do the course. Then there is a number of hours before you can be senior, then more for CFI. So a fair few.

 

Of course to do maintenance for reward on other people's RA-Aus aircraft, you need only a level 2 maintenance endorsement, not be a LAME.

 

 

[Tomo]

Of course to do maintenance for reward on other people's RA-Aus aircraft, you need only a level 2 maintenance endorsement, not be a LAME.

Wonder how hard it would be to get something like that? Shouldn't be overly arduous if I have a mechanical trade already... maybe?

 

 

[GraemeK]

Tomo

 

The RAAus Technical Manual has all the requirements - way I read it, with a trade you're off to a flying start . Formal training and qualifications in the technical trades seem to be close to the top of the list.

 

You need to get some experience, and get a recommendation from two peers.

 

 

[Guest ron dunn]

I can assure you that after forming and running an RAA flight school here in Port Pirie S.A. for 15 years, you are really in it for the love of it.

 

Running aircraft as a business is a money intensive game, and while your turnover might look good to the outsider, if you are fully insured and maintaining aircraft and school to a good safe standard there will not be a lot left over.

 

If you can get yourself set up for it then have a go - you could be one of the few that are an exeption.

 

Cheers

 

 

[Powerin]

I can assure you that after forming and running an RAA flight school here in Port Pirie S.A. for 15 years, you are really in it for the love of it. Running aircraft as a business is a money intensive game, and while your turnover might look good to the outsider, if you are fully insured and maintaining aircraft and school to a good safe standard there will not be a lot left over.

If you can get yourself set up for it then have a go - you could be one of the few that are an exeption.

 

Cheers

Thanks Ron, I thought that might be the case. Sounds like farming. So the old adage about how to make a small fortune in aviation....start with a large fortune...is true. But it's great if you love what you do and can pay the bills.

 

Peter

 

 

[facthunter]

Payment/ Profit in flying.

 

When people love what they do they will do it for nothing, and that is what you are competing with. Also if you want to spoil your hobby, make it your job.

 

Sell fertiliser or insurance and BUY (or build) the plane YOU want. I have never known anyone in aviation who made REAL money from it. It is a good way of getting rid of most of your surplus money, I can asssure you. Nev

 

 

[dunlopdangler]

I am with Nev. If you want to make a small fortune in aviation...start with a large one!!:thumb_up:

 

 

[Tomo]

I am with Nev. If you want to make a small fortune in aviation...start with a large one!!:thumb_up:

Yeah...

 

 

[JG3]

A friend of mine took the Aircraft Maintenance course at Caloundra, and is now doing his on-job experience to qualify as a LAME. He finds there's lots of work readily available if you're willing to go away from the coast - Mt Isa, etc. There's a real shortage of LAMES now, and most of them aging and near the end of their careers, so the shortage will be critical before long. He's 50 now and really enjoying his new developing career.

 

JG

 

 

[Guest check-in]

Maintenance has the potential to make a bit of money, because you don't need a huge investment to get started, and most people these days are used to the idea of paying a tradesman upwards of $75 an hour. That's about the minimum you would pay for car servicing. Biggest issue would be liability insurance.

 

On the other hand, running a flying school is strictly for those who need to LOSE money for the taxman. Consider - the aircraft must be a factory-build and to be competitive probably needs to be fairly modern. So at least $100,000 invested to start. Plus suitable briefing rooms and aids = more money. Plus liability insurance - can't avoid that one it seems.

 

Then, to consider - what will RA pilots pay for dual versus solo? At the most a difference of $50 per hour? So you fly 500 hours a year plus an equal amount of briefing and debriefing time = 1000 hours work to make $25,000. Even if you could fly 1000 hours per year, it's still a very poor return for what would amount to 2000 hours work. Most instructors would burn out if they did 1000 hours flight instruction in a year. A full-time instructor would be hardpressed to stay keen beyond 800 hours a year and if it was your own flying school you would have heaps of other things to do like paperwork and maintenance.

 

I do know a guy who has a couple of Piper Warriors on line with commercial flying schools. Because he is a LAME and does his own 100 hourlies etc, he claims to be doing OK, so maybe buying and leasing out is a way for a Level 2 to make a dollar. Dunno...

 

 

[Guest ozzie]

A GA workshop and it's equipment has to conform to CASA standards. The workshop must also have the correct equipment that is tested and calibrated. There must also be a 'sterile' area were out of hour componets are to be stored to prevent them from ending back in service.ect ect

 

Q. does a RAAus workshop have to comply or can one just operate from the boot of a car with tools bought from the dollar shop?

 

Ozzie

 

 

[Guest check-in]

When I got the airworthiness report on my Sonex at time of purchase, the reason the L2 (in fact he was also a LAME) could do it so cheap was because he did not have to work from CASA-approved premises. He was very thorough, so I had no issues with his expertise or value for money. On another occasion I went to him for a small repair and rather than do it all himself, he instructed me in how to do it and stood over me while I did it. A great learning experience for me. Then he signed it off in the logbook. That is one of the best things about not being VH registered.

 

As far as I can see, nothing would prevent one from carrying the necessary tools around and doing work in any hangar. The only issue that could make it unattractive could be liability, if the insurers took a different view. It would be prudent to get conditions of any policy clarified, maybe by stating that the business was a mobile service business. Like those mechanics that come to service your car in your own driveway.

 

 

[Guest ozzie]

That would make things a lot more affordable to set up a small repair and maint shop for RAAus types. A CASA type workshop is so expensive to set up and maintain not to mention all the time out for CASA audits. hope the system stays simple.

 

Ozzie

 

 

[Guest basscheffers]

On the other hand, running a flying school is strictly for those who need to LOSE money for the taxman.

Losing money means simply that, losing money. There is no such thing as "needing to lose money for the tax man". Unless you are a criminal laundering money, maybe. Depreciation "losses" in one company may temporarily help with cash flow of another, but that's about it.

Secondly, none of the people I know that make a living out of running a flying school have any other companies or tax liabilities that could benefit from what you suggest. They simply make a living, running a flying school!

 

1000 hours work to make $25,000. Even if you could fly 1000 hours per year, it's still a very poor return for what would amount to 2000 hours work.

A normal working year for any person is remarkably close to 2000 hours. And 50 grand not that much less than the average australian wage. Obviously, you'd like to make more than that given it is your business and you are putting everything you own on the line for it. But to suggest it is worse than most small business is plain wrong.Secondly, you are forgetting that between the actual hourly cost and the $50 you pay the instructor, there is probably another $30 gross profit on the aircraft.

 

Yes, in your example of "buy 1 aircraft run your own school", you won't make much at all. As with any business, the money is in the volume. If you can build it to 3 aircraft online doing 1000 hours+ every year each, there is no reason you wouldn't make a good amount of money for yourself.

 

More than most small farmers make in drought anyway.

 

But you have to take it seriously; not "buy a plane and give it a go". And that is where most go wrong. Plan carefully and run your business well; if you just want to instruct but have no interest in running a business, you won't make it. Just like any other industry.

 

 

[Guest Crezzi]

A normal working year for any person is remarkably close to 2000 hours. And 50 grand not that much less than the average australian wage.

I think the OP's point was that 1000 hours of flying time would involve another 1000 hours of non-flying (but still working) time hence a normal working year = $25000 income. I suspect thats not far from the truth.

 

Sure, economies of scale help but if you've got say $300,000 needed for 3 planes you'd get $15,000 at zero risk just leaving it in the bank & doing no work ! If you need to borrow the money (assuming anyone would lend it to you) you'd have to factor the interest payments and, if somebody else buys the planes, the $30 margin you mention goes to them that not the school.

 

Cheers

 

John

 

 

[Guest basscheffers]

John,

 

That was based on 1000 flying hours at 50 bucks, for 2000 total worked, as mentioned by the OP.

 

You are running a pretty poor business if you rent an aircraft for 100 and hour, pay an instructor 50 and get nothing for yourself for it! What pays for running the office then? Plenty of folks who have their a/c on-line are perfectly happy to make enough to break even. My knowledge on this is based on what my aircraft is costing me, how much I rent it out for and how much the school charges for it.

 

As for borrowing money to run your business - well, that's just like any other business. And just like any other business that's starting, no bank is going to loan it to you; you have to use equity you have in your home or find angel investors.

 

I never said it was easy, but as many schools around the country are proving, you can make a living from a flying school.

 

 

[Guest Crezzi]

That was based on 1000 flying hours at 50 bucks, for 2000 total worked, as mentioned by the OP. You are running a pretty poor business if you rent an aircraft for 100 and hour, pay an instructor 50 and get nothing for yourself for it! .

Absolutely - I used the $50 figure from the OP as illustrative. My (& I suspect his) point remains - that for every paid hour of work theres another hour of unpaid work. So whatever the profit margin is per hour of flying time your hourly rate is effectively half that.

 

Cheers

 

John

 

 

[Ed Herring]

Hi Peter

 

Being a Farmer you will be naturely resilient and would be able to tackle what ever occupation you wanted to! If you are in Henty Vic as Baz indicated you need to talk to David McTernan from Sportsflite Australia who operates at Naracoorte and Mt Gambier and he will be able to offer you good advice. Baz is right in telling you that you better get flying tomorrow because the last best time to start was yesterday. Flying opens up a whole new world of opportunity.....! You just need to recognize it when it happens.

 

Best Regards

 

Ed

 

Ed Herring

 

C.F.I. "Goolwa Recreational Flying School"

 

Goolwa SA

 

 

[Powerin]

Hi PeterBeing a Farmer you will be naturely resilient and would be able to tackle what ever occupation you wanted to! If you are in Henty Vic as Baz indicated you need to talk to David McTernan from Sportsflite Australia who operates at Naracoorte and Mt Gambier and he will be able to offer you good advice. Baz is right in telling you that you better get flying tomorrow because the last best time to start was yesterday. Flying opens up a whole new world of opportunity.....! You just need to recognize it when it happens.

Best Regards

 

Ed

 

Ed Herring

 

C.F.I. "Goolwa Recreational Flying School"

 

Goolwa SA

Thanks Ed. Good advice. I want to start flying, but drought also makes money tight...however I'm starting to think another few $1000 on the overdraft for training isn't going to make much difference . The farmer in me is trying to justify spending the money...hence this thread to see if it's possible to (eventually!) get a return on the investment.

 

I'm near Henty NSW, so Wagga Wagga is my nearest RAA friendly airport.

 

Thanks for the other posts here too. Food for thought.

 

Peter

 

 

[Guest check-in]

I do get the concept of the economy of scale. So, $300,000 invested in 3 aircraft, another 30k in a hangar/briefing room, two instructors plus yourself on the payroll, each drawing down $50,000 costs in salary/super/workers comp etc? Even with $30 an hour margin on each aeroplane's true operating cost, you'd surely need to fly 2500-3000 hours a year to justify it. Considering that most RA pilots probably fly less than 50 hours a year that's a big ask.

 

As an aside, today I attended a briefing by John McCormick, boss of CASA. He made the comment that those who were not prepared to invest in decent equipment (such as mode S transponders and modern aircraft) would be better getting out of the light aircraft business now. He was very diplomatic about RA Aus, but made it quite clear that CTA and 40 year old 760 kg aeroplanes were not coming our way soon and we'd better all fit VHF radios and learn how to use them. The implication seemingly is: if you need to ask the price, you can't afford it.

 

So, it seems that it will only become even more diffficult to make a buck at the bottom end of the aviation food chain.

 

But thankfully there are a few good people who love it enough to run RA flying schools anyway.

 

 

[Guest basscheffers]

you'd surely need to fly 2500-3000 hours a year to justify it.

Yup, just like I said! Just did a little spreadsheet and that works out quite well. Although I did buy $80K Jabs rather than $100K aircraft.

One thing though: I don't think anyone puts instructors on the payroll; they just get paid by the flying hour.

 

Considering that most RA pilots probably fly less than 50 hours a year that's a big ask.

Trying to find 60 regular customers is a hard task? With the national average being around 0.4 RA-Aus pilots per 1000 people, but half of those owing their own aircraft, the scenario described above should be achievable in a "catchment area" of 300,000 people. (Forgetting the "build it and they will come" effect as having a good airfield and school available will increase the rate in the local population)

 

So, it seems that it will only become even more diffficult to make a buck at the bottom end of the aviation food chain.

Going out and buying, say, 3 mode-s installations isn't cheap. ($5K each? Nobody actually sells them, so a stab in the dark from me.) But if they are financed with the aircraft of 5-7 years, the extra money is almost inconsequential to your bottom line. And stock 24 rego aircraft all come with a radio, so you are covered there.

 

But thankfully there are a few good people who love it enough to run RA flying schools anyway.

I don't think any of the schools around the Adelaide area are doing it just because they love it and have cash to burn. All of them have to make their living doing it; some seem to be doing quite well. What many of them do depend on, though, is instructors that are willing to work whatever they can get, not at great rates with most having some other form of income.

[Guest check-in]

You have given me food for thought. Despite 24,000 hours and a heap of transport aircraft instruction time (5,000 plus, but still increasing), I have yet to do the RA instructor rating. Intend to get it as soon as I have the time. Then- just maybe - I will find myself a catchment area big enough, trade the Sonex for a 24 rego.......and learn to drink cask wine all over again.......