Airplane partnership - assessing flight costs

[Sac Arrow]

I'm in a partnership (50%) where we each have 50% capital investment in the plane, and we pay for operational costs by billing ourselves a fixed wet rate per Hobbs hour which is deposited in a joint account. If we buy fuel, we deduct it from the charge for the flight. This rate is intended to cover fuel, maintenance, insurance and tie down fees. Maintenance, insurance and tie down fees are paid out of the joint account, and if we fall short we just each throw in half to cover the balance.

Here's my issue with it. There is no incentive for either one of us to run LOP or run with less than full rental power, e.g. it's just like a rental. If I run LOP, my penalty is more time on the Hobbs and more costs. I still do it, but I don't like it. And the Other Guy likes to fly it balls to the walls.

Anybody have a charge model that encourages economy?

 

[frfly172]

Are you both flying about the same amount of hours? Do you have a plan to cover an overhaul? A fixed price per hour dry,with each pilot paying their own fuel,would encourage economy.

 

[flyingron]

Make the rentals dry.

 

[Non Compos Mentis]

How about communicating with your partner?
There are only two of you, and both of you have an interest in making sure the engine lasts as long as possible.

I'm in a partnership that works great. The key? The right partner is far more important than the right airplane.
If you don't trust your partner with your airplane, get out. Today.

 

[rvpjuv20]

Rental fee dry. Has to be filled by pilot after every use back to full. Sounds legit.

 

[jtheune]

I would recommend a dry rate based on tach time to resolve both problems.

 

[willywildes]

Dry rate tach. Fill to tabs, slots whatever.

 

[Sac Arrow]

Are you both flying about the same amount of hours? Do you have a plan to cover an overhaul? A fixed price per hour dry,with each pilot paying their own fuel,would encourage economy.

It goes back and forth. Right now he's putting more hours in. Overhauls will be 50% a piece if not covered by the account. I'm fine with that.

How about communicating with your partner?
There are only two of you, and both of you have an interest in making sure the engine lasts as long as possible.

I'm in a partnership that works great. The key? The right partner is far more important than the right airplane.
If you don't trust your partner with your airplane, get out. Today.

That's not the issue at all, he's a great partner. I just want to consider some ideas with some thought before proposing them.

The thing that is a little bit of a PITA with paying a dry rate is we each have to fill it up to some standard point at the end, which may not work for the next guy. Right now we coordinate and either fill it to the tabs for a short or heavy trip, or to the top for a long trip. A dry rate would make that difficult to account for I think.

How would a tach rate help over Hobbs? FYI it's an Arrow, so it has a CS prop.

 

[rbridges]

Make the rentals dry.

That's whAt I was thinking

 

[ki4lzk]

So just make the tabs the standard point and if the other pilot needs more fuel he can pay for it. I don't see a problem with this.

 

[Bill]

So just make the tabs the standard point and if the other pilot needs more fuel he can pay for it. I don't see a problem with this.

We fly dry, partner returns the plane to the hangar with fuel to the tabs. Simple.

 

[ChemGuy]

I am in my Dakota with 3 other owners. We have a fixed monthly fee for fixed expenses(Annual, insurance, hanger, database, etc) We bill ourselves $30/hr tach, no hobbs in plane , for overhaul. If unscheduled maintenance comes up we split the bill. We have had some starter issues this year and its nice to split the bill 4 ways. For upgrades we talk and vote and then split 4 ways.

We only have FS fuel at our base and the plane is filled after each flight and the owner flying pays for it. It would be the same if it was SS fuel.

This system works very well for us and doesn't penalize one owner for flying more hours, using more fuel, etc like it can if you bill wet, or pay for fixed costs from the hourly rate. YMMV

 

[coma24]

Do you have a fuel totalizer? If so, you could charge a fixed rate for gallons burned, plus the dry rental rate. That way you don't have to fill up after every flight?

 

[weilke]

Anybody have a charge model that encourages economy?

We keep the plane 'at the tabs' and everyone pays for their own fuel. Encourages tankering fuel from cheap locations and flying at a economical speed. The rate that goes into the kitty covers:
- engine overhaul reserve
- historic average per-hour maintenance cost (not including 'basic annual' fee and AD compliance)

The downside of incentivizing people to be frugal with fuel is that if not done right, they can do damage to the engine. So everyone has to agree on a way to run the engine and stick to it. We do have an engine monitor, so everyone else can look at the data to see if someone else is abusing the engine.


Once in a while, someone needs the full payload of the plane and it is desireable to leave the plane with the aux tanks empty. If so, it just gets coordinated of who pays for what fuel. If someone does a max-range trip right from base, they just have the truck come by before they depart to top-off (or they tell the last guy to fill to the tabs, close the ticket and then fill to the top on the other partners account). Coordinating this has really not been an issue. We have this newfangled thing called 'e-mail' and some even have something called 'SMS' on their portable telephone apparatus.

 

[Sac Arrow]

Do you have a fuel totalizer? If so, you could charge a fixed rate for gallons burned, plus the dry rental rate. That way you don't have to fill up after every flight?

No, but that doesn't sound like a bad idea.

 

[MAKG1]

So just make the tabs the standard point and if the other pilot needs more fuel he can pay for it. I don't see a problem with this.

That's how CAP does it.

Well, dry Hobbs. It's close. Tach would work better IMO.

Works pretty well. Aircraft are expected to be filled to the tabs after every flight. If flying light and long, fuel can be loaded to the top.

 

[pj500]

Bill based on TACH hour. It rewards you for not using rental power and warming it up properly.

Replace the gas you use -- better yet fill it up when you're done.

Not filling up when done is allowed if you leave a credit card to replace the gas the next person feels you used.

Covers most use cases. We don't bill maint to cover unexpected items. If they occur we bill and split them. Maint covers annual, batteries, tires, oil, alternator, radio goes out, typical stuff. It's aggressively thin and if a $1,000+ repair comes out, we split the bill.

No engine reserve. Parties agreed to accept depreciated value of the capital investment.

Works for us, may not work for you.

 

[Topper]

I prefer wet rate. I have one plane in a partnership and I think the other two have decided to go to a dry rate. I don't want to fill after every flight. Weight and balance issues, etc. I own my other plane by myself and it is nice to be able to top it off if I know I am going on a trip, and nice to put it away without adding fuel after a long trip.

Just curious how much you think it is costing you extra? I run full power most of the time. If you were my partner and you were planning to always fly for economy, I would agree to pay a higher wet rate than you to avoid going to a dry rate.

Jim

 

[pj500]

I prefer wet rate. I have a plane and I think the other two have decided to go to a dry rate. I don't want to fill after every flight. Weight and balance issues, etc. I own my other plane by myself and it is nice to be able to top it off if I know I am going on a trip, and nice to put it away without adding fuel after a long trip.

Just curious how much you think it is costing you extra? I run full power most of the time. If you were my partner and you were planning to always fly for economy, I would agree to pay a higher wet rate than you to avoid going to a dry rate.

Jim

On a C-172, saves money when doing training ops. Cross country doesn't matter.

On a C-182, saves money when doing sight seeing and you throttle it back to 100-knots. Cross country doesn't matter much.

Different strokes for different folks, but tach more closely resembles maintenance and actual costs.

 

[JHW]

Ask your partner what the half share is worth. If it's too high, sell. Too low, buy.

 

[Terry L in KY]

Here's my issue with it. There is no incentive for either one of us to run LOP or run with less than full rental power, e.g. it's just like a rental.

Anybody have a charge model that encourages economy?

I don't quite get it. Of course there's an incentive....it's YOUR money saved. (and your partners). I'm in a 4 way partnership, and that's the way I (we) see it. We charge ourselves a wet rate by tach time, and typically fill up to tabs to be considerate of the next flyer, but if late, rushed, etc, we may not. Anything we can do to buy cheaper fuel, running properly leaned, etc simply ends up as extra funds for the next maintenance issue.

We have a "fixed" monthly amount to cover hanger, insurance, & basic annual.

You'll either "break even" with your wet rate and have to chip in the extra $$ for the next issue, or if leaned/purchased wisely, have to chip in less.

 

[TUPilot]

Here's my issue with it. There is no incentive for either one of us to run LOP or run with less than full rental power, e.g. it's just like a rental. If I run LOP, my penalty is more time on the Hobbs and more costs. I still do it, but I don't like it. And the Other Guy likes to fly it balls to the walls.

Anybody have a charge model that encourages economy?

Tach time seems like a solution to your problem. When you are running your engine hard, you burn more gas and click of more tach time. When you are doing lazy sightseeing at 2100 RPM your burning less gas and the tach is clicking off more slowly. Thus, you are paying in based on how much gas and "engine time" you use, which better approximates maintenance.

Depending on what we are doing our plane burns 6 to 11 GPH per hobbs hour, which is quite a range. However we typically burn 10 to 11 per tach hour which is a much narrower range. So if you want to accurately reflect fuel burn and use, stick with tach time.

As far as wet vs dry, we have always just communicated well if we want to leave the tanks someplace other than the normal level, and if someone doesn't have a chance to fill up the next person to fly just advises what it cost and they work it out. We like doing it this way because its normally less paperwork to track (fuel receipts, etc) but if wet works for you, try wet tach time.

 

[Sac Arrow]

I prefer wet rate. I have one plane in a partnership and I think the other two have decided to go to a dry rate. I don't want to fill after every flight. Weight and balance issues, etc. I own my other plane by myself and it is nice to be able to top it off if I know I am going on a trip, and nice to put it away without adding fuel after a long trip.

Just curious how much you think it is costing you extra? I run full power most of the time. If you were my partner and you were planning to always fly for economy, I would agree to pay a higher wet rate than you to avoid going to a dry rate.

Jim

To me it's less of an issue with the flight cost delta and more of an issue with having an incentive to make the engine last longer.

Tach time seems like a solution to your problem. When you are running your engine hard, you burn more gas and click of more tach time. When you are doing lazy sightseeing at 2100 RPM your burning less gas and the tach is clicking off more slowly. Thus, you are paying in based on how much gas and "engine time" you use, which better approximates maintenance.

Depending on what we are doing our plane burns 6 to 11 GPH per hobbs hour, which is quite a range. However we typically burn 10 to 11 per tach hour which is a much narrower range. So if you want to accurately reflect fuel burn and use, stick with tach time.

As far as wet vs dry, we have always just communicated well if we want to leave the tanks someplace other than the normal level, and if someone doesn't have a chance to fill up the next person to fly just advises what it cost and they work it out. We like doing it this way because its normally less paperwork to track (fuel receipts, etc) but if wet works for you, try wet tach time.

That might work in a Bo or a Deb but in the Arrow we normally run the engine at 2400 in cruise, and the slowest we might run it is 2300.