Calculating Operating Costs

[LevelWing]

How much do flight schools generally charge per hour over all of the overhead costs in order to make a profit? It would seem that if you take out the profit per hour factor, then you're probably looking at less than $100/hr for a lot of 172s or other similar aircraft (model, year, equipment depending, of course).

 

[wabower]

I don't think that's a viable answer in most cases. Owner just paid $25-35k for the plane, now the shop needs another $20-25k for the O/H. Why would he scrap he plane now to buy another one? Isn't he in for $50-60k no matter what he does? And isn't coming up with the money his biggest problem, especially if he financed the plane?

Some of the planes, it's better to scrap it and invest the overhaul money in another plane. We don't think twice about doing this with a car or truck.

 

[denverpilot]

I've searched both here and the web trying to determine how airplane operating costs are calculated.

Once the bank account is empty, you then know exactly what you started with and divide by hours flown up to that point.

Kidding aside, I think the other answers covered it. You can play games like the one post that said the first hour was the high priced one, and all others are cheaper. You can play games by categorizing it into fixed and variable costs, maintenance/engine "slush funds" pre-paid, whatever...

But the end answer is: Whatever you needed to spend to fly it safely.

 

[LevelWing]

Once the bank account is empty, you then know exactly what you started with and divide by hours flown up to that point.

Kidding aside, I think the other answers covered it. You can play games like the one post that said the first hour was the high priced one, and all others are cheaper. You can play games by categorizing it into fixed and variable costs, maintenance/engine "slush funds" pre-paid, whatever...

But the end answer is: Whatever you needed to spend to fly it safely.

True, but since I'm putting together a plan for a leaseback, I'd like to have a pretty decent guess as to what the maintenance and everything else is going to cost. I want to make sure that the leaseback is actually achieving it's stated goal (furthering my flight training) and not just costing me money. If it's not flying the required hours per month and I'm losing money, it's not doing what I had intended. To determine how many hours a month it needs to fly is why I was looking to get some sort of estimate in addition to whatever I should add on top for the profit factor.

 

[wabower]

Conklin & DeDecker is the largest compiler/reporter of costs in the aviation business. Even they find it difficult to compile their data due to the many different methods used by their clients who operate the airplanes on which they submit information to C&D for their analysis and publication.

Each of their books includes a lengthy disclaimer describing the difficulties and cautioning readers not to rely on them solely for information or planning purposes.

 

[denverpilot]

True, but since I'm putting together a plan for a leaseback, I'd like to have a pretty decent guess as to what the maintenance and everything else is going to cost. I want to make sure that the leaseback is actually achieving it's stated goal (furthering my flight training) and not just costing me money. If it's not flying the required hours per month and I'm losing money, it's not doing what I had intended. To determine how many hours a month it needs to fly is why I was looking to get some sort of estimate in addition to whatever I should add on top for the profit factor.

All it takes is one pilot flying it wrong to destroy an engine and blow all of your estimates straight to Hades. The problem is, they may stretch that all put over time or do it all at once.

 

[LevelWing]

All it takes is one pilot flying it wrong to destroy an engine and blow all of your estimates straight to Hades. The problem is, they may stretch that all put over time or do it all at once.

Understood. There still has to be a way to come up with some general numbers of how many hours the aircraft has to fly a month to even break even (granted this depends on what type of plane and whether or not there is a monthly plane payment). I'm basing this off of a 172 that's less than $50,000 with low SMOH time, at least for rough calculations. I find it difficult to go into a leaseback with the mentality of "let's just see how the first few months ago and come up with an average from there".

I appreciate the answers thus far, though.

 

[denverpilot]

I'm just yanking your chain.

Just start writing down everything you see that costs money to operate an airplane in a spreadsheet. Start with obvious stuff, fuel, oil, oil filters, etc.

Now factor in the engine overhaul/replacement.

Them's your biggest ones right there. The old saw is if you're not liquid enough to replace the engine tomorrow, don't bother. It can happen. Likely? No. But if it does, the airplane is sitting without an engine with nothing coming in to pay the fixed bills.

(Watched three co-owners do that with a 182. It took them three years to decide to sell the airplane to one of the co-owners who then dropped significant money into it to get it airworthy because after sitting there for three years, it had other things go bad including the bladder tanks.)

Find out the going rate for shop labor and then how many hours things take.

Think about all the items on the aircraft that time out. Mags, vacuum pumps, prop, etc. Get prices on those.

Now from there let the mind wander... Oil filters eh, hmm, there's probably an air filter on this thing. How often does that need changed? A little Googling for prices. Other filters? Avionics filters?

Landing lights. They burn out. How often and how much $?

How long until it needs upholstery? New plastic?

This can go on a while. But on an aircraft as simple as a Skyhawk, the numbers can be found. The trick is not to try to convince yourself that only one or two of those things will happen. Plan for worst-case... if this is a business.

Better... Ask someone else with the exact same aircraft on a leaseback or that owns one, if they'll share their numbers with you.

Our aircraft costs significantly more than one of the rental 182s on the field and about the same as another. I suspect the low cost one has maintenance items that aren't getting done that I wouldn't fly.

 

[wabower]

Your caution and reticence re. leasebacks are commendable and well-founded. The transactions are more accurately described as "lose-it-backs" since whatever you project as profit will quickly disappear for one reason or another no matter what your carefully-drawn projections indicate. The stacked-deck house odds in Vegas pale by comparison to the hose jobs routinely administered to aircraft owner/lessors.

Understood. There still has to be a way to come up with some general numbers of how many hours the aircraft has to fly a month to even break even (granted this depends on what type of plane and whether or not there is a monthly plane payment). I'm basing this off of a 172 that's less than $50,000 with low SMOH time, at least for rough calculations. I find it difficult to go into a leaseback with the mentality of "let's just see how the first few months ago and come up with an average from there".

I appreciate the answers thus far, though.

 

[Ken Ibold]

Your caution and reticence re. leasebacks are commendable and well-founded. The transactions are more accurately described as "lose-it-backs" since whatever you project as profit will quickly disappear for one reason or another no matter what your carefully-drawn projections indicate. The stacked-deck house odds in Vegas pale by comparison to the hose jobs routinely administered to aircraft owner/lessors.

Listen to Wayne. I thought on two occasions I'd outsmarted the system, and tried leasebacks. I was wrong both times.

 

[LevelWing]

I'm not trying to get rich off of the leaseback; I only want to be able to pay for the rest of my flight training and offset the cost of recreational flying. If I bought a plane just for personal use right now it would take a lot longer to get the other ratings. I haven't 100% decided that I'm going to do this, still looking into the idea. Based on the numbers I've come up with so far it can work, if it flies a certain amount per month and that's a pretty big "if".

I'd probably look at picking up an older 172L/M/N. They're decent planes and I can upgrade them as necessary. They're also a decent price. I've found several that have low SMOH times, which does increase the price a little but it's well worth it rather than having to shell out $20-30k 200 hours after purchase.

 

[Tony_Scarpelli]

Give me a number, and I can assign a probability to it.

With the probability assigned to the likelihood of the event occurring, I can assign a dollar amount to it.

It ain't rocket surgery.

1%, 10%, 30%, 80%?

Just math.

When your guess (assumptions) are right.

 

[Tony_Scarpelli]

Buy a plane with a timed out engine and overhaul it yourself.

However, you are correct, if you can't pay for an overhaul, maybe you shouldn't own a plane.

While I happen to agree with this, I think most air plane owners would need to finance an engine OH considering they are from $15k, 20-30k or more even on a trainer like Cherokee/172.

 

[wabower]

If you knew how closely your requirements match those of many others who have considered losebacks over the years, you might be amazed at the point-by-point similarities and seemingly rational and reasonable objectives.

If you knew how most of the deals turned out over time, you would immediately put all of your airplane purchase money in a safe deposit box and give somebody else the key until until the fever subsides.

I'm not trying to get rich off of the leaseback; I only want to be able to pay for the rest of my flight training and offset the cost of recreational flying. If I bought a plane just for personal use right now it would take a lot longer to get the other ratings. I haven't 100% decided that I'm going to do this, still looking into the idea. Based on the numbers I've come up with so far it can work, if it flies a certain amount per month and that's a pretty big "if".

I'd probably look at picking up an older 172L/M/N. They're decent planes and I can upgrade them as necessary. They're also a decent price. I've found several that have low SMOH times, which does increase the price a little but it's well worth it rather than having to shell out $20-30k 200 hours after purchase.

 

[Tony_Scarpelli]

Understood. There still has to be a way to come up with some general numbers of how many hours the aircraft has to fly a month to even break even (granted this depends on what type of plane and whether or not there is a monthly plane payment). I'm basing this off of a 172 that's less than $50,000 with low SMOH time, at least for rough calculations. I find it difficult to go into a leaseback with the mentality of "let's just see how the first few months ago and come up with an average from there".

I appreciate the answers thus far, though.

There are many owners of airplanes who list their airplane for lease with the local fbo. They are not looking to make a profit, only to reduce their costs.

Supply and demand works against someone wanting to make free cash flow in aviation today.

Never has the saying been more true: "If you want to make a small fortune in Aviation, start with a large fortune."

If you are serious in your inquiry then you need to post what airport you plane to work out of. Costs in Los Angeles are different than in Wichita.

 

[LevelWing]

If you knew how closely your requirements match those of many others who have considered losebacks over the years, you might be amazed at the point-by-point similarities and seemingly rational and reasonable objectives.

If you knew how most of the deals turned out over time, you would immediately put all of your airplane purchase money in a safe deposit box and give somebody else the key until until the fever subsides.

If this is true, then what would you recommend I do instead? I really do think that renting and trying to get additional ratings is going to be a lot more expensive. I could buy a small Cherokee 140/180 but in the short run that wouldn't save anything since now I have a monthly plane payment plus the instructor fees (and maintenance, etc. all on my own dime instead of through a leaseback).

There are many owners of airplanes who list their airplane for lease with the local fbo. They are not looking to make a profit, only to reduce their costs.

Supply and demand works against someone wanting to make free cash flow in aviation today.

Never has the saying been more true: "If you want to make a small fortune in Aviation, start with a large fortune."

If you are serious in your inquiry then you need to post what airport you plane to work out of. Costs in Los Angeles are different than in Wichita.

I'm not going to purchase a plane and then find an airport who is willing to use the leaseback. I would find the airport first, have them sign a letter of intent (not a binding contract) of the terms that we agreed to and then present that along with the business plan to a lending institution in order to purchase the plane. The only thing the letter of intent would state is how much per hour the plane would cost to rent and other terms such as any reduced maintenance fees if I use the FBO's maintenance shop, etc. Obviously they aren't going to sign anything guaranteeing anything to do with how much it flies per month as that's not really possible (weather, maintenance, students not flying that month, etc.).

The idea is to have everything setup so that when the FBO/flight school takes delivery of the plane it's in the air within a few days instead of having bought a plane and now I'm trying to find a place that will use it and then possibly running into issues of not being able to agree to the terms. I have some loose numbers already calculated as to if the plane flies 40 hours per month, versus 60 or 80 and how much would get set aside out of that for the plane payment, maintenance, insurance, etc. Whatever is left over at the end of the month I could use for additional flight training or recreational flying, if the plane is available (I'm not going to bump others so I can use the plane -- that defeats the purpose).

 

[douglas393]

I'm not trying to get rich off of the leaseback; I only want to be able to pay for the rest of my flight training and offset the cost of recreational flying. If I bought a plane just for personal use right now it would take a lot longer to get the other ratings. I haven't 100% decided that I'm going to do this, still looking into the idea. Based on the numbers I've come up with so far it can work, if it flies a certain amount per month and that's a pretty big "if".

I'd probably look at picking up an older 172L/M/N. They're decent planes and I can upgrade them as necessary. They're also a decent price. I've found several that have low SMOH times, which does increase the price a little but it's well worth it rather than having to shell out $20-30k 200 hours after purchase.

When I first was looking to purchase a 182 I considered leaseback to my local school(and they were itching to have it with what I thought was a pretty generous offer)for about 3 seconds. What made me decide not to was the condition of the five year old 182 I looked at and the condition of the 5 year old 172 I was training in. The 172 looked awful, whereas the 182 looked almost in pristine condition. The resale value at the end of the day was going to reflect this. To me it was a losing proposition for me, and a winning proposition for the flight school. I personally know the owners of the planes on leaseback and they have asked me numerous times to invest in their planes. I have decided I have more inventive ways of wasting my money.

 

[wabower]

I think you must realistically reassess the risks of such a deal, including the most important aspect that hasn't been discussed so far. If you borrow money for this deal, the lender will expect to be paid on a regular basis. If rents are insufficient or nonexistent, the only source for the payment is your checkbook.

Let's say you proceed with your plan and a renter loses control and has a minor prop strike during the second month on the line. How long will the plane be down? How much rent money will you lose? Will it ever be recovered or recoverable during you ownership of the plane? How about a cracked case? Or a spalled cam? If/when this happens, what impact will that have on your training? What are you going to fly while your plane is down? Who will repair your plane? Will the FBO or school expect you to contract repairs through their MX shop, or will you assume responsibility to do it yourself? Are you in position to do so?



such a deal in light of the

If this is true, then what would you recommend I do instead? I really do think that renting and trying to get additional ratings is going to be a lot more expensive. I could buy a small Cherokee 140/180 but in the short run that wouldn't save anything since now I have a monthly plane payment plus the instructor fees (and maintenance, etc. all on my own dime instead of through a leaseback).

I'm not going to purchase a plane and then find an airport who is willing to use the leaseback. I would find the airport first, have them sign a letter of intent (not a binding contract) of the terms that we agreed to and then present that along with the business plan to a lending institution in order to purchase the plane. The only thing the letter of intent would state is how much per hour the plane would cost to rent and other terms such as any reduced maintenance fees if I use the FBO's maintenance shop, etc. Obviously they aren't going to sign anything guaranteeing anything to do with how much it flies per month as that's not really possible (weather, maintenance, students not flying that month, etc.).

The idea is to have everything setup so that when the FBO/flight school takes delivery of the plane it's in the air within a few days instead of having bought a plane and now I'm trying to find a place that will use it and then possibly running into issues of not being able to agree to the terms. I have some loose numbers already calculated as to if the plane flies 40 hours per month, versus 60 or 80 and how much would get set aside out of that for the plane payment, maintenance, insurance, etc. Whatever is left over at the end of the month I could use for additional flight training or recreational flying, if the plane is available (I'm not going to bump others so I can use the plane -- that defeats the purpose).

 

[JHW]

While I happen to agree with this, I think most air plane owners would need to finance an engine OH considering they are from $15k, 20-30k or more even on a trainer like Cherokee/172.

I did my O-360's for a little over 12K per side including sending out all the machine work. That said, I spent most of a winter doing it and I had a spare engine bought and sitting the garage before I ever opened them up, in case I found something unexpected.

 

[JHW]

If this is true, then what would you recommend I do instead? I really do think that renting and trying to get additional ratings is going to be a lot more expensive. I could buy a small Cherokee 140/180 but in the short run that wouldn't save anything since now I have a monthly plane payment plus the instructor fees (and maintenance, etc. all on my own dime instead of through a leaseback).

Just buy the plane and fly it. You are out of pocket for all the normal repairs anyway by the time it's all tallied up. If you construct the most successful leaseback maintenance agreement I've ever seen, the FBO income will cover the repairs on the extra things that get broken on a rental vs operating it only yourself. Meantime you'll be money ahead on both repairs and insurance premiums by keeping it a strictly personal plane.

Just remember, if operating that plane as a rental in that location was viable, the FBO would buy it themselves. Since it isn't a viable business proposition the FBO needs a charitable-minded investor to shoulder some of the burden. I know several people who do this as a means of subsidizing flight training in their local area. All of them acknowledge losing money (willingly) on the leaseback. That doesn't sound like you at this stage in your career.

 

[ronnieh]

Level, I have no dog in this hunt. But, PLEASE listen to Wayne, PM him if you need to. He is simply trying to save you a lot of heart ache. Small plane lease back (trainers) seldom work out for the aircraft owners. Flying is expensive, no way around it. Bad decisions can make it real expensive.

 

[JHW]

Level, I have no dog in this hunt. But, PLEASE listen to Wayne, PM him if you need to. He is simply trying to save you a lot of heart ache. Small plane lease back (trainers) seldom work out for the aircraft owners. Flying is expensive, no way around it. Bad decisions can make it real expensive.

OTOH one way to reduce the cost is when you are in the right place at the right time to buy the broken plane from the broken lease-back owner for a song. I own half a citabria that we got into for less than 15K after we bought and repaired it post-leaseback.

 

[LevelWing]

Assuming for a moment that I decided to purchase a plane just for personal use rather than for a leaseback (in which case I wouldn't get a 172), the same thinking still applies as far as maintenance. I still have to pay for the annual (at least there wouldn't be a 100 hour) and I would still have to pay for the OH when it came time -- but all on my own dime. Plus I would still have to pay an instructor for the other ratings. I suppose in the end it's still cheaper by the hour to do it this way?

I looked into the insurance and it would drop significantly (for obvious reasons). What is the usual financing term for a personal plane? Also, in terms of MOGAS, are we talking like regular 87 octane from the local gas station? That would save a lot of money on fuel as well (assuming the plane can take MOGAS). For reference, I would like a Cherokee 140/180, perhaps a Warrior.

 

[wabower]

With no presumed revenue your airplane budget will be much simpler and the affordability will be apparent. If it breaks and you can't fix it immediately, your ongoing fixed costs and debt service will continue but you will have control of the source and timing of the repairs and be in position to call your own shots. Savings from use of avgas can be significant if you fly a lot, but even better if you can buy it where you're based, and lower insurance costs offer similar benefits. You will be more careful about flat-spotting tires, dragging brakes, leaning, proper engine operation and other controllable operating factors.

Nobody else will be nearly as careful about preserving the cosmetics and appearance of the plane as you will, including wiping off bugs, being careful with the windshield, closing the door with normal force rather than a mighty yank, taking care of seat mechanism, controls, vents, etc.

Assuming for a moment that I decided to purchase a plane just for personal use rather than for a leaseback (in which case I wouldn't get a 172), the same thinking still applies as far as maintenance. I still have to pay for the annual (at least there wouldn't be a 100 hour) and I would still have to pay for the OH when it came time -- but all on my own dime. Plus I would still have to pay an instructor for the other ratings. I suppose in the end it's still cheaper by the hour to do it this way?

I looked into the insurance and it would drop significantly (for obvious reasons). What is the usual financing term for a personal plane? Also, in terms of MOGAS, are we talking like regular 87 octane from the local gas station? That would save a lot of money on fuel as well (assuming the plane can take MOGAS). For reference, I would like a Cherokee 140/180, perhaps a Warrior.

 

[Ken Ibold]

If this is true, then what would you recommend I do instead? I really do think that renting and trying to get additional ratings is going to be a lot more expensive. I could buy a small Cherokee 140/180 but in the short run that wouldn't save anything since now I have a monthly plane payment plus the instructor fees (and maintenance, etc. all on my own dime instead of through a leaseback).

I'm not going to purchase a plane and then find an airport who is willing to use the leaseback. I would find the airport first, have them sign a letter of intent (not a binding contract) of the terms that we agreed to and then present that along with the business plan to a lending institution in order to purchase the plane. The only thing the letter of intent would state is how much per hour the plane would cost to rent and other terms such as any reduced maintenance fees if I use the FBO's maintenance shop, etc. Obviously they aren't going to sign anything guaranteeing anything to do with how much it flies per month as that's not really possible (weather, maintenance, students not flying that month, etc.).

The idea is to have everything setup so that when the FBO/flight school takes delivery of the plane it's in the air within a few days instead of having bought a plane and now I'm trying to find a place that will use it and then possibly running into issues of not being able to agree to the terms. I have some loose numbers already calculated as to if the plane flies 40 hours per month, versus 60 or 80 and how much would get set aside out of that for the plane payment, maintenance, insurance, etc. Whatever is left over at the end of the month I could use for additional flight training or recreational flying, if the plane is available (I'm not going to bump others so I can use the plane -- that defeats the purpose).

OK, fair enough. I will not lecture you on it, as you need to convince yourself one way or the other. I will add a couple of items to your list of things to consider, which you may or may not already have thought of.

1) Did you price commercial insurance? You may find that the first 15-20 hours PER MONTH go straight to paying the difference between commercial and personal insurance. Just how much the insurance will cost will depend to some extent on the claims history of the place handling the leaseback.
2) Did you account for paying the FBO their 10% or 20% commission off the top?
3) Did you account for downtime due to regular maintenance, 100 hour inspections etc? Many times if the shop is backed up, your airplane will sit while the transient pilot is accommodated.
4) How many tires did you budget per year? Quadruple it.
5) Even 40 hours per month is a lot of wear and tear on the interior. Did you budget $10,000 every four to five years? If not, what happens when someone puts a nicer airplane on the line and your interior is ratty?
6) Did you account for down time for weather, annual inspections etc?
7) Remember that ALL costs are borne by you. Databases, dings, avionics, and other repairs. Avionics are not terribly reliable, and they can smack you almost as hard as engine issues.
8) Look at the other airplanes on the line. Are they trashed? Are they pristine? If they're trashed, it may mean the operator doesn't give a crap, the renters are careless, or the number of hours flown is inadequate. If they are pristine, well, it takes money to keep them that way, and you will need to compete with those pristine versions.
9) Ask about the fleet turnover. At most places you find about a 2 year cycle, which is how long it takes the discouraged leaseback owner to absorb the first year's losses and find a buyer for the airplane.

 

[Ken Ibold]

I looked into the insurance and it would drop significantly (for obvious reasons). What is the usual financing term for a personal plane? Also, in terms of MOGAS, are we talking like regular 87 octane from the local gas station? That would save a lot of money on fuel as well (assuming the plane can take MOGAS). For reference, I would like a Cherokee 140/180, perhaps a Warrior.

There are lenders who will go 15-20 years on aircraft. RESIST THE URGE! Once upon a time people rationalized such long terms as being justified given the price appreciation used airplanes often saw. These days, I would not finance an airplane at all, or if you do, then go no longer than 5-7 years. Another popular financing move is a 5-year note amortized over 30 years but with a balloon at payment #60. This is reminiscent of the thinking that led to the housing meltdown.

As for mogas, the STCs for 150 hp or less are OK with regular unleaded, but for 160 or more you need to use premium, and you have to get it without ethanol added. That may mean buying it from a marina or something, where the price will be higher than at the local gas station. There are also the logistics of hauling it and storing it. If you store it in your T-hangar, the local fire marshal and the landlord may have a problem with that.

 

[JimG.]

With no presumed revenue your airplane budget will be much simpler and the affordability will be apparent. If it breaks and you can't fix it immediately, your ongoing fixed costs and debt service will continue but you will have control of the source and timing of the repairs and be in position to call your own shots. Savings from use of avgas can be significant if you fly a lot, but even better if you can buy it where you're based, and lower insurance costs offer similar benefits. You will be more careful about flat-spotting tires, dragging brakes, leaning, proper engine operation and other controllable operating factors.

Nobody else will be nearly as careful about preserving the cosmetics and appearance of the plane as you will, including wiping off bugs, being careful with the windshield, closing the door with normal force rather than a mighty yank, taking care of seat mechanism, controls, vents, etc.

No truer words were ever written…

There are 2 things I never share/shared.

The left seat of my airplanes, and my wife.

I unwittingly had a bad experience with the 2nd scenario in my previous administration and it was very expensive.

I assumed it would be the same with the 1st.

 

[wabower]

There are lenders who will go 15-20 years on aircraft. RESIST THE URGE! Once upon a time people rationalized such long terms as being justified given the price appreciation used airplanes often saw. These days, I would not finance an airplane at all, or if you do, then go no longer than 5-7 years. Another popular financing move is a 5-year note amortized over 30 years but with a balloon at payment #60. This is reminiscent of the thinking that led to the housing meltdown.

All true, especially the caps.

If you haven't done it before you should understand that the lender considers the loan as a credit loan rather than an asset-based-loan (ABL) and you will be fully liable for repayment without respect to whatever might happen to the plane.

Prior to the '08 crash a couple of lenders provided ABL's but required 40% down payment. Those lenders are no longer in business and the ABL days are now gone, probably forever.

 

[JoseCuervo]

When your guess (assumptions) are right.

Something tells me you don't understand probabilities.

 

[Dr. O]

been flying and owning planes for over half century. I have learned a small amount in that time.
it is essentially impossible to pay for a plane on a leaseback/rental setup.
my local FBO rents an old 172 he inherited from his dad. he does all his own work on it - engine to paint. renters have to have own liability insurance to rent it as he cannot make ins payments and stay in business.
it is the only way he can cover his costs and maybe have a few dollars left.
if he can barely cover his costs with zero payments and doing his own maintenance what chance does someone paying a loan and shop rates have?

 

[ronnieh]

Level, I feel for you. You come on this board and ask a couple of legitimate questions. Your questions for the most part have been ignored. I too chimed in with my $.02 worth.

This is a tough place at times but, there are several people (myself included) that have been where you are. In a previous century I too fell for the lease back. In fact I bought my instructor's airplane and leased it back to his FBO. He then bought a new 152, first year they were introduced. Guess whose plane was used for touch and goes, initial solo, soft field and short field take offs? Guess whose plane was used for cross country?

There are people here that can and perhaps will help you with coming up with a budget. Perhaps by PM or direct email would be better for that.

What you are running into is the large amount of experience in this situation. Many of us, especially us that have been messing with these contraptions for 35+ years, know most of the things that don't work. The chances of a leaseback of a training aircraft reducing your cost of training and recreational flying is almost zero. The chances of it actually increasing your hourly costs is close to 100%. It just is what it is. This does not take into account the headaches.

To repeat myself flying is expensive, it can be very expensive. We all wish you the best of luck.

 

[LevelWing]

Level, I feel for you. You come on this board and ask a couple of legitimate questions. Your questions for the most part have been ignored. I too chimed in with my $.02 worth.

This is a tough place at times but, there are several people (myself included) that have been where you are. In a previous century I too fell for the lease back. In fact I bought my instructor's airplane and leased it back to his FBO. He then bought a new 152, first year they were introduced. Guess whose plane was used for touch and goes, initial solo, soft field and short field take offs? Guess whose plane was used for cross country?

There are people here that can and perhaps will help you with coming up with a budget. Perhaps by PM or direct email would be better for that.

What you are running into is the large amount of experience in this situation. Many of us, especially us that have been messing with these contraptions for 35+ years, know most of the things that don't work. The chances of a leaseback of a training aircraft reducing your cost of training and recreational flying is almost zero. The chances of it actually increasing your hourly costs is close to 100%. It just is what it is. This does not take into account the headaches.

To repeat myself flying is expensive, it can be very expensive. We all wish you the best of luck.

I definitely appreciate the feedback, positive or negative. This was all part of my research; I wasn't set on doing the leaseback. That being said, if I was going to purchase an airplane for personal use, what should I look for? I really like the Cherkoee 140/180 or the Warriors, given that they are relatively cheap to operate and take MOGAS.

In the end I'm looking to make my cost per flying hour less, while at the same time being able to continue my flight training. If it's actually cheaper to operate a plane privately vs. with a leaseback, then I'm more than willing to look at it.

 

[wabower]

I definitely appreciate the feedback, positive or negative. This was all part of my research; I wasn't set on doing the leaseback. That being said, if I was going to purchase an airplane for personal use, what should I look for? I really like the Cherkoee 140/180 or the Warriors, given that they are relatively cheap to operate and take MOGAS.

In the end I'm looking to make my cost per flying hour less, while at the same time being able to continue my flight training. If it's actually cheaper to operate a plane privately vs. with a leaseback, then I'm more than willing to look at it.

I think you'll find that to be the case, which doesn't mean you can't lease some time to other users to defray some of the costs. It simply means you have much tighter control over who uses your plane and when as well as how it's maintained.

 

[denverpilot]

I'm not trying to get rich off of the leaseback; I only want to be able to pay for the rest of my flight training and offset the cost of recreational flying.

If you need ratings, buy ratings. If you need an airplane, buy an airplane. The two aren't really related.

A leaseback run as anything but a business is even further unrelated.

Think about it. If a flight school can't run their business without using other people's capital expenditures, why would you want to be their banker with your collateral on the line?

 

[ronnieh]

Let me add another $.02. Your realistic mission requirements will need to be known. What training are you doing, PP? Are you going to be instrument rated in the near future. What kind of flying are you REALLY going to do. Where are you located? $100 hamburgers or do you want to eventually be able to do some reasonable trips, how many people and so on.
There are people on this board that can help you with this and give you some reasonable suggestions. You will just have to be able to sift through the BS and pick a few that have the experience to give you guidance.

They will be along or perhaps a new thread discussing some of the options and realistic costs of ownership. The Pipers you mentioned certainly worth a look as are several other fixed gear four place.

 

[Tony_Scarpelli]

Something tells me you don't understand probabilities.

Something tells me you are new to aviation and have no real clue as to where to find accurate stats on engine failures, maintenance and events required to do this.

Math is the easy part sport.


Avoiding "garbage in garbage out" is the problem.

I am sure you could come with some pretty spread sheet, I just do not think it will have any relationship to reality. and none of your posts have shown that you have any particular expertise in this area (aviation).

 

[wabower]

If you find yourself in the airplane business you'll hear some version of this story almost every week, sometimes almost every day.

I have concluded that the underlying reason people are inclined to think that lose-backs might make sense is that we are preconditioned to think that owners enjoy some financial advantages over renters, although nobody seems to be exactly sure how they occur.

Once that myth is dispelled and everybody understands the only advantage to ownership is access to the plane when they want to use it, the conversations become more focused and the pie-in-the-sky benefits are no longer an issue.

 

[vintage cessna]

If you find yourself in the airplane business you'll hear some version of this story almost every week, sometimes almost every day.

I have concluded that the underlying reason people are inclined to think that lose-backs might make sense is that we are preconditioned to think that owners enjoy some financial advantages over renters, although nobody seems to be exactly sure how they occur.

Once that myth is dispelled and everybody understands the only advantage to ownership is access to the plane when they want to use it, the conversations become more focused and the pie-in-the-sky benefits are no longer an issue.

I have no doubt that many lease backs become lose backs. If a successful lease back is defined as the owner recouping his investment in five years or less, then I know of some success stories, but they are all in the LSA category .

 

[wabower]

Can you outline the basic parameters that makes this possible?

I have no doubt that many lease backs become lose backs. If a successful lease back is defined as the owner recouping his investment in five years or less, then I know of some success stories, but they are all in the LSA category .

 

[vintage cessna]

Can you outline the basic parameters that makes this possible?

Sure.

Owner has income taxed at the top Federal rate and lives in a state with an income tax.

New plane acquisition costs are less than 150 K.

Owner pays cash.

Airplane is located in an area with high per capita income.