Captain Jason’s Leaseback Advice:

Discussion in 'Pilot Training' started by Whirlwind, May 4, 2005.

  1. Whirlwind

    Whirlwind Pre-Flight

    Joined:
    Apr 15, 2005
    Messages:
    50
    Display Name:

    Display name:
    Whirlwind
    Re: Lease Back

    First, I want to give a tribute to Ron Levy, for his great checkride advice post. He was the inspiration for this.



    Second, this was written over a year ago, and I’ve updated it a bit. Those of you who have read this before might notice the differences.



    Captain Jason’s Leaseback Advice:



    1. Leasebacks are a business, always treat them like one. Never get emotionally attached to a leaseback airplane, it will get abused just like a rental car does, and you don't go seeking those out when you buy a used car, do you? Put leaseback aircraft in corporations, run their books separately, have a separate tax return for the aircraft each year, etc. Talk to your CPA and lawyer, make sure you understand both the legal and tax issues.



    2. You can make a lot of money with a leaseback. You can lose a lot of money with a leaseback. Many of the factors of making/losing money are completely outside of your control. If your goal in a leaseback is to have someone else pay for your personal airplane, you probably are not going to be happy with the result. If your goal is to defer the cost of your own flying, get your ratings, and perhaps make some money on the side, you can do well if you pick the right FBO/flight school to do business with.



    3. If you leaseback an aircraft to an honest FBO, you have a chance to do well. If you leaseback an aircraft to a crook, you have no chance at all. Get to know with whom you are doing business. Ask around the airport, talk to the other owners, etc. Be careful of any FBO that pushes you to get into this too quickly. The best will be honest and upfront about the risks and will caution you to avoid it if you have doubts. Talk to other owners at the FBO, find out how they have been treated.



    4. You must run the numbers from a realistic viewpoint, remember this is a business. Take what you're paid each hour by the FBO and subtract the per hour costs such as fuel and maintenance reserves (if you don’t, that $15,000 engine is going to surprise you). That figure is your actual hourly income (the rest does not exist for this calculation) Take the monthly fixed costs and divide them by that "true" per hour income. That is the number of hours the aircraft must fly each month to break even. The monthly fixed costs must include insurance, tie-down, and the "payment", even if there is no payment on the aircraft. The cash you might pay for an aircraft has value, if you don't include it in the monthly fixed costs, you're letting the FBO use your money for free. So add in what the payment would be if you had one.



    5. You're still a renter, you just rent one specific aircraft for a reduced rate, but you're still a renter and must schedule your flights along with everyone else. Do you have the right to bump paying customers? If so, how much notice must you give? If you are inclined to "bump" paying customers for your own flying very often, you're probably a poor leaseback candidate. You'll upset those customers and you'll be hurting your own income stream. Find out about renting other airplanes at the FBO for a discounted rate if your plane is down, or otherwise busy. Everything in a leaseback is negotiable, so ask!



    6. The standard leaseback agreement is the basic 80/20 plan. You get 80% of the per hour rental rate, the FBO gets 20%. Out of your 80% you pay fuel, insurance, tie-down, maintenance, and the "payment" for the aircraft (again, this has nothing to do with actually having a bank loan or not, it is the monthly value of the money invested into the airplane). Some FBOs do leasebacks differently, and if you run across one of them, be really sure of what they are offering before you sign on the dotted line.



    7. FBOs like leasebacks because it removes all the risk from them. They get 20% of the rental rate, yet do not have to own or maintain a fleet of airplanes (and sometimes they make money off the maintenance). You absorb all that risk. In exchange for that risk, you have the chance to make some money, and you'll be able to fly for about half the price of renting (or less).



    8. The best leaseback deals are on aircraft that fly a lot of hours each month. A Cessna 172 that flies 80 hours a month will almost always make money. A Piper Arrow that flies 20 hours a month will almost always lose money. The breakeven point on most single engine airplanes is around 50 hours and the leaseback becomes really worth doing from a profit perspective at 65 hours. I know of a case where a Piper Arrow was leased to a flight school and it flew 60 hours over 8 months. The owner lost a lot of money in insurance and maintenance. I also know of a case where a Cessna 172 was leased to a flight school and it flew an average of 87.2 hours a month over a 12-month period, the owner made a fair amount of money that year.



    9. Don’t put a brand new airplane on leaseback, they lose too much value the first few years and are very quickly not new anymore when on a rental line. An example is the 1999 172SP I bought. I paid $124,000 for it with a fresh engine installed. It would cost about $209,000 to buy that plane new, in its current configuration (in 2004). Since even a new plane looks used very quickly on a rental line, I saved $80,000 (or about 1/3 the price) in exchange for having 2,200 hours already on the airframe. Those hours do not affect the rental rate. There is one exception to this rule however, and that is the new 50% bonus tax deduction signed into law by President Bush. If you have a need for a $150,000 tax deduction this year, buying a brand new 172SP for $209,000 does make sense, because of the unusual tax benefits offered by the new law.



    10. Only do a leaseback if you can afford to own the airplane without the leaseback. Used aircraft can be expensive the first few months you own them. Don't expect to take anything home the first six months. People who already have money seem to do well with leasebacks. Those who really cannot afford an airplane in the first place seem to do poorly. These are generalizations of course, but there is an old saw that says it takes money to make money.



    11. Buy the right aircraft, the right way. You can do everything else right, but if you buy the wrong aircraft or pay too much, you'll lose every time. This doesn't mean pick a Cessna 172 over a Piper Warrior, this means pick the right Cessna 172 or Piper Warrior. Some airplanes just shouldn't be leased back. A Mooney or Bonanza are good examples. Very old airplanes often make poor leasebacks as well. The only airplane older than about 25 years I'd leaseback would be a Cessna 150. You want something reliable with a known history. Avoid the very high time and very low time airplanes. Avoid an airplane that hasn’t flown much recently. An airplane that has had 500 hours put on it in the past 10 years will have a lot of things break when the flight school puts 500 hours on it in 6 months. I’ve seen this happen to others and it happened to me with my 172N.



    12. You must sometimes spend money to make money. People want to rent airplanes with nice interiors and good panels. If the per hour rental rate is equal, would you rather fly in a Cessna 172 with ARC radios and no GPS, or a full Garmin panel? The new panel and a new interior might add 20% to the price of the airplane but double your monthly profit.



    13. Look over the past two years records of similar airplanes at the FBO you’re looking at doing business with. Not just the total hours flown, but how much has been spent on maintenance and how much total income there was after all costs. There is no more honest way to see what to expect than to look at the real world figures from existing aircraft on the FBOs rental line. Do not leaseback to anyone who won't show you the records on the existing airplanes and introduce you to the other aircraft owners.



    14. Think long and hard about why you're doing this. Many people get into leasebacks for all the wrong reasons, make sure you're doing it for the right reasons. A leaseback can make sense for some people, it can be a disaster for others. It generally isn't a good way to go about having someone else pay for your own personal airplane, since it will wear faster and not be cared for as well as if it were your own. In addition, you're limited in what you can do with it, given that you still have to schedule it and can’t take it very far without it costing you a lot in lost income. It can however provide you with your ratings, some money, and some low cost flying if managed well.



    15. To sum it up, a leaseback is often used to reduce the cost of flying, sometimes it is used to make money, sometimes it is used as a tax shelter (consult your tax advisor on this one). The months I did a lot of personal flying, I tended to break even, and have lost money a few months, but then if you consider what my flying would have cost otherwise, I came out way ahead. If you can't afford to own regardless of the leaseback income, consider that you're making a serious commitment and while it is very easy to buy a plane, it can be hard to sell one.



    For the record, I had three aircraft on leaseback with two different flight schools at Addison. A 1977 Cessna 172N, a 1999 Cessna 172SP, and a 1997 Schweizer 300CB helicopter. I did well with the older 172 and the helicopter, the 172SP mostly broke even, but I did fly it about 100 hours personally without paying a dime, so it wasn’t too bad. I earned my commercial and CFI license in both airplanes and helicopters, flew almost 500 personal hours between all the aircraft, and came out $36,000 ahead at the end of the day. I sold them once I was done flight instructing, and have since bought a Piper Twin Comanche for my personal use. I considered leasing it back, but choose not to because I want it available to fly whenever I want to go, one thing that isn’t possible with a leaseback.
     
  2. Stache

    Stache Pre-takeoff checklist

    Joined:
    Apr 2, 2005
    Messages:
    380
    Location:
    Yamagata, Japan
    Display Name:

    Display name:
    Stache
    I’m not so sure I would totally agree with number 7 “FBOs like leasebacks because it removes all the risk from them.” Keep in mind the FAR 91 rule Section.403 (a) Owner or operator is primarily responsible for maintaining airworthiness.

    However if a FBO dispatched the aircraft they are considered the operator and can be held responsible as well as the owner. Remember the “OR” part of the rule. There have been a few cases that held the FBO’s accountable for dispatching unairworthy aircraft.

    Just one man’s opinion.
     
  3. Everskyward

    Everskyward Administrator Management Council Member

    Joined:
    Mar 19, 2005
    Messages:
    30,169
    Display Name:

    Display name:
    Everskyward
    I'm wondering if the risk he is talking about is the risk of some unscheduled maintenance which would be an expense for the owner, not the FBO.

    Of course you have a valid point too.
     
  4. Tim

    Tim Line Up and Wait

    Joined:
    Mar 8, 2005
    Messages:
    646
    Location:
    Fairbanks, Alaska
    Display Name:

    Display name:
    Tim
    May 3rd, 2005 09:12 PM

    Well isn't this a fresh one!:no:
     
  5. poadeleted20

    poadeleted20 Deleted

    Joined:
    Apr 8, 2005
    Messages:
    31,266
    Jason's talking financial risk, not regulatory risk. His point is that with the "typical" leaseback contract, it doesn't cost the FBO big money if an expensive AD gets issued -- the owner gets stuck with the bill. In addition, if the plane doesn't fly, the FBO isn't out anything but the owner has to keep paying insurance, tiedown/hangar, annual maintenance, etc., despite having no revenue coming in.
     
  6. planeviz

    planeviz Pre-Flight

    Joined:
    Jan 19, 2012
    Messages:
    47
    Location:
    New York
    Display Name:

    Display name:
    Dave Goodwin
    Great post on leasebacks Captain Jason. I once discussed a "leaseback" for my Warrior with the local flight school and concluded the same thing; it places all financial risk on the airplane owner. In my case, the school proposed a 17%/83% revenue share.

    Pluses

    • A GNS 430W Warrior would probably book 80 hours/month, making it potentially profitable
    • A 15% discount on the shop rate
    • I set the rental rate
    • I could fly it when I wanted to, subject to the schedule and at the cost of billable hobbs time
    Minuses

    • My plane would end up like the bucket of bolts I formerly rented (and was the reason I bought it in the first place)
    • I'd be paying for a CPA, bookkeeping, and an LLC
    • I'd still be writing checks to fix whatever went wrong with it
    • There would always be something wrong with it
    At the end of the day the school would have made 17% of the airplane's revenue hours (plus maintenance fees if I chose to use them) with absolutely zero risk and zero capital investment. Out of my 83% would have come maintenance costs, admin overhead,diminished convenience, and seriously depleted resale value.

    It's a good deal for the school/FBO but I was not convinced it would be a good one for me. As Jason points out though, I can work under the right conditions.
     
    Last edited: Feb 6, 2012
  7. gismo

    gismo Touchdown! Greaser!

    Joined:
    Feb 28, 2005
    Messages:
    12,580
    Location:
    Minneapolis
    Display Name:

    Display name:
    iGismo
    Where's that necropost icon when you need it?
     
  8. steingar

    steingar Touchdown! Greaser!

    Joined:
    Feb 6, 2007
    Messages:
    22,414
    Display Name:

    Display name:
    steingar
    Since this seems active, I considered leasing my 150 when I got the Cherokee. The way the numbers worked out, I'd be breaking even while my airplane got ground into nonexistence. Insurance had gone WAY up on leasebacks (that's how I got the airplane. Its former owner couldn't afford to rent it out anymore).

    That was 5 or 6 years ago. Perhaps things have changed since. I doubt it, though.
     
  9. poadeleted20

    poadeleted20 Deleted

    Joined:
    Apr 8, 2005
    Messages:
    31,266
    I'd rather have necroposts than a whole new thread asking a lot of questions which have already been answered, especially when it attracts a lot of repeat incorrect answers. It's always easier teaching folks who do their research before asking questions.
     
  10. TangoWhiskey

    TangoWhiskey Touchdown! Greaser!

    Joined:
    Feb 23, 2005
    Messages:
    14,191
    Location:
    Fort Worth, TX
    Display Name:

    Display name:
    3Green
    ^^^^ Agreed.

    If a club (group of four owners) leases an aircraft from a private aircraft owner, does the aircraft owner's insurance view that kind of lease any differently than a leaseback to an FBO? If different, is it more favorable or less favorable than an FBO leaseback?

    Does the answer change if the aircraft owner is also part of the club?

    My brain sometimes floats around to trying to find a 182 owner in the area that isn't flying his/her plane as much as he'd like, and would lease it out to a small group / club.
     
  11. TangoWhiskey

    TangoWhiskey Touchdown! Greaser!

    Joined:
    Feb 23, 2005
    Messages:
    14,191
    Location:
    Fort Worth, TX
    Display Name:

    Display name:
    3Green
    I've never understood "paying" an FBO to have them "let me" fly my plane. Yeah, I know, if I'm flying it, they can't get rental revenue from it, but "being able to rent it" is not a "plus for me" in my book. If I ever did a leaseback on an aircraft I owned and ALSO wanted to fly myself, it would have to include language letting me fly it, subject to schedule availability of course (just like other renters, first come first served), wet rate (I buy fuel).
     
  12. weilke

    weilke Final Approach

    Joined:
    Jan 26, 2010
    Messages:
    9,712
    Display Name:

    Display name:
    weilke
    I know of two people who have a 'leaseback fleet' as a side business. They both have a couple of planes each and concentrate on 'value' trainers. Their business model works because:

    - they dont have a bank to feed
    - they have a clear idea what maintenance costs and will gladly disallow offsets if the FBO is trying to milk them.
    - their plane, their terms, their contract. They wont do the deal on the flight schools paper.
    - minimum monthly hours averaged over a several months, so come rain or shine, they get a monthly check for the plane.
    - knowing what to look for, they only buy planes if they can get a good deal on them. They are out there, but they are easier to spot if you have already owned 20 of the type.

    I dont know how their return on the investment is relative to a savings account, but given that the banks give you pretty much 0% on your money at this time, it can't be much worse. Having a legit aviation business does have it's benefits. Any trip to check on the condition of one of your planes is a legit business expense, ditto for training chart subscriptions etc. Once you have a couple of planes, it is also easier to prove to the IRS that you are 'actively engaged' in the business rather than it being a passive investment subject to hobby loss rules etc.

    This of course is a very different model from the usual deal where some unsuspecting student is fleeced by a FBO or flight-school with the promise of a free plane. It is just contrary to the often professed opinion on the interwebs that 'all leasebacks loose money'.
     
  13. weilke

    weilke Final Approach

    Joined:
    Jan 26, 2010
    Messages:
    9,712
    Display Name:

    Display name:
    weilke
    Typically, the lessee (club, school, FBO) provides a level of insurance spelled out in the contract with the lessor being the 'loss payee' and 'additional insured'.

    In your case, the group or virtual partnership would have to haggle out the details with their chosen insurance carrier. A group of 4 would probably still get a private style policy with named pilots etc. From about 5 on up it becomes a commercial FBO style policy that allows for rentals etc.
     
  14. gismo

    gismo Touchdown! Greaser!

    Joined:
    Feb 28, 2005
    Messages:
    12,580
    Location:
    Minneapolis
    Display Name:

    Display name:
    iGismo
    I have no issue with necroposts especially on sticky threads, I just wish they were more obvious.
     
  15. steingar

    steingar Touchdown! Greaser!

    Joined:
    Feb 6, 2007
    Messages:
    22,414
    Display Name:

    Display name:
    steingar
    They seem somewhat less numerous now that Scott has gone tango uniform.
     
  16. n20junkie

    n20junkie Pre-takeoff checklist

    Joined:
    Oct 21, 2005
    Messages:
    428
    Location:
    Grand Island, NY
    Display Name:

    Display name:
    Grant Farmer
    If a leaseback airplane was worth owning, the FBO would just buy their own like every other business does with equipment...........
     
  17. Greg Bockelman

    Greg Bockelman Administrator Management Council Member

    Joined:
    Feb 23, 2005
    Messages:
    8,662
    Location:
    Lee's Summit, MO
    Display Name:

    Display name:
    Greg Bockelman
    Not necessarily. With a leaseback, the FBO doesn't have ITS capital tied up in a depreciating asset.
     
  18. n20junkie

    n20junkie Pre-takeoff checklist

    Joined:
    Oct 21, 2005
    Messages:
    428
    Location:
    Grand Island, NY
    Display Name:

    Display name:
    Grant Farmer
    No they have your capital tied up, along with contracts that you will maintain the asset while they have unlimited use of it.

    If having the depreciating asset was worth renting, they would do it and write off the depreciation.

    But it almost never is. Sure there are exceptions, but usually the person leasing back gets fleeced something aweful.
     
  19. Greg Bockelman

    Greg Bockelman Administrator Management Council Member

    Joined:
    Feb 23, 2005
    Messages:
    8,662
    Location:
    Lee's Summit, MO
    Display Name:

    Display name:
    Greg Bockelman
    Well, Jason made it work for him.
     
  20. poadeleted20

    poadeleted20 Deleted

    Joined:
    Apr 8, 2005
    Messages:
    31,266
    And I made it work for me. But the big problem for the FBO is that most of them don't have any capital to invest, and that's why leasing is their only viable option.
     
  21. flyingron

    flyingron Touchdown! Greaser!

    Joined:
    Jul 31, 2007
    Messages:
    12,200
    Location:
    Catawba, NC
    Display Name:

    Display name:
    FlyingRon
    Good advice, but here's some additional business strategy.

    The key as pointed out is getting a decent number of rental hours in a month.
    The key to doing that is AVAILABILITY. First off, if the plane isn't available it obviously isn't flying. Second, airplanes that are frequently unavailable rapidly become the last ones that people want to reserve/get checked out in/etc,....
    There are two keys to availability. One is making sure you have a handle on maintenance. Get that thing in for it's oil changes/100Hours promptly and scheduled at times when nobody wants to fly it. Don't defer the little stuff until it becomes a problem that can ground the aircraft. Be willing to eat a little ferry time money if that's necessary to accomplish this.

    Second, and this goes back to a number of points above. This plane is a business, NOT YOUR PERSONAL AIRCRAFT. You get in line behind all the paying customers to use it and don't block it out for your own use during peak flying times.

    I've been on both sides of leasebacks over the years (both as an airplane owner and also as an agent of the flying clubs leasing aircraft).
     
  22. steingar

    steingar Touchdown! Greaser!

    Joined:
    Feb 6, 2007
    Messages:
    22,414
    Display Name:

    Display name:
    steingar
    There is another post where one of the participants proudly boasts of a CFIs habit of putting a big bag of snack chips in an airplane and taking it up to altitude which an unsuspecting student. While I applaud creative distractions, I shiver to think about food particles ground into the upholstery and everywhere else. Salty food particles that could promote corrosion if exposed to metal. Thank you no.

    The flying club of my institution participates in competitions using leaseback aircraft, spot landings and so forth. Every time they do the aircraft come down with all sorts of squawks. I hate to think about how hard they're slamming those airplanes to the tarmac. I've never seen such squawks in my aircraft. No way.

    Too damn many clever people who think of other people's airplanes as toys to be used as they see fit. Nobody respects a rental vehicle, nobody. Airplanes aren't cars, they're old, fragile and fairly delicate. No way would I allow an aircraft of mine to go through such depredations. Glad some folks have had goo experiences, but I'll bet for every one of them there are ten people who lost money and had their aircraft trashed.
     
    Last edited: Sep 28, 2012
  23. wabower

    wabower Touchdown! Greaser!

    Joined:
    Sep 1, 2008
    Messages:
    12,017
    Display Name:

    Display name:
    Wayne
    Then why are so many other successful rent/lease companies doing well? The problem isn't the underlying asset, they all depreciate with use. Instead, it's a rental rate that is not adequate to support the economics of the deal. For a number of reasons, airplanes do not command the market rate necessary for the deal to work for the lessor, and never will.

     
  24. Everskyward

    Everskyward Administrator Management Council Member

    Joined:
    Mar 19, 2005
    Messages:
    30,169
    Display Name:

    Display name:
    Everskyward
    Any time you put passengers and food together, which we do all the time, stuff is going to get spilled. Vacuum cleaners work pretty well. The problem I can see is that with a leaseback someone is not cleaning up the airplane after each flight.
     
  25. wabower

    wabower Touchdown! Greaser!

    Joined:
    Sep 1, 2008
    Messages:
    12,017
    Display Name:

    Display name:
    Wayne
    Some pax are amazingly inept/unaware/ambivalent regarding damage to the plane. I saw an exec from a major hotel chain sit with his flow-tip pen held backwards and write/scribble all over the back of light tan leather-covered seat while marking up (editing) a document. Watched (or heard) another sit on a passenger tray table. Roughly half of the chips in any catered lunch will be ground into the carpet. I finally started removing the chips from the boxes before they showed up to board the plane. Totally clueless.

     
  26. Greg Bockelman

    Greg Bockelman Administrator Management Council Member

    Joined:
    Feb 23, 2005
    Messages:
    8,662
    Location:
    Lee's Summit, MO
    Display Name:

    Display name:
    Greg Bockelman
    I never said they weren't. All I was saying is that if it is structured right, in the right market, it can do alright for the owner.
     
  27. wabower

    wabower Touchdown! Greaser!

    Joined:
    Sep 1, 2008
    Messages:
    12,017
    Display Name:

    Display name:
    Wayne
    Assumes facts not in evidence. What rate would be necessary for that to happen? How many times have you ever seen such a rate posted at an FBO? How many pilots would pay it?

     
  28. Anthony

    Anthony Touchdown! Greaser!

    Joined:
    Feb 23, 2005
    Messages:
    18,421
    Display Name:

    Display name:
    Anthony
    It has worked for some as a relatively short term proposition. However, if you want to take your beloved, beautiful baby, and turn it into a pile of iron (actually aluminum) filings, put it on leaseback.
     
  29. jesse

    jesse Administrator Management Council Member

    Joined:
    Oct 2, 2005
    Messages:
    15,348
    Location:
    Lincoln, NE
    Display Name:

    Display name:
    Jesse
    It just takes the right arrangement. I treat the aircraft I instruct in as I would treat them if I owned them, in some cases even better. I teach my students that it's in their best interest to treat the aircraft well -- because if they don't -- the result will be price increases.

    Granted some things in training just are hard on aircraft and that's hard to avoid. But trainer aircraft are built for that and they stand up to it quite well. As long as the owner factors that into their numbers it's not a problem. The engine will most certainly last for more tach hours in a rental arrangement then it would if it were just sitting in a hangar flying twice a month.

    As to purposely causing anything to explode in an airplane in an effort to "test" a student? Not my style. Students create enough distractions and "emergencies" all by themselves.
     
  30. steingar

    steingar Touchdown! Greaser!

    Joined:
    Feb 6, 2007
    Messages:
    22,414
    Display Name:

    Display name:
    steingar
    To counterpoint that, the aircraft is still going to need parts and remanufacture of it's engine at roughly the same interval, since it will reach TBO that much quicker. However, from all accounts you sound like an outstanding CFI, and are inculcating the right attitude. The things I've seen and heard about from CFIs around here chill me to the bone. I wouldn't let any of them set in my aircraft, let alone fly it.

    Some folks like to regale themselves with their own perceived cleverness. One of my fondest hopes for the recently past Yom Kippur is that I am not now and will not become one of them.
     
  31. HerrGruyere

    HerrGruyere Line Up and Wait

    Joined:
    Mar 21, 2012
    Messages:
    720
    Location:
    Middle River, MD
    Display Name:

    Display name:
    Pistol Pete
    What the heck is wrong with people these days? I treat the rental with super respect, because it's probably someone's pride and joy. It really stinks to see someone treat someone's property like junk. I've spent time before my own flights cleaning out the plane so that it looks better. I don't like coming into a plane that has empty water bottles all over the floor. It's just careless and I don't know how people get away with being so careless.
     
  32. flyingron

    flyingron Touchdown! Greaser!

    Joined:
    Jul 31, 2007
    Messages:
    12,200
    Location:
    Catawba, NC
    Display Name:

    Display name:
    FlyingRon
    Eh? Most non-rentals won't make TBO (on hours at least) without work.
    Rentals flown and maintained regularly will often blast through the TBO hour limit still pumping strong.
     
  33. flyingron

    flyingron Touchdown! Greaser!

    Joined:
    Jul 31, 2007
    Messages:
    12,200
    Location:
    Catawba, NC
    Display Name:

    Display name:
    FlyingRon
    I was flying with an instructor and as I started down the runway on takeoff roll he pulled the prop to low RPM then shoved it forward, then pulled it back, etc.... I closed the throttle and asked what the hell he was doing.
    He said he was testing me to see how I would handle unexpected things during takeoff and the fact I aborted was what he expected me to do.

    He did the same thing with my wife. She smacked his hand and told him to leave it alone and continued on. After cleaning up for cruise, she thought about it and inquired if he had wanted her to abort the takeoff. He said, that was what he usually looked for, but since she had realized there was a problem, identified the source of the problem, and corrected the problem, she had behaved appropriately.
     
    LoweDown likes this.
  34. steingar

    steingar Touchdown! Greaser!

    Joined:
    Feb 6, 2007
    Messages:
    22,414
    Display Name:

    Display name:
    steingar
    However, a non-rental will not need work for years on end. A rental will make TBO in a few years if used heavily, which many are. You wind up needing work after a few years either way. Best thing is to own an aircraft and fly it regularly.
     
  35. jpower

    jpower Cleared for Takeoff

    Joined:
    Mar 13, 2012
    Messages:
    1,348
    Location:
    Northern Virginia
    Display Name:

    Display name:
    James
    That's really the key right there. The Eaglets we fly at Chesapeake Sport Pilot are all really nice--the instructors are all really good about everything, right down to always filling the plane up for the guy after you and buckling the seat belts after you leave just so it looks tidy.

    As to whether those super light airplanes will stand the test of time in the training environment, who knows. They're going strong at the moment (though all the Eaglets seem to be needing new engines at the same time--somewhere around 2000hrs methinks for the Rotax, but that's expected). But who knows whether they'll be around 30, 40, 50 years from now like the venerable 150.
     
  36. airheadpenguin

    airheadpenguin Pre-takeoff checklist

    Joined:
    Nov 4, 2012
    Messages:
    427
    Location:
    New Hampshire
    Display Name:

    Display name:
    airheadpenguin
    This is the key, club I'm in now is dramatically cheaper than any of the rental outfits on the field. As a rule we don't take primary students unless they're really close to being done. Everyone is keenly aware that the consequence of beating this plane up is price increases or worse losing the plane and having to go back to the FBOs
     
  37. cirrusmx

    cirrusmx Line Up and Wait

    Joined:
    Dec 20, 2011
    Messages:
    791
    Location:
    Boston, Massachussetts
    Display Name:

    Display name:
    campoalavista
    I would do a leaseback only if i get to pay absolutely zero dollars on the all the airplanes costs, but I would just pay my own gass whenever I would use it. The FBO is already at an advantage by getting to use an expensive asset with zero financial risk exposure. Otherwise, I can just rent and have the same availability as with a leasebacked plane and not tie up my money. Plus, rental planes get a beating good luck with the resale value. Or you might as well extend the FBO a loan and use the interests to fly.
     
  38. pilotx86

    pilotx86 Pre-Flight

    Joined:
    Nov 25, 2011
    Messages:
    95
    Location:
    Earth
    Display Name:

    Display name:
    Marty McMarty
    So after a year of doing a leaseback myself and "making money" mind you, I saw some decent "profit" from a decently run school, I realized that I would do MUCH better freelance instructing out of my plane putting 1/10th of the wear and tear on the plane than leasing back. It's disheartening when you see how much that 20% goes straight to the flight school while you take the rest and yes the checks were great, but then that doesnt account for depreciation, and the general mistreatment the airplane gets as a rental plane.

    Would I do it again? Probably not. Would've rather instructed in my own plane and made more than depreciate the heck out of the plane and pretty much broke even even though I did net a decent "profit."
     
  39. wabower

    wabower Touchdown! Greaser!

    Joined:
    Sep 1, 2008
    Messages:
    12,017
    Display Name:

    Display name:
    Wayne
    Is it safe to assume that your liberal use of quotation marks means you also understand that you don't really know if the venture was profitable because all of the associated costs you mentioned haven't been paid or recognized?

     
  40. pilotx86

    pilotx86 Pre-Flight

    Joined:
    Nov 25, 2011
    Messages:
    95
    Location:
    Earth
    Display Name:

    Display name:
    Marty McMarty

    What I'm getting at is that it appears that you are making money month to month after expenses and all, and yes, you will take home a nice check, but in reality that money that you take home becomes an unrealized loss. If your plane flies a lot, that's great, but considering how much a plane depreciates based on that usage and the extra wear and tear, and the reputation that a high time airframe/engine is a bad thing and further lowers resale value, you're really not making any money.

    I was fortunate enough to be partnered up with a honest flight school and a decent owner at the school. It's just not what it was cut out to be because the real expenses are the ones you don't see until after 1200 hours was put on your airframe and engine.
     
    Last edited: Jan 10, 2013