Fractional Lease Cirrus SR22 at Fort Worth

WOEAircraft

WOEAircraft

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Wings of Eagles
Wings of Eagles is leasing shares on a 2003 Cirrus SR22 starting early 2014 at Alliance Fort Worth (AFW). The estimated price for 75 flight hours a year is $48,000 Lease fee (in 4 years you receive up to 55% back). See the website for more information; woeaircraft.com or email woe.eagles@gmail.com
 
WOEAircraft said:
Wings of Eagles is leasing shares on a 2003 Cirrus SR22 starting early 2014 at Alliance Fort Worth (AFW). The estimated price for 75 flight hours a year is $48,000 Lease fee (in 4 years you receive up to 55% back). See the website for more information; woeaircraft.com or email woe.eagles@gmail.com
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So is it a dry lease for $640 per hour in 75 hour blocks or a fractional ownership? If the later what fraction?
 
Alexb2000 said:
So is it a dry lease for $640 per hour in 75 hour blocks or a fractional ownership? If the later what fraction?
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Wondering if the $48k covers all four years in which case a much more reasonable $160/hour dry. And then recovery at resale.

edit: they also mention a monthly fee on the site. How much is that?

Ps, rather unfortunate name - Woe Aircraft :confused:
 
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And what happens if one shareholder racks up more than 75 hours in a year?

Is it like a car (f)lease where more money is owed?
 
Their website shows can do shares from 50hrs/yr to 200hrs/yr. Buyin doesnt seem bad, but the various fees look to add up quick.
 
It's a fractional Lease 1/7 for 75 flight hours per year. The program fee (~$48,000) covers the four years and then you can get up to 55% percent of that back. You pay for fuel just like if you owned the plane and the monthlu fixed fee covers maintenance both scheduled and reserve, insurance, cleaning and subscriptions. If you need more flight hours in a year then you would increase the share amount by paying the difference of the new share amount and the new fixed monthly fee.

Remember you are getting a $200,000 airplane for around ($48,000). It is also fast and by default burns more fuel so it will have a higher per hour cost than a Cessna. There is no profit made from the hourly fee.

Let me know what other questions you have by email. woe.eagles@gmail.com
 
I'm either missing something (quite possible) or this sounds like a terrible deal...
 
$160 an hour dry, plus additional fixed fees seems like a lot of money for this plane, doesn't it???
 
dweyant said:
I'm either missing something (quite possible) or this sounds like a terrible deal...
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Considering they are leasing a 2003, it sure seems awfully high to me. $48,000 plus fees and no guarantee of the amount to get back at 4 years. It says MAY get up to 55% back. Those 7 people will have a total combined of $336,000 into a $200,000 plane according to the figures above, and thats before the monthly costs.
 
If you look around other companies are offering fractional shares of Cirrus SR22 for $200,000 buy in plus monthly fees. Granted that is for a 2013 model. We are trying to make flying the Cirrus Affordable. We chose the 2003 becasue it is the first year they installed all glass instruments.
 
I just did a quick web search to look up the hourly rate of some SR22s. The cheapest was $258 per hour and they go up from there. I saw up to $345. So we are in line if not on the cheaper side of hourly rates. Really though this is a lease and not an hourly rental program.
 
WOEAircraft said:
If you look around other companies are offering fractional shares of Cirrus SR22 for $200,000 buy in plus monthly fees. Granted that is for a 2013 model. We are trying to make flying the Cirrus Affordable. We chose the 2003 becasue it is the first year they installed all glass instruments.
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I've looked at the other local model and I understand it.

Perhaps I just don't understand, so explain a couple things to me:
1) We're tossing around a $200K airplane for a total lease fee of $336k ($48k * 7 lessees). What happens to the incremental $136k? Do you already own an SR22 or is this conceptual at this point?
2) What is the monthly fee to cover hangar, subscriptions, and your management? Assume I'm leasing a 1/7th share.
3) Who is at risk for maintenance on the plane?
4) 7 owners * 75 hours per year * 4 years = 2100 total hours. While everyone might not fly their total purchased hours, how is the inevitable engine overhaul handled?
5) is that 75 hours on hobbs or tach time?
6) How is the residual value determined? You say up to 55%- what factors determine the residual value?
7) How is title held? Is it owned by your company and then shares leased? Are the lessees the only permitted users of the plane (i.e. no rentals)? Do you envision flying the plane yourself for any purpose outside management of the plane?
 
smccray said:
I've looked at the other local model and I understand it.

Perhaps I just don't understand, so explain a couple things to me:
1) We're tossing around a $200K airplane for a total lease fee of $336k ($48k * 7 lessees). What happens to the incremental $136k? Do you already own an SR22 or is this conceptual at this point?
2) What is the monthly fee to cover hangar, subscriptions, and your management? Assume I'm leasing a 1/7th share.
3) Who is at risk for maintenance on the plane?
4) 7 owners * 75 hours per year * 4 years = 2100 total hours. While everyone might not fly their total purchased hours, how is the inevitable engine overhaul handled?
5) is that 75 hours on hobbs or tach time?
6) How is the residual value determined? You say up to 55%- what factors determine the residual value?
7) How is title held? Is it owned by your company and then shares leased? Are the lessees the only permitted users of the plane (i.e. no rentals)? Do you envision flying the plane yourself for any purpose outside management of the plane?
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$136k=4 year management fee. That's $34k a year, sounds typical but hardly worth it unless you were managing 4+ planes at the same deal.
 
SMCCRAY,
Good Questions.
1A. The money left over from selling shares is for; the maintenance reserve, to invest and repay the share owners after the 4 year term, to reinvest in the business and this is a for profit business so some will also be used for profit.
1B. We are looking to purchase the first in the fleet in late May 2014.
2. The monthly Fee for hangar, maintenance (both scheduled and unscheduled), Insurance, Subscriptions, cleaning and management is around $1400 for 1/7 (75 flight hours per year).
3. Wings of Eagles will schedule and pay for all maintenance both scheduled and unscheduled.
4. Wings of Eagles pays for engine overhaul.
5. This is a lease not a rental so the 75 allotted hours will be tach time.
6. The residual value is determined by the fair market value agreed upon by the participant and Wings of Eagles. If we can not agree then we will select an Accredited Senior Appraiser to conduct a desktop appraisal and the participant will be paid back based upon the evaluation. This is in the contract and therefore protects the participant and Wings of Eagles. You will get a fair buyback price.
7A. This program is a part 91 lease and Wings of Eagles will hold the title. The participants/Lessees are the only pilots authorized to fly the plane and there will be no renting the plane out.
7B. I intend to fly the plane for management purposes and for some coincidental personal use. I will be a participant as well and will lease a small share (less than 1/7 share).
 
WOEAircraft said:
SMCCRAY,
Good Questions.
1A. The money left over from selling shares is for; the maintenance reserve, to invest and repay the share owners after the 4 year term, to reinvest in the business and this is a for profit business so some will also be used for profit.
1B. We are looking to purchase the first in the fleet in late May 2014.
2. The monthly Fee for hangar, maintenance (both scheduled and unscheduled), Insurance, Subscriptions, cleaning and management is around $1400 for 1/7 (75 flight hours per year).
3. Wings of Eagles will schedule and pay for all maintenance both scheduled and unscheduled.
4. Wings of Eagles pays for engine overhaul.
5. This is a lease not a rental so the 75 allotted hours will be tach time.
6. The residual value is determined by the fair market value agreed upon by the participant and Wings of Eagles. If we can not agree then we will select an Accredited Senior Appraiser to conduct a desktop appraisal and the participant will be paid back based upon the evaluation. This is in the contract and therefore protects the participant and Wings of Eagles. You will get a fair buyback price.
7A. This program is a part 91 lease and Wings of Eagles will hold the title. The participants/Lessees are the only pilots authorized to fly the plane and there will be no renting the plane out.
7B. I intend to fly the plane for management purposes and for some coincidental personal use. I will be a participant as well and will lease a small share (less than 1/7 share).
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So help me out with the math here-

45% * $48k = $21.6k in actual paid lease dollars that are gone (assuming the max return of capital at sale). $1400 * 48 = $67.2K, or a total of $83.8K for 300 hours total over 4 years. That's $279 per hour dry. That assumes max return of capital at the end of the lease (unlikely), and it also doesn't include any opportunity cost of tying up $25K of capital in a plane owned by WOE.

Our friends at Addison advertise a lease on a Garmin Perspective SR22T for $288 per hour dry. An avidyne SR22 turbo is at $225 per hour dry. Those are for 25% of a plane and they're 2 year leases. They're real numbers- I have a friend that did a lease a couple years ago on an SR22. Add to that, you get fleet access if your plane is gone and you want to fly. Yes, I'm sure their variable is higher than the WOE variable cost, and they charge hobbs time rather than tach time.

Regardless of the comparisons, I would offer that your structure isn't compelling. Perhaps there's a way you could tweak the structure. Owning should be more expensive than renting- you won't get any complaints from me there, but compare your ownership costs to competitors both in DFW, and even to Air Shares Elite (note: Air Shares Elite was cheaper 3 years ago when I ran numbers). Add to that, with 7 other owners plus yourself, that's a high potential for conflict which would concern me, not withstanding the potential/probability that the plane is used for travel by a co-owner and is sitting on a ramp away from home.
 
Trying to figure the math. Monthly fee is $224 per hour ($1400x12months/75hours).

Upfront lease is $160 per hour. ($48,000/300hrs)

Back End "refund" is between $0 and $88 per hour. (55%x$48,000/300hrs)=$88.

So, best case is $296hr, dry ($224+$160-$88) and worse case is $384hr.

They said there would be no maths....
 
JoseCuervo said:
Trying to figure the math. Monthly fee is $224 per hour ($1400x12months/75hours).

Upfront lease is $160 per hour. ($48,000/300hrs)

Back End "refund" is between $0 and $88 per hour. (55%x$48,000/300hrs)=$88.

So, best case is $296hr, dry ($224+$160-$88) and worse case is $384hr.

They said there would be no maths....
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Plus another $90hr or so for fuel.
 
I could see paying these costs for a 2012-2013 but not a 2003.
 
All,
Good points. Let me start out by saying the airplane would not be flown for admin reasons on weekends unless there was a maintenance issue. Per contract each participant receives up to 15 overnight stays per year. That way no one participant can take the plane away from home base for extended times. As far as the monthly costs go they are a little high due to the fact that some logistic costs are still unknown. Those are getting worked out as we speak so look for the hourly rates to go down. As I said earlier we want to make flying the SR22 affordable. Thank you for the information you have provided.
 
WOEAircraft said:
All,
Good points. Let me start out by saying the airplane would not be flown for admin reasons on weekends unless there was a maintenance issue. Per contract each participant receives up to 15 overnight stays per year. That way no one participant can take the plane away from home base for extended times. As far as the monthly costs go they are a little high due to the fact that some logistic costs are still unknown. Those are getting worked out as we speak so look for the hourly rates to go down. As I said earlier we want to make flying the SR22 affordable. Thank you for the information you have provided.
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You're not there yet. My 310 is much cheaper to operate, you're close to 340 costs.
 
Why is it that rental/commercial shared ownership arrangements always seem to be a LOT higher than just operating the AC yourself or with 1 or 2 partners?
 
dans2992 said:
Why is it that rental/commercial shared ownership arrangements always seem to be a LOT higher than just operating the AC yourself or with 1 or 2 partners?
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It is the equivalent of a time-share in the real estate world.

From what has been divulged, the eagle is looking for 6 people to put up the money for his wings.
 
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weilke said:
It is the equivalent of a time-share in the real estate world.

From what has been divulged, the eagle is looking for 6 people to put up the money for his plane.
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Lol, yeah, he's trying to make an SR-22 more affordable for himself...:rofl: Just kidding around, I don't begrudge a guy for trying.;) I don't mean to offend, in fact I tip my hat to you to go for it. There are people who will pay a premium to have a well managed plane. Don't be discouraged by what you hear here, the people here are the low end of the flying and economic 1%. If you live in a community with a concentration of 1%ers, and not the biker 1%ers, your proposal could be workable. $400hr operating expense is nothing to the guy that got off his 65-130' or bigger yacht lol. On a big 280' that's barely covers one day crew food budget, we won't even discuss fuel cost differential. Heck, just the fleet of jet skis and tenders cost more in fuel to operate. Here's the deal, you need to manage it at a silver service level and keeps it clean and waxed and with great dispatch reliability. When you can provide these people a high level of service, they will pay you handsomely. I've been making my living off of them for the last 12 years, I don't have to work a lot, but when I do, I work hard and get paid really well. Luckily I just started another job after a five month break.
 
WOEAircraft said:
This is a lease not a rental so the 75 allotted hours will be tach time.
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For a 2003 Cirrus?

Lots of luck with that. No such thing as tach time for that plane. It will have Hobbs only, unless an owner has added an aftermarket flight-time indicator. But no tach time.

Somebody might reasonably question whether you really know what you are doing.
 
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