Glass vs. Gauges and Bonus Depreciation

[flyingcheesehead]

I have some questions relating to my club's hopefully-upcoming purchase of a new or slightly-used airplane.

First, glass panels:

It seems to me that the number of moving parts that are eliminated by having a glass panel would make maintenance costs lower in the long run. Yes, things are more expensive to replace when they do go, but it seems the MTBF on a glass panel would be so much higher than traditional gyros that it would even out at least.

That brings up the question of reliability. I know there have been some problems with the Avidyne systems, such as the Cirrus that crashed last spring in FL. 84 hours TTAF, but was on its fourth PFD. The Avidyne being an all-in-one system, when that sucker goes it's a $40,000+ repair once your two-year warranty runs out, which makes me very leery. Has anyone heard of similar problems with the G1000? I'm sure the G1000 system would be MUCH easier to fix due to its modular design, but I'm sure one of those displays probably goes for around $10,000 as well right?

Second... Bonus depreciation. Does it end at the end of this year again? Would our club (a privately-held corporation) qualify, or is it only for individuals?

Thanks,

 

[Iceman]

That brings up the question of reliability. I know there have been some problems with the Avidyne systems, such as the Cirrus that crashed last spring in FL. 84 hours TTAF, but was on its fourth PFD. The Avidyne being an all-in-one system, when that sucker goes it's a $40,000+ repair once your two-year warranty runs out, which makes me very leery. Has anyone heard of similar problems with the G1000? I'm sure the G1000 system would be MUCH easier to fix due to its modular design, but I'm sure one of those displays probably goes for around $10,000 as well right?

Right now both Avidyne and garmin are just trying to work the bugs out in their design. I don't honestly think that garmin is any cheaper to fix than Avidyne is. The garmin modular design keeps the gps processors and other accesories in units that can be easily replaced at the airport. However their Air Data sensor or whatever they call it is still one peice like the Avidyne unit. Meaning if it goes I don't think it can be pulled and changed in the field (not sure however). THe Avidyne is not an all in one design. They use garmin 430 etc to provide info to the mfd displays.

As far as cost to maintain I'm not sure. If you asked me this question a few years ago I would say much lower. However, after having problems with the 530 and two 430's we have used makes me think . I do think the glass panals have a better resale value because in a few (3-10) years that is what everyone will want.

Second... Bonus depreciation. Does it end at the end of this year again? Would our club (a privately-held corporation) qualify, or is it only for individuals?

Thanks,

This is a huge question you are asking and I'm not the one to answer it however, my bad advice is always free. Looking past bonus depreciation to depreciation in general you are talking about making the government one of your partners. In my opinion it would be far easier to do it as individuals. Keep in mind the government does not like to give their money away. If you are not flying at least 2/3 as documented justifiable business flights they might not pick up your tab. These hours do not include flights for training, maint, etc. Also keep in mind the bonus depreciation just means you can write the plane off faster but you are still depreciation the plane by the same amount. Also keep in mind the government wants their money back when you sell your share back to the corporation. Lastly, the bonus depreciation works for new and used aircraft so don't let the salesman trick you into thinking new is the only way to go.

Chris

 

[C-1 PILOT]

Kent, unless your club has a hefty reserve fund or is willing to pay up (when the time comes) I'd stick with steam gauges. My question all along is...What happens several (5-10) years down the road? When these glass panel aircraft are in the hands of their 3rd, 4th or 5th owners?

You are correct, the Garmin displays (not the individual LRU's) go for $10,000 each. There are new ones delaminating and leaking as we speak, all warrant'd now by Garmin. What happens down the road?

One purchases an IFR G1000 equipt'd A/C and shortly thereafter finds one of the problems (or new ones) mentioned above? Your IFR ship is now an expensive VFR only ship (cetified with both screens) and you face a 10 grand plus labor charge to replace it/them? the average JOE will not afford it IMHO. go steam unless you are well off...

 

[flyingcheesehead]

As far as cost to maintain I'm not sure. If you asked me this question a few years ago I would say much lower. However, after having problems with the 530 and two 430's we have used makes me think .

Well, electronic stuff is gonna break eventually. Our 430 has been about our most reliable piece of equipment this year. However, it seems that if you can get 5,000 hours out of a display at $2/hr before it needs to be replaced, you might be ahead of the game compared to standard gyro instruments which have to be done what, every 500 hours?

I do think the glass panals have a better resale value because in a few (3-10) years that is what everyone will want.

That is part of my thought, as even though we'd probably be keeping it for at least 15-20 years, we're "selling" it over and over again every time a member wants to sell their shares. We're looking to keep our share value high by having the best-looking, best-equipped club fleet in town.

If you are not flying at least 2/3 as documented justifiable business flights they might not pick up your tab. These hours do not include flights for training, maint, etc. Also keep in mind the bonus depreciation just means you can write the plane off faster but you are still depreciation the plane by the same amount. Also keep in mind the government wants their money back when you sell your share back to the corporation. Lastly, the bonus depreciation works for new and used aircraft so don't let the salesman trick you into thinking new is the only way to go.

What if our business IS flying? We are a flying club, after all.

I know the plane will still depreciate anyway, just wondering about tax benefits to us.

In terms of shares, I'm not looking to do the bonus depreciation myself on my share in the corporation (can you even do that?), I was wondering if the corporation can get the bonus.

The salesman wasn't saying anything about bonus depreciation, the folks on this board and in the news have always said that the only real advantage of going for a new plane vs. a slightly used one was the bonus depreciation.

Thanks,

Kent, unless your club has a hefty reserve fund or is willing to pay up (when the time comes) I'd stick with steam gauges. My question all along is...What happens several (5-10) years down the road?

We finally established a reserve fund in April of this year. Already up near $10,000!

There are new ones delaminating and leaking as we speak, all warrant'd now by Garmin. What happens down the road?

That's the kind of stuff I'm looking for... Where can I find out about these things happening to Garmin equipment? All I've found on the Avidyne is Cirrus accident reports.

One purchases an IFR G1000 equipt'd A/C and shortly thereafter finds one of the problems (or new ones) mentioned above? Your IFR ship is now an expensive VFR only ship (cetified with both screens) and you face a 10 grand plus labor charge to replace it/them?

It's not even VFR, it's a paperweight isn't it? I guess you could use the backup ASI etc. but no nav instruments, no radios, etc. if both screens go out.

Which brings up another question... Just how modular is the G1000? Where are the guts? If one screen dies I know you can get the PFD info on the other one by flipping the little red button, and I know all functions can be accessed by the buttons on either display, but I'm curious if there are any shared points of failure that would take out both displays.

 

[Iceman]

Well, electronic stuff is gonna break eventually. Our 430 has been about our most reliable piece of equipment this year. However, it seems that if you can get 5,000 hours out of a display at $2/hr before it needs to be replaced, you might be ahead of the game compared to standard gyro instruments which have to be done what, every 500 hours?

I agree it would be great to have a long lasting avionics in your aircraft. I also think it will attract new members to your club.

I think you also need to look at your "standard gyro instuments". Most should go at least a 1000 hours if they are good quality (DG and AH). I would think you would get twice the life out of the TC and CDI's. Probably the vac pump will go out before 1000 hours. I agree that there is a cost to running the standard 6 however I do not think one should go glass for cost alone. Glass will have cost too...probably more spread out and larger bills.

What if our business IS flying? We are a flying club, after all.

I know the plane will still depreciate anyway, just wondering about tax benefits to us.

It's not that easy. Again I'm not the one to ask however, I think the government would want some real income or an attempt at making money. I'm not sure how your club works but most want to hold profits to a min to allow cheap flying for all the members. Also remember when a business rights off anything they are not getting free money instead they are lowering the tax paid by the company.

Lets say your club is making 20g's a year which would be 5g's in taxes a year. Over five years that is only 25k in taxes to displace the write off on a 300k aircraft.

I might be waaaay off here I wished someone with some real knowledge would speak up.

Chris