Is there any profit in refurbishing aircraft?

Discussion in 'Flight Following' started by azblackbird, Apr 11, 2017.

  1. azblackbird

    azblackbird Cleared for Takeoff

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    We've all seen the derelict planes ranging from old Piper Tri-Pacers on up to Lear 25's on the various ramps around the country.

    How come nobody is taking these planes (like all the car guys do with the old cars) and refurbishing them to modern (or even classical) day standards? Is there just no profit in doing it? :dunno:

    Edit to add: What I mean by "nobody", is a basically team of A&P/AI's, painters, avionic experts, upholsters, etc. etc. who could all go in on an airplane, do their magic, then turn around and sell it for a profit.
     
    Last edited: Apr 11, 2017
  2. Goofy

    Goofy Line Up and Wait

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    Sure seems like a huge margin between a sound, but run down, aircraft and a new one. Like a 172 for example. A fellow on my field is redoing a 421. Looks like he'll come out pretty good. Doing all his own work and very clever/knowledgeable on finding parts.
     
  3. teejayevans

    teejayevans Pattern Altitude

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    Probably because you need an AP certificate and those that have one are busy with their day job.
    However I know one Mooney service center that does occasionally refurbish Mooneys.
     
  4. chartbundle

    chartbundle Line Up and Wait

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    For those who need to finance I suspect it will be tough to buy a refurbished plane. I checked on one recently upgraded plane(new paint, avionics, interior) and the bank told me that they didn't feel it was worth nearly the asking price. The seller was doing the upgrades just to sell it but the bank was looking at it as an old airframe with a high time engine and for their valuation all the upgrades were about 50% of their cost.
     
  5. azblackbird

    azblackbird Cleared for Takeoff

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    Good point. A decked out hot rod '57 Chevy in pristine condition is only worth about $1000 in most bank's eyes. :eek:
     
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  6. hindsight2020

    hindsight2020 Pattern Altitude

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    Like I said in another thread, if there was a way to certify the airframe as overhauled in the way the FAA allows an engine to be certified as overhauled, then perhaps the financing/appraisal issue would go away.
     
  7. azblackbird

    azblackbird Cleared for Takeoff

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    I'm not talking about any wrecked or damaged airframes. I'm mostly talking about faded windows/paint jobs, sun baked interiors/avionics, run-out engines, etc. etc. Seems there would be a good market for clean older airplanes that have been gone through bolt by bolt with new/overhauled engines, interiors and fresh paint jobs.
     
  8. drotto

    drotto Line Up and Wait

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    There are a few places that specialize in refurbishment. It can be done.
     
  9. pigpenracing

    pigpenracing Pattern Altitude

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    Most the time you would only come out with a profit if the airplane was free to start. Have you priced engine overhauls, avionics etc? The first plane you said was a tripacer. These days it cost $40,000 to recover and paint one unless you do it all yourself. Then the plane is only worth $25 when its done.
     
  10. azblackbird

    azblackbird Cleared for Takeoff

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    I'm referring to somebody that would have a team of A&P/AI, painters, machinists, upholsterers, avionic geeks, marketing/sales, etc, etc. all in-house. Nothing would be farmed out... all done in-house. Engine over-hauls, painting, upholstery, avionics, parts machining, etc. all done in-house. No farming out the work.

    Do you think that it would/could be profitable if you could get all parts/materials at wholesale cost and did all your own work in-house to refurbish the average dilapidated aircraft that you purchased for pennies on the dollar from somebody's estate, or from 90 yr. old Uncle Henry? :dunno:
     
  11. mtuomi

    mtuomi En-Route

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    It's easy to make money refurbing planes - as long as you can and are legal to do everything yourself. And you put exactly $0 value for your own time (this is why a business venture would fail). Just buy a runout piece of crap, with a good panel (avionics have the worst return for investment, and a good panel will help you sell it).
    Overhauling an engine is dirt cheap compared to the engine shops prices. You can "overhaul" (note the "" marks!) a 4cyl engine for 4 figures (or just over 10k if you get unlucky), and biggest part of plane maintenance is sweat equity.
     
  12. azblackbird

    azblackbird Cleared for Takeoff

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    Let's say you had buddies that were A&P/AI, painters, machinists, upholsterers, avionic geeks, and marketing/sales experts. Everybody pitches in and buys a nice clapped out 1976 Cessna 182 that's been sitting at tie-down for 20 years for $10k The tires are all flat. The windows are glazed over, the interior is sunburnt and ratted out. The paint is all faded. The engine is timed out. However, the airframe is meticulous with no corrosion or damage history whatsoever.

    Now let's say you can get all your parts/accessories at wholesale prices. Everybody pitches in and does their own unique magic to the plane that is their specialty. Plane now looks brand spanking new with all fresh updates. What do you think you could sell it for? :dunno:
     
  13. cowman

    cowman En-Route

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    Most of the guys I know doing the car restoration thing(and I am one of them) are doing it because they like it and want to take pride in having done it themselves. One man doing a complete take everything apart, clean/repair/paint, then reassemble type restoration is going to be lucky to finish in a year and that's only if he spends every spare moment working on the thing. Paying someone for that level of labor is going to cost more than a new car. Only reason to do that is if you really love a certain classic and have money to burn.

    With aircraft you need the right sort of certifications, the parts cost a lot more, you need hangar space,etc. If I had an A&P cert and the space/time I'd absolutely go for it but to pay someone? There are plenty of good enough used aircraft on the market, no way it's worth it.
     
  14. ragedracer1977

    ragedracer1977 Pre-Flight

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    Here's one I agree with you on AZB. It SEEMS like you could make a profit on it. But no one is doing it. I don't know enough to understand why. I know you can take a classic car that's nothing but a frame and a VIN plate and turn it into something worth high 5 figures and make a profit. I don't understand why it's not 'possible' with planes.
     
  15. mtuomi

    mtuomi En-Route

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    Tell me what's in the panel and I'll tell you.
     
  16. azblackbird

    azblackbird Cleared for Takeoff

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    Let's say you had buddies that were A&P/AI, painters, machinists, upholsterers, avionic geeks, and marketing/sales experts. Everybody pitches in and buys a nice clapped out 1976 Mooney M20 that's been sitting at tie-down for 20 years for $15k The tires are all flat. The windows are glazed over, the interior is sunburnt and ratted out. The paint is all faded. The engine is timed out. However, the airframe is meticulous with no corrosion or damage history whatsoever.

    Now let's say you can get all your parts/accessories at wholesale prices. Everybody pitches in and does their own unique magic to the plane that pertains to their specialty. The airplane now looks brand spanking new with all new fresh updates. What do you think you could sell it for?
     
  17. azblackbird

    azblackbird Cleared for Takeoff

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    Nothing fancy, just the normal steam gauges and nav/com systems that were stock to the plane except they've been inspected and/or rebuilt to factory specs. Maybe an engine analyzer. I wouldn't get all fancy with any glass or anything. Many people fly just fine without all that crap.
     
  18. Tom-D

    Tom-D Ejection Handle Pulled

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    The basic reason is simple, the buyers won't pay the prices it requires to restore aircraft.
    Go on line and look up the costs of the interior, paint, engine overhauls, new wheel kits. You can easy tie up 25-30 restoring a Cessna 150. the market on them will not support that cost.
    Most of the aircraft that are setting on the ramp are there because they are not worth the cost of an engine overhaul.
    Lets not even talk about upgrading to a Garmin moving map. or the up coming ADSB
     
  19. azblackbird

    azblackbird Cleared for Takeoff

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    It would seem that way. You live here in AZ. I'm sure you've seen all the crapped out planes at many of the local airports. Nevermind the 100's of planes that are spread out all over the state rotting away in many of the podunk airports. Just seems to me there could be some money made in buying and restoring some of them if you can get the right team together. :dunno:
     
  20. mtuomi

    mtuomi En-Route

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    With zero value panel, 40-50 maybe.
     
  21. azblackbird

    azblackbird Cleared for Takeoff

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    Same could be said for that '34 Ford sitting out back at Uncle Joes Farm. Buy it for a couple grand. Get your team together and and do your magic and sell it at Barrett-Jackson for $200k. I would think there would be a similar market for older, fresh, clean, airplanes that have been refurbished to factory new condition.

    Maybe I'm wrong... which is why you don't ever hear or see about it all that much. I think it would make for a cool reality TV show. Tons of shows about taking crap cars and turning them into diamonds. Somebody needs to do that with airplanes. :ihih:
     
  22. Tom-D

    Tom-D Ejection Handle Pulled

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    about 50 cents per dollar spent.

    The only thing cheap in aviation is the pilots.

    http://www.aircraftspruce.com/catalog/cspages/w3554rtg.php
    262.00 per gallon paint, add the catalyst, the thiner, and maybe the dryer. Paint jobs on a 182 typically run 15-20K
     
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  23. Tom-D

    Tom-D Ejection Handle Pulled

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    Many of those aircraft belonged to G/Pa, and the grand kids believe they are worth a lot of money.
     
  24. mtuomi

    mtuomi En-Route

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    I thought you had a project like this going on? :)
     
  25. azblackbird

    azblackbird Cleared for Takeoff

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    Bingo... you nailed right on the money Tom! :thumbsup:

    Now bring that $20k paint job in-house and do it for $3k. Same goes for that $30k engine overhaul. Bring it in-house and do it for $10k in actual parts and machining. Same goes for the $20k upholstery job. Bring it in-house for $5k. Same goes for the avionics. Bring that $30k stack in-house and do it for $10k or less. Do you think there might be some money to be made if everything is all brought in-house?
     
  26. Tom-D

    Tom-D Ejection Handle Pulled

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    I do, and it won't be cheap either, the rebuilt engine will be around $15k, interior add $3k for the plastic type from Aeroplastics, $2500 for a wheel and brake kit from AS&S, all new glass 6k, paint and powder coating, another 5-6k. all new Common hardware ( AN stuff) Rivets, hard line and hoses, etc. add 1K, new mag kit $2500. Radios ?? low estimate $10k
     
  27. mtuomi

    mtuomi En-Route

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    You're building a $50k C150? :)
     
  28. azblackbird

    azblackbird Cleared for Takeoff

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    Tom, do you do any of your own machining, painting/powder coating, electrical, or upholstery work?
     
  29. mtuomi

    mtuomi En-Route

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    How exactly are you going to do a $30k stack for $10k? Become a Garmin dealer?
    GTN650 is what, $14k? Need a second navcomm, $3k, indicators, $3k. Transponder $3k.
     
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  30. Tom-D

    Tom-D Ejection Handle Pulled

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    That aint going to happen, paint jobs require too much special equipment, dust free booths, dry air, masking, and all that.
    Most A&Ps won't do the engines, even when they send the machining out. It's the liability thing.
    Most A&Ps do not do upholstery, they don't have that Huge heavy duty sewing machine. and the guys that do, cost money.
    You can't even buy the radios for 10 k.
     
    Last edited: Apr 12, 2017
  31. Tom-D

    Tom-D Ejection Handle Pulled

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    I do a lot of it. but farm out the stuff I do not have the equipment to do it with. I just paid 350 bucks to have the two gear legs of the 150 powder coated, and I cleaned them before I delivered Them. I have another $700 due for the rudder linkage little parts.

    This little stuff adds up so fast. it requires over $150 bucks to buy the proper wire to make the wire harness for the 150.
    Price a 4X8 sheet of .025 Alclad Aluminum to replace the floors of the 150 see what the shipping costs.
     
  32. azblackbird

    azblackbird Cleared for Takeoff

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    Nobody said anything about adding Garmin products? I'm talking a decent stock IFR panel which would be refurbed back to new condition. Back in the "pre-Garmin days, the stock panel was more than sufficient for many pilots to fly in the crap with.
     
  33. mtuomi

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    Well you said a $30k stack. An old steam stack is not a $30k stack.
     
  34. ragedracer1977

    ragedracer1977 Pre-Flight

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    I think the only way, long term, to fix these problems lies with the FAA. There's no reason $100 worth of radio parts should cost $10000. Except the regulations and limited sales. It's a chicken and egg thing. Are sales low because prices are high or are prices high because sales are low? For under $300 I can bring more tech into the plane than the designers 40 years ago could have possibly dreamed of. But to get the same tech installed in the the plane would cost 100 times more. FAA needs to allow non-TSO stuff in Part 91 aircraft. If a brand new Vans RV-10 can safely fly with a non-certified panel, why is it dangerous to put the same tech into a 1968 C150? They also need to re-visit the mechanic side of things. Same applies. If a guy with zero experience can safely install every single part on his RV-10, why is it dangerous for the same guy to do the same work to a Cherokee?

    Allowing owner maintenance and avionics work and non-certified parts in owned Part 91 aircraft would go a LONG way to revitalizing GA and getting those ramp derelicts up in the air again.
     
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  35. azblackbird

    azblackbird Cleared for Takeoff

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    Let's say you had buddies that were A&P/AI, painters, expert machinists, upholsterers, avionic geeks, and marketing/sales experts. Everybody shared equally in the work load and you had all the necessary equipment to do everything you needed in-house. Which means you had your own paint booth, ovens, sewing machines, electronics shop, space for the mechanics to work. All the engine and machining equipment needed to do re-builds, etc. etc.

    In other words you'd be a one-stop shop for everything. So are you saying there would still no money in it if you could do maybe 20 planes a year?
     
  36. Tom-D

    Tom-D Ejection Handle Pulled

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    Your theory used to work. but now these old aircraft require too much work, theist of all the materials and parts have gone way high, but the cost of aircraft hasn't.
     
  37. azblackbird

    azblackbird Cleared for Takeoff

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    Just refurbing what's already there. Maybe adding a few modern updates here and there. Nothing major like the Garmin glass.
     
  38. mtuomi

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    You're not making any sense. You're saying "Bring that $30k stack in-house and do it for $10k or less.", but then talking about a junk steam panel.
    You can do a steam panel "in house" for around $1k. Find a few rotten KX170's and some old ARC indicators.
     
  39. azblackbird

    azblackbird Cleared for Takeoff

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    I don't know. I just can't help but think there's a market for simple clean well refurbished 4 place aircraft somewhere in the 100k range. If everything could be done in-house (including the manufacture of new parts) and not have to be farmed out to anybody, I think there could be some potential there. :ihih:
     
  40. Tom-D

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    No one wants to buy that old theory radios.
    Go price the new instruments to refurbish the instrument panel. see what an overhauled 208 indicator costs, how about a new gyro or a DG.
    Most of the instruments in this panel were over $1K
     

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