"Nationwide" airplane rental - why not?

[Skip Miller]

An outfit called "Lease-a-Plane" tried this about 30-35 years ago. Not enough folks were interested to make it fly on its own, and local FBO's saw little to gain by joining the network. It died after a few years.

Avis tried this, too. You can still see some Cherokees with N numbers ending in AV. I'm guessing the high cost of insurance had something to do with the demise.

-Skip

 

[poadeleted20]

Well, true, but I would assume that with the advanced marketing techniques we have these days that it would work better now.

I've seen nothing in the aviation world to suggest that assumption has merit, but you may feel free to test it. How much cash do you have to invest?

Plus - rather than setting up a club type thing, where FBOs can join, I'm thinking more like a chain that sets up rental outfits across the country.

You mean a franchise operation? Where the only thing you do is rent planes? Without the fuel sales, maintenance, training, etc, you may have trouble clearing your overhead.

 

[JeffDG]

Avis tried this, too. You can still see some Cherokees with N numbers ending in AV. I'm guessing the high cost of insurance had something to do with the demise.

-Skip

Depending on the size of the fleet, I'd bet Avis/Hertz could self-insure...have the planes owned by independent entities (like LLCs) so their only risk would be hull value.

 

[poadeleted20]

Depending on the size of the fleet, I'd bet Avis/Hertz could self-insure...have the planes owned by independent entities (like LLCs) so their only risk would be hull value.

Then how does the franchisee get insurance? Smaller fleet, higher per-aircraft rates would make the prices go back up.

 

[taters]

getting insurance is reaching crisis levels.

You could not be more correct. I think ultimately this is why this couldn't work.

Second to our government, aviation insurance is the most broken system I know of and has been a major player in the demise of many schools.

 

[JeffDG]

Then how does the franchisee get insurance? Smaller fleet, higher per-aircraft rates would make the prices go back up.

Franchisee is at no more risk than the parent, actually. Again, the parent could create their own self-insurance pool and collect exorbitant fees from renters and use that to cover losses.

If the owner of the aircraft has no assets other than the aircraft (which is why I said each aircraft is owned by its own legal entity), liability for the owner is quite manageable.

 

[wabower]

How is aviation insurance at fault for anybody's demise? Are you suggesting that they collude or conspire to overcharge for their products?

You could not be more correct. I think ultimately this is why this couldn't work.

Second to our government, aviation insurance is the most broken system I know of and has been a major player in the demise of many schools.

 

[wabower]

The answer to this and all other rent-lease-frac questions is always the same. They won't ever work because the cheap-ass pilots will never pay the real cost of owning and operating the airplane, but will instead squeal like pigs when a company figures out the actual cost to provide the service and earn a reasonable profit.

 

[taters]

How is aviation insurance at fault for anybody's demise? Are you suggesting that they collude or conspire to overcharge for their products?

so much fun to re-buy my plane every 3 years. (on a inst/rental policy)

if it was just for me would cost less than a new set of tires.. thats actually not what bothers me so much...its the BS of only one underwriting company forcing you into a corner and playing **** you until you love me.