Plane for the mission

[Ted]

True but in Iowa and most points around it stellar climb SE isn't as critical.

Agreed, but it's still not a position you'd want to be in. For the days flying along lightly loaded, it'd be less of an issue. For the days heavily loaded, no fun. And it seems every time I kill an engine on people in a perfectly safe situation (lots of altitude), their first response is to trade airspeed for maintaining altitude. I consistently have to remind them to maintain blue line.

The point being that 3/4 mil will buy a LOT of good piston engine planes a few times over. And even with more planes to maintain operating costs will still probably come in below a turbine.

This is part of the reason why I like piston aircraft overall. However, the bigger issue as I see it is the fact that he's wanting to make 750 nm flights non-stop with reasonable block times. A Navajo will have a hard time doing that, same with a 421. A fast Mooney, 58P, or RAM T310R would have better luck doing that. I'm a big fan of the RAM T310R for that reason. Similar performance to a Cheyenne with piston costs.

But, it could be an option worth considering.

And as you noted, a "fleet" however small improved dispatch rates

Absolutely. This was one of the reasons why Cloud Nine was happy to be able to expand to two aircraft instead of one. However, after flying the fleet for over a year, the Aztec will be coming up for sale soon for multiple reasons.

 

[Skylane81E]

I still think a Bravo w FIKI TKS would be a good pick up, it will cover the first flight well and if coupled to a good twin weather concerns can be lessend significantly. If it's really icy out there you have the option of taking the big plane and dealing with more fuel burn. However with half the engine (vs Navajo as it's what I know) and more speed it wouldn't take many trips where you could take the single to offset a large portion of it's operating budget. Chalk the rest of the cost up to getting there faster.

 

[Ted]

This is assuming two things:

1) The reliability and compromises of the Mooney are acceptable for those trips (single engine, etc.)

2) OEI proficiency can be maintained. For a relatively new MEL pilot, this is important. Doubly so if you're looking at primarily making the trips in the Navajo when it's heavier (i.e. when you need to be the most on your toes and most proficient in the aircraft)

One plane helps the latter, but if two planes, both being twins helps with MEL proficiency.

 

[Skylane81E]

All valid points to go into a final decision.

Now FWIW the list of flights is similar to ours (though fewer in number) for our 135.

We have a Chiftain, a SR22 and a little used (mostly a rental but kept up as a spare, great for short hops) SR20

These flights are devided between 4 pilots who mostly fly singles. Granted they are all ATPs with hours between 1500 and 9000. The regular FAA Checkrides help keep them honest and require maintaing profficency.

 

[ronnieh]

I don't think you will get many corporate types in the single engine. That alone would be a deal killer for most of the people I know. The basic problem is that the missions as James described them is not suitable for piston engines. I am not saying it can't be done but it is not suitable. Ted proves it can be done. I still can't get over the 7 passengers in a 310 Navajo. Our door seat was never installed in the Chieften.
James defined missions scream turbine. However his budget says otherwise. You need $1M to pay the price of admission at the bottom end. After that the real expense starts. Flying ain't cheap!!

 

[wabower]

People who live in small-medium market areas are painfully aware of the travel-related issues when compared to those enjoyed by big-city folks.

When I worked on an acquisition engagement for a client in Little Rock, he provided me with all of the legs flown by their people on both commercial and charter for the prior two years. The list of connecting flights was staggering, as was the wasted time that resulted. Not many non-stops to anywhere but big hubs if you live in LIT. Another client in NW Iowa finally concluded that sooner or later he would be killed during the mind-numbing drive to MSP to catch a plane, so he and a group bought an airplane.

For a large part of my primary business career I lived in Kansas City. Airline service there was adequate, but no direct flights were available to some of the places like Nashville that were frequent high-priority trips for me. As a result I owned numerous planes and flew more than 9,000 hours over a 20+ year period. If I had lived in Dallas with access to SWA during that time, there's a chance that I would never have flown anywhere in a private plane.

Just for clarification purposes, I'm the perspective pilot in this scenario. I've done 140 takeoffs with United this year, the boss has done about the same and it is freaking killing us. Combine that with the lost travel and family time and we need to make something else happen. I haven't been flying much because of the travel schedule.

 

[Ted]

I don't think you will get many corporate types in the single engine. That alone would be a deal killer for most of the people I know. The basic problem is that the missions as James described them is not suitable for piston engines. I am not saying it can't be done but it is not suitable. Ted proves it can be done. I still can't get over the 7 passengers in a 310 Navajo. Our door seat was never installed in the Chieften.

As I said, it was carefully calculated, and not something that I think is a particularly excellent idea. If it was a regular trip, it'd be in a turbine.

James defined missions scream turbine. However his budget says otherwise. You need $1M to pay the price of admission at the bottom end. After that the real expense starts. Flying ain't cheap!!

I don't know about that. The local turboprop owners I know have spent <$500k on their aircraft (two Cheyennes, one Commander). They've all been happy with their purchase decisions and have been able to comfortably afford operation costs.

There's a difference between purchase cost and operating cost, and I don't buy the philosophy that if you can't afford the purchase you can't afford the operating. It all depends on how your business and finances are structured. For example, Cloud Nine would not have been able to buy the 310 that we have. Fortunately, we didn't have to - it was donated. We've been able to afford operating it just fine. In the case of the Aztec, I did buy it outright, but I've seen old 172s go for more than I paid for it. Again, operating costs haven't been a problem.

 

[ronnieh]

Just picking at you Ted on the 310 Navajo. Your experience and mine have been different on costs. I am not saying you can not get a Cheyenne II for $500K but what kind of II. What does the paint and interior look like? What about avionics, boots and how much time on the engines? Also, I am not sure a II would do what James wants to do. I would consider an older II to kind of be at the bottom of the turbine market. No offense intended. The Cheyenne I fly had a $200K panel up grade 4 years ago. Paint and interior another $60K 4 years ago. Yes you can get into the turbine market for less than $1M but many corporate owners are concerned about looks and many pilots like the more modern avionics. I don't think you will get a straight 200 with good paint, interior, mid time engines and descent avionics for less than than $1M and a B200 another perhaps $150K. Again JMO.

 

[Ted]

Just picking at you Ted on the 310 Navajo.

I know.

But I also want people to realize that it's not something that you should just hop in and do haphazardly. I spent a lot of time planning that trip, and would spend no less time planning it today. I talked to the owner of the airplane on its realistic fuel burn based on his experience. I was experienced flying piston twins at gross, so their unwillingness to leap off the ground was not new to me.

Your experience and mine have been different on costs. I am not saying you can not get a Cheyenne II for $500K but what kind of II. What does the paint and interior look like? What about avionics, boots and how much time on the engines?

Both of the ones that are local to here have about mid-time engines (which still leaves a good sum of life). Both of the IIs have nice avionics stacks with good, working radar (one feeds it through a GMX 20). Both have 530/430 stacks, dual 327s, good HSIs, RMIs, etc. No G600s, but still very nice stacks. Both have interiors and exteriors that are a 9.

Also, I am not sure a II would do what James wants to do. I would consider an older II to kind of be at the bottom of the turbine market. No offense intended.

Agreed 100%, but it would do the job better than a 421 or Navajo.

The Cheyenne I fly had a $200K panel up grade 4 years ago. Paint and interior another $60K 4 years ago. Yes you can get into the turbine market for less than $1M but many corporate owners are concerned about looks and many pilots like the more modern avionics. I don't think you will get a straight 200 with good paint, interior, mid time engines and descent avionics for less than than $1M and a B200 another perhaps $150K. Again JMO.

I think Wayne's correct in saying it's doable, but it might require more searching for the proper deal.

 

[wabower]

I think Wayne's correct in saying it's doable, but it might require more searching for the proper deal.

Not only is it doable, we recently did it. There's obviously much more to the puzzle than meets the eye, especially when turbines are concerned.

 

[ronnieh]

Turbines are a good deal right now as far as aquisition costs. One thing I would point out to anyone considering a turbine. The initial cost of the plane is the cheap part. You can easily spend that much in 3 years operating costs. I have seen people buy a C90 for example because the cost is $250K less than a comparable 200. They really needed a 200 because of the mission. I think you will find that the up keep is almost the same on the two aircraft. You will burn less fuel per hour (however you will go more miles in an hour) because you are dragging around less plane. But I think insurance, hangar, pilot fees, training, inspections, engine reserves, prop reserves, incidental maintenance will be quite similar. A one time expenditure of say $250K may buy you a lot more useable plane while the DOC may go up very little.
I should have worded my comment a little different. I should have said that it will take $1M to get into the bottom of the turbine market in the B200/IIIA/Conquest II market. I suspect a II might be a good buy if it fits the mission requirements.

 

[Ted]

Not only is it doable, we recently did it. There's obviously much more to the puzzle than meets the eye, especially when turbines are concerned.

There you go.

 

[Ted]

Turbines are a good deal right now as far as aquisition costs. One thing I would point out to anyone considering a turbine. The initial cost of the plane is the cheap part. You can easily spend that much in 3 years operating costs. I have seen people buy a C90 for example because the cost is $250K less than a comparable 200. They really needed a 200 because of the mission. I think you will find that the up keep is almost the same on the two aircraft. You will burn less fuel per hour (however you will go more miles in an hour) because you are dragging around less plane. But I think insurance, hangar, pilot fees, training, inspections, engine reserves, prop reserves, incidental maintenance will be quite similar. A one time expenditure of say $250K may buy you a lot more useable plane while the DOC may go up very little.

This is a valid point, however I've found that with every plane the purchase cost can easily be the cheapest part of acquisition. In three years and 800 hours with the Aztec, I've probably spent 2-3x the purchase cost on flying it. The 310, if I'd purchased for a reasonable price, I'd have past purchase price easily in 15 months and 300 hours.

 

[ronnieh]

Yep, I agree 100%

 

[Skylane81E]

Then theres the other side of the coin (granted a piston single) with me.

I'm 6 years and 500 odd hours into my plane and even after the pending overhaul I should still be shy of my purchase price.

 

[James_Dean]

People who live in small-medium market areas are painfully aware of the travel-related issues when compared to those enjoyed by big-city folks.

When I worked on an acquisition engagement for a client in Little Rock, he provided me with all of the legs flown by their people on both commercial and charter for the prior two years. The list of connecting flights was staggering, as was the wasted time that resulted. Not many non-stops to anywhere but big hubs if you live in LIT. Another client in NW Iowa finally concluded that sooner or later he would be killed during the mind-numbing drive to MSP to catch a plane, so he and a group bought an airplane.

For a large part of my primary business career I lived in Kansas City. Airline service there was adequate, but no direct flights were available to some of the places like Nashville that were frequent high-priority trips for me. As a result I owned numerous planes and flew more than 9,000 hours over a 20+ year period. If I had lived in Dallas with access to SWA during that time, there's a chance that I would never have flown anywhere in a private plane.

Currently driving home after doing CMH - ORD - FSD with a wheels up at six bells. Was my 53rd visit to ORD this year and let me tell ya, it is freaking depressing that some of the red carpet club staff know me by sight. Door to door will be 7+30.

 

[Tom-D]

Not only is it doable, we recently did it. There's obviously much more to the puzzle than meets the eye, especially when turbines are concerned.

This is very true, simply because the turbine aircraft are on a continuous maintenance programs and the A&P-IA can't maintain them from the tailgate of their truck. So the FBOs are now able to rape you on maintenance costs.

The tools to complete a 3500 hour turbine inspection on a P&W PT6 is worth more than my house, plus we must have the jacks, hydraulic and electrical equipment to do the ground servicing of the aircraft.

Maintenance is going to play a big part in this turbine / piston decision.

If I were in the OPs shoes I would be looking for a lease of a Pilatus PC 12. like this one
http://www.trade-a-plane.com/detail/TurboProp/2006/Pilatus/PC-12_47/1423502.html

 

[ronnieh]

James, lets go back to your original question, which plane?
There will be no perfect plane for all missions but your mission profile is interesting.
#1 any turbine will do that, C90, Cheyenne II what ever
#2 Same as #1
#3 A little more problamatic. It will take a fuel stop and will use up a day each way. That may not be a problem but needs to be considered.
#4 You are going to be crowded. Especially since you are going to be operating with two pilots for at least a year. A B200 comes closer to accomplishing all 4 missions. Any of the Cheyennes are just to small for mission 4

Expectations:
#1 I respectfully disagree here. You will not need a CFI but you will need a babysitter. I suspect with a 9 place airplane the minimum will be 2000PIC, instrument/commercial, approved initial training and yearly recurrent and 200 hours in make and model with the babysitter. Here I am just guessing based on my personal experience. What you are willing to pay for insurance and your requirements for liability coverage will largely shape this.
#2 Not sure what is meant by "on site". Training requirements addressed above
#3 In most small corporate flight departments the pilot manages the plane. Part 135 standards will substantially increase the cost. Parts can not be used "on condition". One example: At five years since overhaul the props only have 900 hours. Must still be overhauled can not be IRAN'ed. Many items on turbine aircraft have an hour limit that must be met for part 135 rather than inspected and return to service on condition. Just something to consider. I am just guessing here but could increase DOC 20-30%, perhaps more.
#4 It is what it is. Never heard an owner complain about the plane being too fast or able to carry too much weight.
#5 FIKI is assumed
Other:
#1 You already see that Ted and I disagree. You will have to look at the market and see what is out there. I think the B200 fits your mission profile the closest but, you do have options.
#2 I do not think this matters because I don't think there is a piston plane that you would be happy with.
#3 The tough one. I threw out a number of $1300/hour on the IIIA at 200 hours per year. Airframe parts, especially on orphan aircraft like the Cheyenne are horrendous. The basic turbine engine, compressor, hot section, and gearbox don't give much trouble as a rule. But when they do.... A couple examples: If you eat a gearbox on a 200 you will not get out for $100K. A hot start? One set of turbine blades for our -61 is well north of $75K, that is just for one set of blades, no labor and each engine has three sets. You get my drift. Again it is rare but....
These are the things I would factor in if I were making the choice and decision on whether to buy a plane. There will be some here who disagree and their oppinion should be factored in as well. There will not be a perfect answer nor even a perfect plane. JMO

 

[Ted]

There will not be a perfect answer nor even a perfect plane. JMO

Truer words were never spoken.

 

[James_Dean]

James, lets go back to your original question, which plane?
There will be no perfect plane for all missions but your mission profile is interesting.
#1 any turbine will do that, C90, Cheyenne II what ever
#2 Same as #1
#3 A little more problamatic. It will take a fuel stop and will use up a day each way. That may not be a problem but needs to be considered.
#4 You are going to be crowded. Especially since you are going to be operating with two pilots for at least a year. A B200 comes closer to accomplishing all 4 missions. Any of the Cheyennes are just to small for mission 4
[quote/]

Remember that the missions were ranked in order of importance. Also #4 is with my wife and kids who are 9, 7, 5, 3, and 1. I know they will be growing, but we're not talking serious heft for several years. I also included myself as one of the pax in all scenarios.

Expectations:
#1 I respectfully disagree here. You will not need a CFI but you will need a babysitter. I suspect with a 9 place airplane the minimum will be 2000PIC, instrument/commercial, approved initial training and yearly recurrent and 200 hours in make and model with the babysitter. Here I am just guessing based on my personal experience. What you are willing to pay for insurance and your requirements for liability coverage will largely shape this.
#2 Not sure what is meant by "on site". Training requirements addressed above
#3 In most small corporate flight departments the pilot manages the plane. Part 135 standards will substantially increase the cost. Parts can not be used "on condition". One example: At five years since overhaul the props only have 900 hours. Must still be overhauled can not be IRAN'ed. Many items on turbine aircraft have an hour limit that must be met for part 135 rather than inspected and return to service on condition. Just something to consider. I am just guessing here but could increase DOC 20-30%, perhaps more.
#4 It is what it is. Never heard an owner complain about the plane being too fast or able to carry too much weight.
#5 FIKI is assumed
Other:
#1 You already see that Ted and I disagree. You will have to look at the market and see what is out there. I think the B200 fits your mission profile the closest but, you do have options.
#2 I do not think this matters because I don't think there is a piston plane that you would be happy with.
#3 The tough one. I threw out a number of $1300/hour on the IIIA at 200 hours per year. Airframe parts, especially on orphan aircraft like the Cheyenne are horrendous. The basic turbine engine, compressor, hot section, and gearbox don't give much trouble as a rule. But when they do.... A couple examples: If you eat a gearbox on a 200 you will not get out for $100K. A hot start? One set of turbine blades for our -61 is well north of $75K, that is just for one set of blades, no labor and each engine has three sets. You get my drift. Again it is rare but....
These are the things I would factor in if I were making the choice and decision on whether to buy a plane. There will be some here who disagree and their oppinion should be factored in as well. There will not be a perfect answer nor even a perfect plane. JMO

We are on the same page on all points. This would be primarily a business use aircraft and that is what is driving the purchase. I think the most realistic scenario is to end up paying someone to manage the aircraft, whether that be a local FBO(I'm close to a mid sized field with good mx including turbines), or a full time pilot. Only wrinkle is that I want to learn to fly the thing safely and eventually solo, however I will always want to keep the option of sitting in the back when situation calls(or I'm shot).

 

[ronnieh]

A good full time pilot can keep your FBO honest (not to imply they are crooks) and it does give you some options. Perhaps a pilot who is retired but looking for a little part time work. Anyway, I think you are approaching this in a very good way. Keep us informed and the best of luck!!

 

[jason]

Remember that the missions were ranked in order of importance. Also #4 is with my wife and kids who are 9, 7, 5, 3, and 1. I know they will be growing, but we're not talking serious heft for several years. I also included myself as one of the pax in all scenarios.

Man! I remember when all of you fit into the Saratoga with a seat to spare!

 

[James_Dean]

Man! I remember when all of you fit into the Saratoga with a seat to spare!

Yeah, that ship sailed a few years ago.....

 

[wabower]

From KC, our mfg/warehouse facility near OSU was 8.2 door-to-door by airlne, 3.3 by King Air, all pre-TSA. An hour of that was road time.

Currently driving home after doing CMH - ORD - FSD with a wheels up at six bells. Was my 53rd visit to ORD this year and let me tell ya, it is freaking depressing that some of the red carpet club staff know me by sight. Door to door will be 7+30.

 

[James_Dean]

I still think a Bravo w FIKI TKS would be a good pick up, it will cover the first flight well and if coupled to a good twin weather concerns can be lessend significantly. If it's really icy out there you have the option of taking the big plane and dealing with more fuel burn. However with half the engine (vs Navajo as it's what I know) and more speed it wouldn't take many trips where you could take the single to offset a large portion of it's operating budget. Chalk the rest of the cost up to getting there faster.

I'm 5'11 ans 265 lbs, my brother is 6'5 and 270, and the boss is 6'4 and 250. We already own a saratoga and there is no way we're staying in a single let alone a mooney.

 

[Ted]

I'm 5'11 ans 265 lbs, my brother is 6'5 and 270, and the boss is 6'4 and 250. We already own a saratoga and there is no way we're staying in a single let alone a mooney.

That would also make a 58P or even a 340 be more difficult for you to get in and out of. Navajo, Cheyenne (at least I and II, Ronnie can tell you about the III), 421, KA, shouldn't be an issue.

If you went for the two-plane concept, you could do a RAM T310R as one. My friend trues out at 230 KTAS in the low flight levels with his, although he burns about 44 gph to do that. Still significantly less than what any turboprop would be burning. He's put 500 hours on it since he had the RAM conversion done, and loves it. Just got to see him and the plane yesterday. We agree that my 310 has a nicer paint job and flies better (the N is sportier), but his is faster.

 

[wabower]

King Air MX programs aren't all that much different than pistons and consist of recurring inspections (phase 1-4) time-life inspections and special inspections. I have the B-200 inspection guide on Excel if you want it. The guides for all of the King Airs are almost identical. Engine work is much simpler (although most shops don't do it in-house) because the engines are modular and an engine can be removed and compressor section pulled in much less time than removing a piston engine.

This is very true, simply because the turbine aircraft are on a continuous maintenance programs and the A&P-IA can't maintain them from the tailgate of their truck. So the FBOs are now able to rape you on maintenance costs.

The tools to complete a 3500 hour turbine inspection on a P&W PT6 is worth more than my house, plus we must have the jacks, hydraulic and electrical equipment to do the ground servicing of the aircraft.

Maintenance is going to play a big part in this turbine / piston decision.

If I were in the OPs shoes I would be looking for a lease of a Pilatus PC 12. like this one
http://www.trade-a-plane.com/detail/TurboProp/2006/Pilatus/PC-12_47/1423502.html

 

[James_Dean]

Ok, so I've found a few options to consider.

1. A privately owned KA 200 on leaseback doing 135 at a local airport. Owner wants to move up to a jet and is looking to sell. We would keep it in the existing program. This was my home base where I did all my training and currently keep my plane so I know the people and program. Field has turbine mx facility, respected avionics shop and good infrastructure. Acquisition costs a little above my range, but not way out. Plane is currently flying 200 hours/yr over what current owner is using. Plane has updated avionics and blackhawk conversions.

2. Option to buy a 1/3 interest in a partnership running a KA 300, but I don't know much about the plane at this time other than appraised value. Home base is a little farther from us, but is more centrally located between main destinations. I think this is a big benefit for trips that require a 3 or 4 day ground stop. One of our business partners already knows one of the remaining partners in the plane and can vouch for him. I have seen the partnership agreement and it appears sound and the owners have done well keeping significant reserves and mx appears to be top notch. Partnership has a note on the aircraft and are upside down on the note however have reserves in the bank that get the value of the partnership to par. We would be buying in on the basis of assuming our portion of the note and as such are getting in for next to zero upfront.

In both cases our work to get "in" is minimal which is attractive to us with everything we have going on. Anybody have some thoughts on the operating cost differences between a 200 and a 300? I'm thinking the chances of me ever soloing the 300 is quite a bit less due to the nature of the partnership, insurance, and the type rating required, but would like thoughts from the group on those assumptions.

What else should I be thinking about?

Thanks for everyone's time,

Eggman

 

[wabower]

#3 The basic turbine engine, compressor, hot section, and gearbox don't give much trouble as a rule. But when they do.... A couple examples: If you eat a gearbox on a 200 you will not get out for $100K. A hot start? One set of turbine blades for our -61 is well north of $75K, that is just for one set of blades, no labor and each engine has three sets. You get my drift. Again it is rare but....

Pratt engines are cheap and available. Even more of them now than in the past due to upgrades to the Blackhawk and Beech re-engine programs. There's no reason to O/H a power section when entire engines can be bought cheaper and installed in a day's time.

Hot starts seldom cause any damage to innards because only the air is hot and the metal is still cool. The heat event doesn't last long (unless the pilot is asleep) so it's just a big light show.

A serviceable compressor turbine wheel can be bought for less than half of the cost of new blades.

There will be some here who disagree and their oppinion should be factored in as well. There will not be a perfect answer nor even a perfect plane. JMO

Numerous perfect airplanes are available, just not at the price point these guys want to pay to own and operate.

 

[James_Dean]

Numerous perfect airplanes are available, just not at the price point these guys want to pay to own and operate.

Desire is different that willing and able if necessary.

 

[wabower]

1. A privately owned KA 200 on leaseback doing 135 at a local airport. Owner wants to move up to a jet and is looking to sell. We would keep it in the existing program. This was my home base where I did all my training and currently keep my plane so I know the people and program. Field has turbine mx facility, respected avionics shop and good infrastructure. Acquisition costs a little above my range, but not way out. Plane is currently flying 200 hours/yr over what current owner is using. Plane has updated avionics and blackhawk conversions.

This is the deal-killer. Nobody other than the 135 guy makes money on charters. If you want the plane to fly more than you will use it, co-owners (who share both fixed and ownership costs) are a hands-down better option than a charter operator that shares neither.

2. Option to buy a 1/3 interest in a partnership running a KA 300, but I don't know much about the plane at this time other than appraised value. Home base is a little farther from us, but is more centrally located between main destinations. I think this is a big benefit for trips that require a 3 or 4 day ground stop. One of our business partners already knows one of the remaining partners in the plane and can vouch for him. I have seen the partnership agreement and it appears sound and the owners have done well keeping significant reserves and mx appears to be top notch. Partnership has a note on the aircraft and are upside down on the note however have reserves in the bank that get the value of the partnership to par. We would be buying in on the basis of assuming our portion of the note and as such are getting in for next to zero upfront.

This is a better deal even with repositioning costs, if:
1. The ferry costs aren't excessive, and
2. You have adequate access to use of the plane.

The 300 isn't as good an airplane for your needs due to the type-rating BS that goes with it, and they have never held resale value as well as the 200's, which may be part of the reason the current owners are in the tank re loan to value ratio.

In both cases our work to get "in" is minimal which is attractive to us with everything we have going on. Anybody have some thoughts on the operating cost differences between a 200 and a 300? I'm thinking the chances of me ever soloing the 300 is quite a bit less due to the nature of the partnership, insurance, and the type rating required, but would like thoughts from the group on those assumptions.

What else should I be thinking about?

I'd be thinking about the budgets, both annual and life-cycle that I mentioned earlier. I'd also be checking the documentation and structure of the proposed ventures. IOW, you want to buy the asset, not the interest in the entity that currently owns the plane. These along with about a hundred other things are all that's necessary to be sure you're doing it right.

 

[Ted]

What else should I be thinking about?

Something you may want to consider with either of these agreements is how it would impact your use of the plane. On 135, it's probably a bit simpler since you're the owner and can just tell other customers that the plane's not available that day. If you have partners in the plane, how do you determine who has precedence when two of you want the plane? That may not be an issue, but given your proposed schedule, it looks like you will have a pretty high utilization of the plane.

When I bought my Aztec, I was considering partnerships. The primary reason I decided to be a lone owner was that I figured that my utilization would be such that it would be difficult for a partner to be satisfied with the availability, unless it was a partner who didn't actually want to fly.

 

[Everskyward]

Something you may want to consider with either of these agreements is how it would impact your use of the plane. On 135, it's probably a bit simpler since you're the owner and can just tell other customers that the plane's not available that day. If you have partners in the plane, how do you determine who has precedence when two of you want the plane? That may not be an issue, but given your proposed schedule, it looks like you will have a pretty high utilization of the plane.

The airplane I fly is owned by a large company which has it on my employer's 135 certificate. The arrangement works out well for them as far as I can see because they have been running their fleet of airplane that way for a long time with no apparent desire to create their own internal flight department. I don't know anything about the financial details but I do know that they approve every charter and only release the airplanes when they know they are not going to use them. Different owners have different desires and different contracts. I would talk to people who have airplanes under management contracts and get a lawyer who specializes in these things before you do anything and not just trust the management company/FBO. Also be aware that if the airplane flies 200 hours more per year it that it means 200 hours more wear and tear and 200 hours closer to inspections, etc.

 

[Skylane81E]

This is the deal-killer. Nobody other than the 135 guy makes money on charters.

This simply isn't true. Yes a poorly set up contract can be a killer for the owner but a good one works.

We pay the owner a fixed cost per hour every time we start the engines, that price simply needs to be set high enough to provide profit margins to the owner and low enough to allow us to charge the end user a fair price that allows s to make some money too. Te devil is in the details.

Our 135 owner makes more than we do.

 

[wabower]

Some unique opportunities exist with jets and turboprops that allow owners to get a bit more out of the deal than they might otherwise attain, but they are simply absorbing some of the fixed costs rather than making money.

For example, many of the engine-maintenance programs base their annual contract on a minimum number of hours per year whether flown or not. Chartering or dry leasing the airplane for those unflown hours can be beneficial since the owner pays no additional MSP, ESP or JSSI costs for those hours. As airplane usage numbers have declined since the 2008 meltdown, more owners are finding this strategy to be somewhat beneficial, with the dry lease far out-stripping 135 use as an economic benefit to the owners.

Some owners also like for the "operational control" of the aircraft to be shifted to the charter operator, but sustaing that argument has proven to be problematical and many owners are abandoning that tactic.

The airplane I fly is owned by a large company which has it on my employer's 135 certificate. The arrangement works out well for them as far as I can see because they have been running their fleet of airplane that way for a long time with no apparent desire to create their own internal flight department. I don't know anything about the financial details but I do know that they approve every charter and only release the airplanes when they know they are not going to use them. Different owners have different desires and different contracts. I would talk to people who have airplanes under management contracts and get a lawyer who specializes in these things before you do anything and not just trust the management company/FBO. Also be aware that if the airplane flies 200 hours more per year it that it means 200 hours more wear and tear and 200 hours closer to inspections, etc.

 

[kgruber]

Our 135 owner makes more than we do.

You must both be going broke then.

A King Air has too many unscheduled maintenance items that can eat up 1-2 hundred thousand dollars in the blink of an eye.

There are too many owners trying to pay for their turbine airplanes by running 135 to make it profitable.

A "chief pilot" position 135 is now pretty much a full time desk job. And, every day, the FAA makes it more "desk" intensive.

The whole idea of it makes me laugh.

 

[wabower]

Why do you think you know about the owner's economics? Do you moonlight as his CPA?

This simply isn't true. Yes a poorly set up contract can be a killer for the owner but a good one works.

We pay the owner a fixed cost per hour every time we start the engines, that price simply needs to be set high enough to provide profit margins to the owner and low enough to allow us to charge the end user a fair price that allows s to make some money too. Te devil is in the details.

Our 135 owner makes more than we do.

 

[ronnieh]

James, this is just my oppinion base on flying and manageing the Cheyenne IIIA. On the 135, run away, far away. The additional cost of maintaining a turbo prop to 135 will be substantial. That additional cost will eat up any chance for you to even break even. You will be wearing out a plane for nothing. If you will fly the plane as much as 200 hours / year you need your own plane IMO. There is only one way to make a small fortune with an airplane, start with a large fortune. The number of trips you show in your mission profile is going to make it tough to share a plane in any situation. The 300 is a wonderful airplane but, IMO you will be much happier with less plane and total operational control. You might make a partenership work if your flying can be scheduled weeks or months in advance. Otherwise you will have money tied up in a plane you can't get your hands on when you need it. Just something to think about.

 

[Everskyward]

Some unique opportunities exist with jets and turboprops that allow owners to get a bit more out of the deal than they might otherwise attain, but they are simply absorbing some of the fixed costs rather than making money.

That's the way I see it too. I don't think the owner would ever make money, per se, just defray fixed costs. There is one owner I knew who bragged he was making money but it must not have been true because his airplane went back to the bank.

 

[wabower]

If it were true, all the 135's would own their own airplanes. Since only a sliver of a percentage do so, what does that tell you about the financial opportunity?

That's the way I see it too. I don't think the owner would ever make money, per se, just defray fixed costs. There is one owner I knew who bragged he was making money but it must not have been true because his airplane went back to the bank.