Renegotiating Monthly Dues (Non-Equity Flying Club)

[talkingbob]

Hello fellow pilots!

I was wondering if anyone has successfully renegotiated monthly club dues in the DOWNWARD direction.
I am in a non-equity club that is one year old and comprises 4 pilots that fly a 172N. The owner technically could fly the plane as well, but typically does not. The owner has ZERO hangar/tie down fees and all pilots are listed on the owner's insurance. Currently, the monthly dues are $125 and the plane is $40/TACH Hr. dry (owner covers oil costs though). I love the plane, the other members, the hourly cost, etc., but the monthly dues seem very steep to me.

Has anyone successfully gotten a flying club to reduce the monthly rate and if so, how?

Thank you in advance for your advice.

 

[Scrabo]

Ever thought of adding one or two more members ?

 

[denverpilot]

That all looks pretty inexpensive really. It also sounds like you have some jealousy of the owner's "deal".

If it's not your cup of tea, walk away. If you want equity, and no dues for yourself, there's plenty of 172s for sale. Start another club with $100/mo dues and steal his renters.

At least you know where to find your first renters.

If you can't make the numbers work to pull that off, you will have educated yourself on why he's at $125.

 

[N801BH]

Hello fellow pilots!

I was wondering if anyone has successfully renegotiated monthly club dues in the DOWNWARD direction.
I am in a non-equity club that is one year old and comprises 4 pilots that fly a 172N. The owner technically could fly the plane as well, but typically does not. The owner has ZERO hangar/tie down fees and all pilots are listed on the owner's insurance. Currently, the monthly dues are $125 and the plane is $40/TACH Hr. dry (owner covers oil costs though). I love the plane, the other members, the hourly cost, etc., but the monthly dues seem very steep to me.

Has anyone successfully gotten a flying club to reduce the monthly rate and if so, how?

Thank you in advance for your advice.

Count your blessings... Those are great numbers...

 

[James331]

Hello fellow pilots!

I was wondering if anyone has successfully renegotiated monthly club dues in the DOWNWARD direction.
I am in a non-equity club that is one year old and comprises 4 pilots that fly a 172N. The owner technically could fly the plane as well, but typically does not. The owner has ZERO hangar/tie down fees and all pilots are listed on the owner's insurance. Currently, the monthly dues are $125 and the plane is $40/TACH Hr. dry (owner covers oil costs though). I love the plane, the other members, the hourly cost, etc., but the monthly dues seem very steep to me.

Has anyone successfully gotten a flying club to reduce the monthly rate and if so, how?

Thank you in advance for your advice.

Sounds like a really good deal to me too.

I'd say 125 a month while only paying 40hr, doubt they are going to lower it, if that seems high to you, you probably aren't flying the plane much.

The owner gets a better deal because he had to pay for the friggen plane

 

[35B33]

Monthly dues usually cover fixed costs - hanger, insurance, annual, and loan interest or lost income from having money in a plane and not in interest bearing investments. Fill in the blanks for us and we can better advise. Or, with a clearer view, you may not need our thoughts.

Who is doing the billing and scheduling and what would that cost if not done by the owner? Are there better deals out there or is a vacancy quickly filled?

Depending on the 172, you may have a great deal with none of the financial surprises that come with ownership.

 

[jbaker72157]

It's the opposite way at the local club here. Monthly dues are $39 and the 172 is $135 an hour, but that is wet rate. If you fly at least twice a month, your's is a pretty decent deal.

 

[talkingbob]

Thank you for the prompt replies everyone!
I am certainly not jealous of the airplane owner and actually have great respect for him.
It sounds like maybe I was economically off-base regarding the monthly costs of a non-equity club.

Plan "B" is to donate plasma to offset the cost of flying, so maybe I will just go that route...

 

[talkingbob]

Monthly dues usually cover fixed costs - hanger, insurance, annual, and loan interest or lost income from having money in a plane and not in interest bearing investments. Fill in the blanks for us and we can better advise. Or, with a clearer view, you may not need our thoughts.

Who is doing the billing and scheduling and what would that cost if not done by the owner? Are there better deals out there or is a vacancy quickly filled?

Depending on the 172, you may have a great deal with none of the financial surprises that come with ownership.

The owner of the airplane owns the airport, so no hangar/tie down expenses.
And yes, if the owner opened the accounting books to the members, it would clear up all of my questions.

Not sure what you mean by the cost of billing, but the scheduling uses a free website. Realistically, the cheapest rental in my area is $150/hr wet. The only other flying club in my area is a 6-7 member partnership that shares equity in a Supercub.
The 172 club is only a year old, but there have been no vacancies yet. As far as I can tell, there is no waiting list to join either...

 

[airdale]

... if the owner opened the accounting books to the members, it would clear up all of my questions....

From what I understand, in your situation you are more accurately called "customer" rather than "member."

Do you ask Amazon how much they make on your Prime "membership" ? How about your Costco "membership" ? Do you ask Home Depot to show you its cost on the lawn mower you think is too expensive? Of course not.

If buying from this airplane rental business is a good deal for you, keep it up. If not, leave. Same thing you'd do at Home Depot. Or at an FBO.

 

[igorek82]

Currently, the monthly dues are $125 and the plane is $40/TACH Hr. dry (owner covers oil costs though).

I don't know where you are located, but in my neck of the woods this is super cheap and you would never hear anyone complain. It's easy to find clubs with 2x the monthly and 3x the hourly and yet still plenty of members....

 

[talkingbob]

From what I understand, in your situation you are more accurately called "customer" rather than "member."

Do you ask Amazon how much they make on your Prime "membership" ? How about your Costco "membership" ? Do you ask Home Depot to show you its cost on the lawn mower you think is too expensive? Of course not.

If buying from this airplane rental business is a good deal for you, keep it up. If not, leave. Same thing you'd do at Home Depot. Or at an FBO.

Yes, technically members are "Leasees" and the owner certainly is making profit from the arrangement. Most clubs seem to be non-profit, so I'm guessing that this is a unique situation?

 

[ClimbnSink]

Nevermind the owner's profit. Is it a good deal for you? Only problem I see is if you don't fly every month you are going to resent the $125 even if it works out to a better deal year round. And that is just a personal thought problem, easily overcome. On the other hand you are paying to have access to a 172 for $40 bucks an hour which ain't too shabby. A note on the airplane would likely be more and you'd be on the hook for any mechanical misfortune.

 

[N801BH]

Nevermind the owner's profit. Is it a good deal for you? Only problem I see is if you don't fly every month you are going to resent the $125 even if it works out to a better deal year round. And that is just a personal thought problem, easily overcome. On the other hand you are paying to have access to a 172 for $40 bucks an hour which ain't too shabby. A note on the airplane would likely be more and you'd be on the hook for any mechanical misfortune.

Geez Greg.. This is the most "polite" way I have ever heard it put..

 

[Aztec Driver]

4 paying members? Insurance for 5 people and annual for a 172 would likely be very close to $6K. Not a LOT of profit there. This sounds like a reasonable deal to me.

Try feeding a twin once.

 

[frfly172]

Don't see a whole lot of profit in the numbers. $ 40 an hour is a great price, fly the airplane more,then you will appreciate what you have.

 

[talkingbob]

4 paying members? Insurance for 5 people and annual for a 172 would likely be very close to $6K. Not a LOT of profit there. This sounds like a reasonable deal to me.

Wow, I had no idea the yearly expenses could be that high. This is the sort of insight I was looking for.
Thanks!

 

[Aztec Driver]

Wow, I had no idea the yearly expenses could be that high. This is the sort of insight I was looking for.
Thanks!

My absolute minimum without turning the engines is about $8K. Granted, I have to pay hangar, and I have a twin retractable, but still, he is not asking too much for that aircraft.

 

[ChrisK]

Wow, I had no idea the yearly expenses could be that high. This is the sort of insight I was looking for.
Thanks!

Homestly there are cheaper rental options in other parts of the country for sure (i paid 72/yr and 67.50/hr wet for a 152) but so much of that is situational and depends on where you live...

 

[jtheune]

It's tough to say on the rates without knowing more about the plane. Does it have a IFR GPS? Weather? These things cost a lot of money yearly for the subscriptions. 40.00 per hour DRY seems like a lot for a 172. As for the insurance and annual I'm in a 5 way partnership on a 182 that is insured for 112K and our premium is 3500 a year. A 172 that is worth half that should be less.

 

[talkingbob]

It's tough to say on the rates without knowing more about the plane. Does it have a IFR GPS? Weather? These things cost a lot of money yearly for the subscriptions. 40.00 per hour DRY seems like a lot for a 172. As for the insurance and annual I'm in a 5 way partnership on a 182 that is insured for 112K and our premium is 3500 a year. A 172 that is worth half that should be less.

No IFR GPS or weather. The 172 is insured for 50K.

 

[SoonerAviator]

Look at it this way, not too many places renting a 172 wet for under $110/hr or so. You are doing it for about $81/hr not including the monthly fee. In reality, as long as you fly about 4 hrs a month, you break even versus renting. Fly more than that and you are money ahead, and it adds up quickly for you.

 

[mrkbbd]

Look at it this way, not too many places renting a 172 wet for under $110/hr or so. You are doing it for about $81/hr not including the monthly fee. In reality, as long as you fly about 4 hrs a month, you break even versus renting. Fly more than that and you are money ahead, and it adds up quickly for you.

Plus you KNOW who flew the airplane...and how it is maintained -

$125 / mo * 4 people = $500
*12 months = $6,000

On a $50k airplane, payment alone is probably more than $500
Insurance probably $2,500 / year, so call it $200 / month
Annual, probably averages been $1,500-$2,000, so call it $150 / month
This is a commercial airplane since you don't own it, so 100HRs are probably required too (if you guys fly it 100+hr in an annual year)...

Assuming the airplane is paid for, the owner is at a minimum $350 / month and you're paying $500 total...plus he's not flying it so he's basically giving you an airplane for free...where do I sign up?

Also take note, just because his tie down is "free" doesn't mean that...the airplane is opportunity cost, it is taking up space he possibly could rent out...

Sounds like since he owns the FBO he is hoping to make money on the fuel you burn...

 

[mtuomi]

$50k for 172N sounds a bit overinsured, especially if it only has the basic avionics.
Still, you have a cracking deal. With plane rentals you usually get what you pay for. I used to rent a 172P with over 18000 hours and with absolutely no equipment that works, for just under $100 per hour. And that was cheap.

 

[airdale]

... Most clubs seem to be non-profit, so I'm guessing that this is a unique situation? ...

You're still not quite getting it. It's not a club. It's a business. Exactly the same business structure as Costco except the dues are paid monthly rather than annually.

By buying a "membership" you get the right to shop at the business. That's all.

 

[JeffDG]

The owner of the airplane owns the airport, so no hangar/tie down expenses.
And yes, if the owner opened the accounting books to the members, it would clear up all of my questions.

The owners costs are not strictly relevant. He's under, within rounding error, zero obligation to show you his books.

A fair price is whatever he can get folks to pay, regardless of his own costs. If the market price makes him a profit, so be it. The question for you is: Is this a reasonable cost for me to pay. That question does not turn on what it costs the owner, but on your circumstances.

And just because he's the owner of the airport, that doesn't mean the hangar/tiedown are free. He's incurring an opportunity cost by not having those available to rent to others.

 

[James331]

4 paying members? Insurance for 5 people and annual for a 172 would likely be very close to $6K. Not a LOT of profit there. This sounds like a reasonable deal to me.

Try feeding a twin once.

Must have bought a pile of crap.

Insurance and annual for 6k a year

I pay less than that for a 185 amphib.

 

[talkingbob]

Thanks again everyone. I've had now 10 people on this forum say that it's a good deal and it's not overly high monthly dues.