Thrust selling its 172s

[SFDukie]

From an unknown Reddit poster.
Seems legit. Also seems like insane pricing.

 

[AV8R_87]

I think those are "my wife wants me to sell the plane" prices.

 

[asicer]

As eye-watering as it may be to you and me, prices don't seem that outrageous for flight school fodder in the 1-5 year old range.

 

[pfarber]

Someone do the maths for me... how does renting a $500,000 asset for $200 an hour pay the bills?

 

[Lindberg]

Someone do the maths for me... how does renting a $500,000 asset for $200 an hour pay the bills?

If you rent it an average of 300 hrs/yr, that's a gross rent multiplier <9, which could be reasonable for a non-depreciating asset, which these basically are. And if you're running a flight school, you're probably driving other revenue sources as well.

 

[Sierra_Hotel]

Saw it on Reddit and chuckled heartily.

 

[SFDukie]

As eye-watering as it may be to you and me, prices don't seem that outrageous for flight school fodder in the 1-5 year old range.

What seems crazy to me is Cessna is making new ones even with glass panels- aren’t they available for $600k?

 

[Ventucky Red]

I think those are "my wife wants me to sell the plane" prices.

Well to give them some slack, they are right down the road from Van Bortel... must be something in the water down there...

 

[Ventucky Red]

What seems crazy to me is Cessna is making new ones even with glass panels- aren’t they available for $600k?

And from I have heard, there is a two year wait.. I don't know if the are backlogged with orders, or they are putting together a grouping to do a production run.

 

[asicer]

If you rent it an average of 300 hrs/yr, that's a gross rent multiplier <9, which could be reasonable for a non-depreciating asset, which these basically are. And if you're running a flight school, you're probably driving other revenue sources as well.

I seem to recall someone here with a lease-back in a busier part of the country mentioning upwards of 600 hrs/year.

 

[Cap'n Jack]

If you rent it an average of 300 hrs/yr, that's a gross rent multiplier <9, which could be reasonable for a non-depreciating asset, which these basically are. And if you're running a flight school, you're probably driving other revenue sources as well.

It's been a while since I had any accounting classes, but don't they also get a tax write-off for depreciation, even if said depreciation is a fiction such as accelerated depreciation?

 

[Ventucky Red]

It's been a while since I had any accounting classes, but don't they also get a tax write-off for depreciation, even if said depreciation is a fiction such as accelerated depreciation?

Are you referring to modified accelerated cost recovery?

 

[Anthem]

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[Cap'n Jack]

Are you referring to modified accelerated cost recovery?

I might be- I had a class in financial accounting, and a class in managerial accounting a long time ago. I won't pretend to remember it properly, and the terms may have changed. It was more of a tax thing, IIRC.

 

[Lindberg]

It's been a while since I had any accounting classes, but don't they also get a tax write-off for depreciation, even if said depreciation is a fiction such as accelerated depreciation?

Yes, but that can boomerang if you sell and it hasn't actually depreciated (not a CPA or tax lawyer).

 

[Ventucky Red]

Yes, but that can boomerang if you sell and it hasn't actually depreciated (not a CPA or tax lawyer).

Selling a MACRS asset before full depreciation triggers depreciation recapture, taxing past deductions as ordinary income. There are no "penalties," but the recapture can lead to higher tax liability. Properly calculating adjusted basis and allocated depreciation is critical to determine the recapture amount.

Not for the every day Joe...

 

[pfarber]

If you rent it an average of 300 hrs/yr, that's a gross rent multiplier <9, which could be reasonable for a non-depreciating asset, which these basically are. And if you're running a flight school, you're probably driving other revenue sources as well.

gross profit is meaningless. can they net a profit?

I've read that some schools fly sr20s for primary flight. CW flight school quotes $38k for ppl in a Cirrus. They must be making money or if not it's a advertising stunt.

ATP is using 2025 172s... but they also are in the highest cost schools.
They also charge $117,000 for ratings up to CFI.

mom and pop/locals.... nope,gonna need to see some net numbers

 

[3393RP]

gross profit is meaningless. can they net a profit?

I've read that some schools fly sr20s for primary flight. CW flight school quotes $38k for ppl in a Cirrus. They must be making money or if not it's a advertising stunt.

ATP is using 2025 172s... but they also are in the highest cost schools.
They also charge $117,000 for ratings up to CFI.

mom and pop/locals.... nope,gonna need to see some net numbers

The GRM has nothing to do with net or gross profit.