As soon as you start your first lesson towards a private pilot license, it is a safe bet to say that you are thinking about owning your own plane (it might have been long before then). As they say, you’re never really “not owning” an airplane, you’re simply in-between airplanes. At the same time, ownership (just like everything else in aviation) can be very expensive.
One thing many pilots do in order to reduce the cost of flying is to join forces with other fellow pilots. This is known as a partnership or a flying club, and it’s the road I decided to go about a year ago. This post is about the process I went through while joining my (first) partnership, as well as some of the financial rationalizations (or the impression thereof).
Let me start with a short disclaimer: I actually don’t own an airplane (or a share thereof), I own a share of a corporation who owns an airplane, and that ownership of the share allows me to use the airplane at cost.
When I was finally ready to make the big jump from renting to “owning” a share of an airplane, I started looking around. There are many places you can find a very expensive toy, but because I was looking at something local, the easiest was to check the board at the Rockcliffe Flying Club. I also talked to a few people I knew around the field.
I also started documenting what to look for, what the process is. There are a few books available on the subject. While most of them are written for US pilots such as ASA’s “Buying and Owning your own Airplane” book, they still provide a good overview for aviators outside that country. Another great resource is the Ownership forum at the Rockcliffe Flying Club if you are in the Ottawa area.
As you learn quickly from that documentation gathering process, you need to start defining the “mission” and also get an idea of the budget you can afford. There are many options available out there, but if you don’t set goals and constraints, you can go all over the map. In my case, I wanted a plane to ultimately go to places with my family (3 people plus luggage), but also be able to get my IFR rating with at least a WAAS GPS and a second VOR for navigation.
Once you have an idea of what you are looking for, you start making selections of potential partnerships. To help me with my selection, I created a document that I (partially) filled out for each interesting plane I wanted to find out more. That document includes:
- Pros & Cons of the airplane share
- General airplane information
- General partnership information
- Insurance information
- Ongoing costs / expected costs
- Fixed and variable costs
I ended up not covering quite a few of the questions, but you can find the full document below (Microsoft Word format) so that you can create your own check list.
One of the things that is always recommended when purchasing an airplane is to do a pre-purchase inspection. While some people debate this when you join an existing partnership as the other partners will still be there, I would recommend you still discuss this with them. I would consider the comment that a pre-purchase inspection is not needed as a warning sign (which might be totally unjustified).
The other part of the process, which can be helpful as a basis for lengthy discussions and might serve as a dubious justification for your spouse, is the cost calculation. I have a tendency of analysing numbers through a spreadsheet (must be a side effect of my day job). I looked around for an existing model and was able to find a few that focus on the creation of a partnership (there is a great one on the AOPA web site), but I didn’t find one which would get the view of me joining an existing partnership.
Assuming a given initial cost per share and a given number of partners, plus considering the different shared costs such as insurance, tie-down, annual inspection, maps, … I created a spreadsheet that gives a model showing when you start to be better off owning a share vs. renting an airplane at the local flying club. That model then gives you nice graphics showing the break-even point. In the example below:
- There are 6 partners
- The share price is set at $12,000
- The “loan” will be re-paid over 6 years at 0% interest (from savings)
- The total yearly costs are at about $10,000
- There is an engine fund being built, and the plane takes 9 GPH.
Putting all the numbers into the spreadsheet, you get following:
In other terms, if you fly over 5 hours per month for the first 6 years, you will be better off owning a share than renting. Year 7 and beyond, you will be better of if you fly 2.5 hours or more per month.
One thing to keep in mind is that this model only looks at expected costs. Ownership means you are also responsible for all the “surprises” that will come along the way (and I guarantee there will be some based on my first year of experience). This is not taken into account in this model, but then again, I am also not taking into account the advantage of being able to fly somewhere for a week holidays in the summer and leave the plane at the destination airport.
Here is the full spreadsheet if you want to plug in your own numbers and find out for yourself how things look like (I make no warranty that the calculations are correct by the way): http://sdrv.ms/1dj46wy
And as they say in the ads: the smile on your face when you get the keys of “your” airplane is priceless
Happy flying and blue sky!