"Andrew Gideon" wrote in message
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On Fri, 25 May 2007 11:08:26 -0500, Dan Luke wrote:

So I ran a few
numbers to see how buying and renting the same model airplane would
compare, based on costs here in Mobile:

I've a problem with your numbers; I don't see how they can be correct.
It's not any specific number you've described, but the overall sum.
Essentially: how can the two work out to anything but the rental costing
the same or more?

Both aircraft are insured (and, apples to apples, I assume they're insured
identically). Both would have the same hourly into engine/paint/interior
reserves. Both use the same fuel and oil. both get the same annual, etc.

Renter's insurance is an added expense on the rental side, as is funding
the 100 hour inspections.

You're right that the renter avoids financing costs (whether aircraft is
bought for debt or cash).

The renter pay ALL costs, including financing (unless the club/owner paid
cash).

What would be different, possibly by way of being more diversified, would be
the fixed costs. For instance, how many rental aircraft are hangared? Fixed
costs are going to be lower per hour as a rental aircraft is used more
often, usually by orders of magnitude. It's this that makes renting more
economical if the utilization is MUCH less with ownership.

But the owner of the rental presumably knows
this and figures it into the hourly, making the per hour charge for the
rental slightly higher.

A rental aircraft is still owned and the owner needs to recoup their costs
as well as make a profit.

What am I missing that would "break" what I've described?

Possibly insurance, as a rental aircraft has to be insured for various level
of pilot experience. If you have 2000 hours as an owner, the rentor still
has to cover for someone with 100 hours. Also, possibly, the 100 hour
inspections that an owner isn't required to perform...