On Thursday, June 6, 2013 4:44:00 PM UTC-4, noel.wade wrote:

Additionally, how do we expect clubs (or small partnerships) to
acquire aircraft or make capital/fleet improvements, if they cannot
find reasonable financing?

A club that I know first hand recently placed notes (loans) with multiple members for $3000 each at 4% to finance a new glider. Club members can be counted on to be a lot more flexible about repayment than any bank would be should income fall below projections. Given current CD rates, members are pretty happy to get 4% on the note. This club has realistic dues and rental fees and therefore a good historical cash flow, so I feel quite secure holding a note (and I get XC coaching in a new two place glider).

The mistake that I've seen two other clubs make is that they set dues and glider rental fees unrealistically low, so there is no positive cash flow. Since the club gliders are deteriorating, these clubs are in a slow death spiral. If they set the rental fee for the SGS 2-33 at $20 a flight, they would have a positive cash flow. If students canceled their cable TV bill, they could easily afford $70 a flight compared to the current $55. If the CFI-Gs would embrace Condor, fewer tows would be needed, more students could be accommodated, and the total cost of learning to fly a glider work about to be about the same as the current low and unrealistic rental fee system.