cost of ownership

Richard Kaplan wrote:
"Dave Butler" wrote in message
...

Good job, Dude. My leaseback worked ok, too, when I had it. It was an

excellent

way for me to break into airplane ownership.

Did it make a profit outright or did it simply reduce the expense of
ownership? What kind of plane was it?

It was very thin one way or the other, close to break even. I intentionally
operated it that way. I saw it as as opportunity to get experience in ownership,
be in control of and aware of maintenance, and have a plane for me to fly with
minimal expense. Of course, as you know, the expense of ownership is so wildly
variable that even though my intent was to come close to breaking even, the fact
that I did so was mostly a matter of luck. It was a 1975 PA28-180 Archer.

The lease arrangement was such that I was responsible for providing an airworthy
aircraft, the club paid for insurance and provided scheduling, collection, and
screening of users, used it for instrument instruction.

The maintenance was done mostly by an FBO on the field for convenience, I didn't
shop for price. This is the primary airport in a class C, and I think the
maintenance rates were higher than they might have been at an outlying field. It
was maintained with the intent of maximizing dispatching availability, which
sometimes meant paying overtime rates.

In the beginning I had a partner, but I bought him out when he didn't want to do
it any more due to a medical issue.


How did leaseback affect your maintenance costs?

I can't give you a quantitative answer, but there were relatively few instances
where maintenance expense occurred because of obvious renter malfeasance. Since
the airplane was flying ~350 hours per year, the maintenance expense was spread
over way more hours than I could have achieved any other way.


Did you factor in the depreciation on your engine?

Yes. I overhauled the engine twice during my tenure of ownership. One field
overhaul at a boutique engine shop was a disaster due to the difficulty of
warranty service because of distance. The other was a field overhaul at a nearby
shop with new Lyc cylinders and was a more satisfactory experience. The current
owner is going through an overhaul right now, went for a reman.


Why did you stop the leaseback?

I was not flying due to some temporary medical difficulties. I had an offer from
another club member that looked attractive. Out of loyalty to the club, I wanted
the club to be able to continue to use the plane. The plane has changed hands
again since then, and is still on leaseback to the same club. I still fly it
once in a while.

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Dave

In article ,
Dave Butler wrote:

The lease arrangement was such that I was responsible for providing an
airworthy
aircraft, the club paid for insurance and provided scheduling, collection, and
screening of users, used it for instrument instruction.

The club paying for insurance is huge. Commercial insurance can easily
cost 3-4x the personal/business policy. That's also what makes it
impractical to let your airplane be used a "little" for instruction.
The insurance is so high you need a year's worth of solid revenues to
offset it.

--
Ben Jackson

http://www.ben.com/

Ben Jackson wrote:

The club paying for insurance is huge. Commercial insurance can easily
cost 3-4x the personal/business policy. That's also what makes it
impractical to let your airplane be used a "little" for instruction.
The insurance is so high you need a year's worth of solid revenues to
offset it.

When you say "club paying" you have to realize it is the end users that
ultimately pay the price. The cost of insurance has to be passed on to the end
users in some way, either in the hourly rate or in the monthly price of access
to the aircraft. I think it makes more sense to price it in the monthly rate, in
this case, club dues.

"Dave Butler" wrote in message
...

Yes. I overhauled the engine twice during my tenure of ownership. One
field

Well that might be a good argument in favor of leaseback. Most
single-pilot airplanes probably reach TBO by calendar hours way before they
reach TBO by tach hours. Getting revenue to support regular engine
overhauls is a big plus -- I would much rather fly IFR behind an engine new
by calendar hours than an engine low on tach hours but high on calendar
hours.



--------------------
Richard Kaplan, CFII

www.flyimc.com

Richard Kaplan wrote:
"Dave Butler" wrote in message
...


Yes. I overhauled the engine twice during my tenure of ownership. One

field

Well that might be a good argument in favor of leaseback. Most
single-pilot airplanes probably reach TBO by calendar hours way before they
reach TBO by tach hours. Getting revenue to support regular engine
overhauls is a big plus -- I would much rather fly IFR behind an engine new
by calendar hours than an engine low on tach hours but high on calendar
hours.


I agree but I hadn't thought of it as an advantage. Thanks for the insight.

Dave
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