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#1
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Partnerships
Hello,
I'm new to flying and considering purchasing a plane with another studen pilot. Can anyone point me to sample partnership agreements and/or arrangements? I would like to know how the expenses are generally shared particularly for the case where one partner flies more than the other. Thanks. |
#2
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Our partnership has worked well for many years. Each partner pays monthly
"dues" for fixed costs. This includes hangar rent, insurance and miscellaneous maintenance such as oil changes, wash jobs and the annual inspections. Items that are hour related, such as overhauls, prop overhauls and engine components that need replacing due to hours of service, are prorated by hours flown. The airplane is always full of fuel and when you return it, you fill it. The biggest item, is the partners must be congenial with one another and be dutiful about paying their "dues" in a timely manner. If one partner has to carry the load of someone else, things will ultimately get testy. Good luck! "Jim Howell" wrote in message ... Hello, I'm new to flying and considering purchasing a plane with another studen pilot. Can anyone point me to sample partnership agreements and/or arrangements? I would like to know how the expenses are generally shared particularly for the case where one partner flies more than the other. Thanks. |
#3
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On 21-Sep-2003, Jim Howell wrote: Hello, I'm new to flying and considering purchasing a plane with another studen pilot. Can anyone point me to sample partnership agreements and/or arrangements? I would like to know how the expenses are generally shared particularly for the case where one partner flies more than the other. There are lots of different ways that co-ownerships can be arranged. One typical agreement would have partners share equally in fixed expenses (hangar/tiedown, insurance, annual inspection (at least the inspection part of it), etc. Each partner pays for fuel used. Other expenses such as maintenance and reserve for engine overhaul may be at least partially pro-rated based on relative usage. Assuming that you carry adequate liability insurance and the plane is for personal use (including personal business) I don't think there is any reason to incorporate. Properly handled, a co-ownership arrangement will provide nearly all of the benefits of sole ownership at a far smaller cost. This assumes that individual usage is below 150 hrs/year. Above that figure the cost advantages of co-ownership become smaller. -- -Elliott Drucker |
#4
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My recomendation is to spend the extra $500 to get a lawyer and write it up
to be incorporated. Either that or do a limited liability partnership. Talk to a lawyer or someone experienced to convice you of this. "Jim Howell" wrote in message ... Hello, I'm new to flying and considering purchasing a plane with another studen pilot. Can anyone point me to sample partnership agreements and/or arrangements? I would like to know how the expenses are generally shared particularly for the case where one partner flies more than the other. Thanks. --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.512 / Virus Database: 309 - Release Date: 8/19/2003 |
#5
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Jim Howell writes:
I would like to know how the expenses are generally shared particularly for the case where one partner flies more than the other. As others have mentioned, the most typical approach is to share fixed expenses evenly and to pro-rate variable expenses according to the number of hours flown. For example, if you flew 140 hours next year and your partner flew 60, you'd pay 50% of the insurance, 50% of the tiedown or hangar, 50% of the annual, 50% of unscheduled maintenance expenses, 70% of oil, 70% of fuel, and 70% of the engine overhaul reserve. Paint/interior and avionics reserve could go either way. That might seem unfair to the partner who flies less, but it's not, really: 1. The main difference between owning and renting is the convenience of having the plane available to you. Both partners -- the one who flies more and the one who flies less -- have the same availability. Think of the fixed costs as the price of having a plane on call. 2. Planes have to fly a lot to be healthy -- if you don't fly the plane enough between you, it will sit on the field with the engine corroding, and you'll both end up paying a lot more to keep it. Even though my Warrior is cheap to operate, I will go looking for a partner if I ever find myself flying less than about 100 hours/year, just because of #2. Planes have to fly (that's why flying school planes often make TBO or better, despite the horrible abuse they endure). All the best, David |
#6
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"David Megginson" wrote in message ... Jim Howell writes: snip As others have mentioned, the most typical approach is to share fixed expenses evenly and to pro-rate variable expenses according to the number of hours flown. For example, if you flew 140 hours next year and your partner flew 60, you'd pay 50% of the insurance, 50% of the tiedown or hangar, 50% of the annual, 50% of unscheduled maintenance expenses, 70% of oil, 70% of fuel, and 70% of the engine overhaul reserve. Paint/interior and avionics reserve could go either way. That might seem unfair to the partner who flies less, but it's not, really: 1. The main difference between owning and renting is the convenience of having the plane available to you. Both partners -- the one who flies more and the one who flies less -- have the same availability. Think of the fixed costs as the price of having a plane on call. 2. Planes have to fly a lot to be healthy -- if you don't fly the plane enough between you, it will sit on the field with the engine corroding, and you'll both end up paying a lot more to keep it. Even though my Warrior is cheap to operate, I will go looking for a partner if I ever find myself flying less than about 100 hours/year, just because of #2. Planes have to fly (that's why flying school planes often make TBO or better, despite the horrible abuse they endure). All the best, David Very well stated. The only thing I would add to number 1 are the following: You use the same equipment and get more familiar with it as opposed to flying rentals. You know the maintenance history. Usually no "per day minimums" if you want to take it overnight. Plus a well maintained used aircraft will generally increase in selling price so the money spent on the original purchase can often be considered an investment. Thanks for your comments Denny |
#7
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"ks_av8r" writes:
You use the same equipment and get more familiar with it as opposed to flying rentals. You know the maintenance history. Usually no "per day minimums" if you want to take it overnight. That's an excellent point. After only nine months of ownership, I am already terrified to think how little I knew not just about the specific planes I was flying, but about planes in general. When I bought my Warrior, I couldn't even have shown you where the vacuum pump and carburetor were with all the cowling removed, and I don't think that my instructors could have either. Taking care of a plane is the *other* half of flying. Plus a well maintained used aircraft will generally increase in selling price so the money spent on the original purchase can often be considered an investment. Possibly, though prices have been level or declining on a lot of used aircraft recently (of course, so have many stock prices). All the best, David |
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