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  #1  
Old September 22nd 03, 03:16 AM
Jim Howell
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Default 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  
Old September 22nd 03, 05:48 AM
ks_av8r
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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  
Old September 22nd 03, 05:57 AM
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Default


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  
Old September 22nd 03, 07:55 AM
Scott
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Default

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.



---
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Checked by AVG anti-virus system (http://www.grisoft.com).
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  #5  
Old September 22nd 03, 02:09 PM
David Megginson
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Default

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  
Old September 22nd 03, 11:49 PM
ks_av8r
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Default


"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  
Old September 23rd 03, 12:11 AM
David Megginson
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Default

"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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