Cost of aircraft ownership?

[68volksy]

Non-Cash Costs

 

Opportunity Cost (6% of $65,000)

 

Depreciation (variable based on hrs)

 

Cash Costs

 

Registration

 

Insurance

 

Engine Overhaul Sink Fund (1,500 hrs)

 

Propellor Sink Fund (2,000 hrs)

 

25 hour Oil & Filter Change (L2)

 

100 hourly (L2)

 

200 Hourly (L2)

 

Engine 500 hour top end overhaul

 

Maintenance (ADs, tyres, Instruments, Misc)

 

Hangar hire (month)

 

Fuel 15L/hr @ $2.30

 

 

[68volksy]

That's the simple list (this one actually prepared by a guy we cross-hire an aircraft from). We have a spreadsheet where we plug in the different annual hours and it spits out the hourly cost for us. We use this to determine the break-even hours and then can play with the margins until we get the figures we're comfortable with. We work backwards in that we determine the profit that we need to make in order to justify the work we put in (determined the type of business and hours of work that was desired as part of this). We then work the margins towards gaining that figure and add the instructor pay rates on top.

 

 

[M61A1]

Gliders are built a lot more simply than "real" airplanes. They don't have a heavy motor on an engine mount for a start. The bouncing from trailering may be about the same magnitude as a normal heavy-ish landing, but unless you do about 3,000 heavy landings a day, it's not quite the same as trailering (for any distance that is). Also, the bouncing that an airplane gets on a trailer (especially on our brilliant highways) is a LOT worse than what you are experiencing in the car.It's really NOT a good idea trailering aircraft.

If your trailer is built properly, you will have no problems. The springs need to be lighter, or use airbags and all bits and pieces secured firmly with abrasion protection. You shouldn't just use any trailer because the harsh springing used in the most basic of box trailers is too stiff, that's what will do your damage.

 

 

[turboplanner]

If the unsprung weight of the trailer,plus the load adds up to about 65% of a multileaf spring capacity, and from your Weight and Balance knowledge you place the axle to distribute 10% of the total weight on the tow ball, and you have plenty of bump clearance so the trailer doesn't bottom, and you fit a soft set of shock absorbers, you'll have about the same ride as a furniture van, so minimal rubbing and banging.

 

(With a bit of luck this might mean nothing more than taking a leaf out of the existing spring pack to reduce its capacity to suit the 65% requirement)

 

 

[Gentreau]

Non-Cash CostsOpportunity Cost (6% of $65,000)

Depreciation (variable based on hrs)

 

........

Thanks very much for sharing that, it's always good to see somebody else's list in case I've overlooked something.

 

I guess in the case where we borrow the capital, then the interest payments replace the opportunity cost.

 

I wonder what rate of depreciation you use, as the actual rate seems relatively low for aircraft after the initial "out of the dealership" loss.

 

My impression is that the longer you operate an aircraft, the less the overall depreciation.

 

 

[68volksy]

You could use the interest rates instead of the opportunity cost. Just be careful as many people factor in the loan repayments and not just the interest portion. Loan repayments very useful if comparing these things on a cashflow basis though. Depreciation is a funny one really. For the GA aircraft we don't factor any in at all. The depreciation above was included for a new J170. We also assumed that after the initial loss the depreciation would decreases substantially. We were a little in the dark about appropriate depreciation for the Jabiru. For the Warriors there's 60 years of data out there so it's very straight-forward. Personally I'm a bit dubious that a Jabiru would still be 100% after 20,000 hours of flying so a depreciation rate to factor that in would be appropriate. The opportuntiy cost is a very important factor if cross-hiring the aircraft as it allows for the aircraft owner to make a margin they consider appropriate.

 

 

[Herm]

Well for me it's not just about the cost of ownership, but the price on not owning your own. It is difficult to price time and availability and the knowledge the aircraft is safe. Most of us have a budget in order to keep us from loosing the house LOL, but for me it's about value for money. What advantage will I get from ownership? And do I find that good value for my money. The thrill of owning my own aircraft that I can polish when I want (Turtle Wax). Fit what I want in it and fly it when and how I want. This is how I decided If I wanted to own my own aircraft. Sure I needed to purchase within my means rather than my total wants. That's why I don't own a twin with auto-pilot Hire and fly is not for me, and it would most likly end my flying if I had to operate that way. I am sure I have not been able to get full understanding from all of you, no more than I could with the Wife. Woops

 

Mardy

 

 

[Mick]

As someone else has mentioned above, to me it is about perceived immediate costs. My insurance & hangar costs are done by automatic bank transfer ( out of sight, out of mind ), so I only "see" the cost of buying fuel and parts/oil when a service is due. I do my own servicing so no labour costs. If I had to pay out $150-200 per hour as I fly each time too often it would seem like I can't afford that this week.

 

For most of my time flying there have not been RAAus aircraft readily available to hire where I have lived.

 

I also like to travel and there are not many RAAus aircraft available anywhere that you can take away for a week or two and only fly 10-12 hours in that time.

 

 

[rdarby]

To me I have to fit into a strict budget, which is $500 a month for flying. That means about 3 hours a month.

 

I don't believe buying is worth it financially, unless you have a monthly budget of quite a bit more than mine.

 

But I am in a situation now where I have to find somewhere else to hire, as the plane is being sold. That means retraining on another plane. Hence some of my questions on the forum lately. I don't want to retrain, and if you hire I can see it happening every few years. There are a LOT of RAA types out there, you can't just settle on a Cessna 172 and fly an identical one for 30 years. I am starting to feel what Herm is talking about a lot at the moment.

 

My calculations were:

 

Fixed costs, these happen each year just to own it, but not fly it:

 

Capital costs. $4,200 based on $350 a month repayment or money not put into your mortgage etc.

 

Hangar. $2340 based on $40 a week.

 

Insurance. $1,500

 

Registration $180

 

This is $8,040 a year. That is $670 a month. Not in the air yet.

 

Then the hourly costs:

 

Fuel. $23

 

Engine replacement $15

 

Maintenance $10

 

This is $48 an hour.

 

At 100 hours a year this is $128 an hour. Sounds good so far.

 

But if you work it out as a monthly cost, it's $1,070.

 

You then also have the hassle of having to maintain the thing. Easy for some, but not for others.

 

I just can't find a way of getting these numbers down to $500 a month, unless I lower the capital costs to a point that I don't care. That would mean buying an aircraft that is costing say $10,000 to $15,000. I can mentally cope with losing that from savings, as I think I can rebuild it.

 

Then I have to cope with not cruising to Natfly in 5 hours in a leather seated 100kn sportStar, but rather have something that I can do circuits etc. in but not a lot else. It's still flying but it's hard to give up the luxuary.

 

I am currently studying the GA exams, and booked in at GoFly for conversion lessons to a CTSW, but I still wonder if I will only get peace of mind if I buy something. Anything! I think if I found a hangar close by it would force me to put something in it!

 

In summary, we are all different, spend different and want different.

 

Ryan

 

 

[dazza 38]

Hi Ryan, Iwouldnt worry too much about retraining. It would only a take a 1 hour check ride to go from the sportstar you are flying now to a Tecnam (as a example).

 

 

[rdarby]

I hope so Dazza! I'm going to give the CTSW a try though.

 

 

[dazza 38]

I hope so Dazza! I'm going to give the CTSW a try though.

That would be a nice aircraft I think Ryan .

 

 

[Kyle Communications]

Ryan

 

Most everyone who owns their own aircraft are around the 45 plus age. By then you have got a lot of stuff either padded down or locked away and life is a bit easier and you have more available cash. Then again they are usually trademsna or professionals who earn above the average wage.

 

When I bought my first house at the age of 24 I had bean bags for furniture ..if you know what they are and a give away small dining table and 3 chairs and a old second colour tv that sat on a wooden packing crate...yes it was colour back in 1983 but hadnt been around that long. I had those bean bags for the next 3 years and the same dining room table except I bought some more old chairs it didn't matter they didn't match. The younger ones today want it all NOW. The flash house fitted out with beautiful furniture and big 3D 1080P 50 inch TV dont forget the new car

 

You have to walk before you can run...we have all been through this its only been these last 10 or so years that I have had the disposable income to do pretty much what I wanted. Until then you do whatever it takes to keep you flying. Working overtime to be able to afford it or a second job...I dont know what you do or where you work but a champagne diet on a beer mans wage is never possible in the long term. Owning and flying your own aircraft is just the best feeling but you do have to have the means to support it.

 

Make a plan and look further over the horizon and taylor the flying to make it acceptable until the time you can actually afford the feeling you get to be able to build and or buy your own aircraft...just be more patient..all good things come to those who wait...and work

 

Mark

 

 

[Guest nunans]

I have to cope with not cruising to Natfly in 5 hours in a leather seated 100kn sportStar, Ryan

The $500/month plane is definately doable,

 

It won't be a $100k+ aircraft but it will let you fly alot of hours for cheaper than hire cost.

 

It might mean that once a year you hire of fill a seat in a sportstar to natfly, or who knows you might just get more satisfaction out of flying there in 8hrs in your own pride and joy.

 

It's hard to have everything, I'd love a super cub for stooging around, some retractable fast thing for going long range etc etc, but instead I've got a little cheapy that gets me up and about for minimum dollars and everything else I'd have to hire on a one off basis at the time and let somebody else worry about the opportunity cost on thier half a house priced ultralight.

 

 

[dodo]

Volksy,

 

what does it cost to keep an aircraft at Goulburn now? Hangarage, landing fees, airside fees?

 

And is likely to to be relatively stable? I would hate to be vulnerable to further pricing changes or changes in conditions.

 

dodo

 

 

[68volksy]

Hi dodo,

 

Hangerage from $40-70 per week. Landing fees are as arranged with the guy currently leasing the airport from Council. For the school it's $20 every time we call full stop - for everyone else it's different (some of the RA-Aus guys haven't paid a cent). Parking on the grass is $6 per day (only paid parking in Goulburn!) with an annual fee as arranged with the lessee.

 

Stable is the real question. Current guy is leasing airport for $500 per year from Council and has an option to purchase the airport which he has not yet taken up. The option expires next September (2013) as does the current lease. If he finds $2.5million to exercise the option then things will no doubt change. If he doesn't the council will figure out another way of trying to sell it to him...

 

 

[rankamateur]

Is the leasee a shire coucillor, how else can you lease a $2.5 million council asset for $500 per annum?

 

 

[Gentreau]

Is the leasee a shire coucillor, how else can you lease a $2.5 million council asset for $500 per annum?

I suspect he is also saving the council all the maintenance costs, as well as paying them $500.

 

Guess that would add up to a fairly substantial sum overall....

 

.

 

 

[Ultralights]

Savannah ownership costs me ..........

 

paying off the loan $920 Month

 

Hangrage $300 Month

 

then a constant deposite into a seperate operating account for the aircraft to cover all costs, including fuel, insurance, maintenance etc.

 

$800 a month

 

with these costs, we have been able to cover everything easily..

 

average use has been about 200 hrs a year.

 

 

[J170 Owner]

A hangar fee of more than about $25 to $30 a week would require that the hangar have power, water, gas, a band that plays requests, a bar, dance floor and air conditioning. Perhaps pole dancers as well. I loathe greed.

 

 

[68volksy]

I suspect he is also saving the council all the maintenance costs, as well as paying them $500.Guess that would add up to a fairly substantial sum overall....

.

Maintenance costs? The grass has been fully mown twice in the past 12 months and apart from that there's no maintenance to be done. Council resealed the runway at a cost of about $450k prior to signing over the lease so it's good for many years.

 

He's not a councillor but has some very good "friends" on Council staff is the general feeling. One or the other has been trying to "sell" it to him since 1996 when it was given to Council from the Commonwealth. He was meant to have paid $250k for the "Option to Purchase" however from what I can tell no money changed hands but a "Guarantee" of some sort was put in place. The whole deal was unbelievably complicated considering it was really only the sale of a 40 hectare parcel of land!

 

 

[M61A1]

Thanks, but I'm more interested in the cost once I've purchased the aircraft. Ball park is good, $2000? $4000? $6000? Per year?

The cost will vary wildly, depending on your skills and the type of aircraft you buy. For example, I have a 95.10 that owes me a bit over $5k, lives in a trailer ( no hangarage), not worth insuring, 98 octane mogas @ $1.70 a litre or $10.20 an hr, oil & filter $30 for 25 hrs. I will probably re-engine if the Guzzi wears out, so I don't know what engine wear equates to, but I can tell you total engine cost will not exceed $3k. I do all my own maint.

The other side of the coin is $100k for an aircraft + truckloads of insurance, hangarage & maintenance. If the $500 a month mentione previously is acceptable to you, all good, if not, educate yourself, you'd be surprised just how cheaply you can fly if you're willing to do stuff yourself.

 

 

[dodo]

Thanks Volksy.

 

Interesting - much as M61 points out - if you can avoid the costs and issues around where to fly from (plane in a trailer and fly from a mates field, for example), that can remove a fair amount of annual outgoings.

 

And keep the capital component low, both for interest/opportunity costs and for insurance, unless you really need the expensive aircraft, in which case GA looks good.

 

dodo

 

 

[boingk]

Volksy,what does it cost to keep an aircraft at Goulburn now? Hangarage, landing fees, airside fees?

 

And is likely to to be relatively stable? I would hate to be vulnerable to further pricing changes or changes in conditions.

 

dodo

Hi there mate I'm hangered out there with Tony Lamara - also runs the antique/secondhand store in town across from Woolies and owns a C172. He charges $50 week for hangerage and it has basic utilities; water, mains power and a sideroom for having a cuppa etc.

 

No idea on price stability.

 

you'd be surprised just how cheaply you can fly if you're willing to do stuff yourself.

Bingo. I'm currently flying my little Minicab and am in the process of sending off my Level 2 application - til now its being done by the hangar boys with me guiding them through anything they're unfamiliar with (not much!). I figure its a somewhat higher-level craft than I can reasonably afford so am selling and 'tactically reapproaching the situation'.... otherwise known as downgrading.

My up-and-coming ride will most likely be similar to yours in that it'll use not much Mogas or oil, and should be trailerable. Otherwise I can always make a 300m strip out at the local farm and bang together something out there to keep her in... even an old shipping container would do.

 

Cheers - boingk