While listening to the inimitable Clark Howard, a popular radio personality who offers financial advice, I learned an interesting tidbit of information. It seems auto loans are being taken out for longer and longer periods of time. The average auto loan is now in the five and a half year range, but some extend for as many as seven years. Seven years! For a car loan. Consider me amazed.
Of course the allure of the long term loan is its ability to lower the monthly payment to the point where a potential buyer can afford a car they otherwise could not possibly squeeze into their budget. The downside is less apparent. By extending the length of the loan the buyer increases the amount of interest paid. Rather than paying the agreed upon price for the vehicle, they pay thousands more in additional interest payments.
You see the hook, I’m sure. The dealership offers $1,000 cash back on the purchase. The buyer salivates. They sign on the dotted line and pay back the finance company several times the cash back value in interest. Everybody’s happy, except the buyer, who may one day figure out how they hoodwinked themselves by doing what everyone else does.
Following the crowd is seldom a good idea in the long run.
Now let’s take that same purchasing quandary and move it into the realm of aviation. We could follow the crowd here, too. We could accept the common perception that flying is too expensive. And why not? With new aircraft costing six figures, it can be difficult to justify the purchase of an item that may well cost more than your home.
But is it really necessary to spend that much to fly? No, no it’s not. It’s conventional, but it’s not mandatory.
Like the individual looking at the purchase of a new car, we have to get outside the standard thought patterns to find real value and real opportunity in aviation.
If the average pilot flies approximately 100 hours a year, that equates to slightly less than two hours a week. Logic suggests that if 10 pilots operated the same airplane over the course of a week, it would still only add up to 20 hours of actual flying. For the sake of practicality, let’s say the pre-flight, post-flight, fueling, and maintenance take an equivalent amount of time. That runs us up to 40 hours per week invested in an airplane being flown by 10 different people.
How expensive is the purchase of that airplane when the costs are shared by 10 people? If you run the numbers, you will see flying starts to become fairly affordable. Not cheap. No, certainly not cheap. But affordable for a wide percentage of the larger population.
It’s not just the purchase price that becomes more affordable in a partnership or a club setting. Hangar or tie-down costs are reduced. If your hangar costs $275 per month and you have nine partners, your share is reduced to an economical $27.50 per month. The same is true for insurance, maintenance costs, annual inspections, and even the dreaded engine rebuild or replacement. The cost of almost everything is reduced to the extent that you can move the decimal point one place to the left.
Fuel is the exception. Fuel costs what fuel costs. But even that cost can be cut if we’re creative.
One of the benefits of a good partnership, or a club, is that it embraces the social aspects of an aeronautical life. Partners or club members may find it enjoyable to come out to the airport just to meet with their fellow fliers. They may even fly together sometimes, for fun or for proficiency or to visit a destination that interests each of them. This also offers a cost cutting opportunity. Because if the operational cost to the partnership or club allows the aircraft to go out at, let’s say, $100 per hour, flying together cuts that cost in half.
Perhaps one pilot flies under the hood to tweak their instrument skills while the other acts as safety pilot. Or maybe one flies the outbound leg and the other flies the return. It makes no difference. You’re now flying an aircraft you like and feel comfortable in, with a person you enjoy being with, and you’re doing it for half price.
It’s true, aviation is expensive. It’s also true the average new car costs the buyer thousands of dollars in interest payments. But neither of those things is compulsory. They are often true, but they do not have to be true.
If we choose to take the bull by the horns, work the numbers, and make good decisions that are to our benefit in the long run, our experience and our costs can be very different from those borne by the average individual who simply goes with the flow and does what everyone else does.
As pilots, we are anything but average. And there really is a bright, strong future for general aviation lurking out there, just behind the status quo. Let’s go find that future. Let’s make it happen.
Sometimes it’s all about how bad you want to fly. I have never belonged to a club so I can’t speak intelligently about it. I have been a pilot for four or five years, am low time with only about 300+ hours and I was lucky to find a reasonably priced 152 for sale. In order to afford the plane, fuel and related expenses, I have had to work more overtime than I would like and cut out numerous other activities from my life. With that said, I can go to the airport any time I like, any day of the week and fly when I feel like it. I don’t have to share the plane with anyone and never run into schedule conflicts. Just my opinion, but people are used to having everything they want in their lives, (to include the associated debt), and are not happy with just having one thing they are passionate about. I am completely happy to go without the other treats in life and pursue my dream of plane ownership/flying without having to have multiple owners and/or belong to a club. And while I don’t hit 100 hours a year, I fly as often as I can at about 60 hours a year. To me, there is nothing greater in life. I must admit, my kids are all grown and gone and my girlfriend doesn’t get a say when it comes to owning the plane.
One other issue with a medium sized club such as 10 guys on one plane, there are always a couple who don’t pull their weight in terms of work or paying dues and assessments, which means someone needs to get after them, which leads to hard feelings on the part of those tasked with the “collections”, those who had to be coerced into paying, those who do more of the work than others, etc. If you get into a larger club, say 40 people sharing 5 or 6 a/c, you can hire a manager who is not a club member and can keep everyone in line w/o getting into the hurt feelings problem, or if you keep the group smaller, you seem to lessen those problems.
As a member of a 10-person club sharing one small VFR a/c, I will say that Thomas Boyle hit the problem nail right on the head. I’ll add one other issue that people considering this type of arrangement should think about. You are only 1 vote in 10, and things, especially things which cost money, may not go the way you want them to. for example, last year our little airplane was worth somewhere between 15 – 20K. It needed some maintenance, but it was very flyable. We all agreed that the maintenance should be done, but that’s where the agreement ended. Some members want to always have everything the best, others would rather compromise a little on looks and comfort, but keep costs down. A vote was taken, and in the end we put @ 30K into the plane and it’s superb. It’s also worth @ $30K. How many people would make be happy with that kind of return on investment if it was all their own money? Having 50K into a plane worth 30K, now another vote was taken, and our insurance coverage will be increased, resulting in another several hundred dollars leaving the wallet of each member. None of it’s a lot of money, but for the members who are lucky if their schedules click with a/c availability enough to fly it maybe 20 hours a year, it’s getting to where you could rent a plane with more utility for about the same money and with no more scheduling hassles than you have trying to get time in the club plane. My next shared ownership won’t be any more than a partnership. It will cost more, but I’ll also fly more and be better able to control the costs of ownership.
10-4 on being “hoodwinked” by loans. If you can’t afford to pay cash then you can’t afford to buy anything – yes even houses where 1 out of three buyers pay cash and the other 2 out of three are saddled with a loan where they pay twice the price (or more) for their house because of interest payments and wonder why they “live” from pay check to pay check and can’t afford to go flying. Buy you some cheap property out in the country, get a used single wide mobile home and set it up, get a used pick up that someone else has already ate the depreciation on, and then buy a clean used 172 with a pre-buy inspection when you can afford one – with cash – you don’t need a partner.
Jay, while I can’t speak for others, the 100 hour per year figure is used in this example simply because it’s a round number on the high side of the real number. I didn’t intend it to be (nor did I claim it to be) an accurate number derived by scientific means. We need to use something as a yardstick, so 100 hours works in this case. Most fly less. Some fly more. Some fly much more. It’s all up to personal experience and circumstance. The point is not the number, the point is to consider the concept. Flying does not have to be so expensive that it is an unattainable goal for most. It can be, but that’s a choice. If you can split the fixed costs of the aircraft, use an online calendar for scheduling, and live with the occasional inconvenience of not being able to use the airplane exactly when you want to – the cost per hour can be cut dramatically.
I would love to get some public input here from pilots who have successful experiences with clubs or partnerships.
Shared ownership isn’t the only route to “affordable” flying.
The girl-friend of a buddy of mine (who earned her private about a month ago) just purchased an awfully nice Piper J-4 for $10,000. There are a couple of minor squawks that need to be addressed. But nothing that keeps the plane from flying.
Now I know deals like that aren’t popping up every day. But if you look around, they can be found.
Jamie,
Your general points – shared ownership is cheaper, and clubs are more fun – are ones I share. But you’re failing to acknowledge why so many people wind up concluding that they either need to own their own airplane, or buy a boat instead – they want the airplane at the exact same time that all the other club members do.
Most of us only have time off at the weekend. Our mission for the airplane is to notice that it’s a nice day, get a flying companion lined up (or not), fly somewhere, have lunch, hang out, maybe stay overnight, fly home. Total airtime: 2-3 hours. But the airplane is tied up the whole time!
To execute that mission in a club, you have to book the plane months ahead, because otherwise someone will have the plane for an hour from 3-4 on Saturday afternoon, blocking your whole mission. Booking months ahead means you can’t work around weather, and kills the spontaneity that is often associated with the “freedom of flight”.
Club airplanes, with many users, are useful only for flight training, where the mission is “get the plane once or twice a week for 2-hour blocks”.
Small groups can work well, because it’s not so hard to coordinate with 2-4 other people, but of course this doesn’t cut total cost by as much (don’t get me wrong, it helps).
Really, 100 hours per year flown by the average pilot? I highly doubt that but I continually see that number used so often that it seems to be accepted as fact. I talk to A&P’s and pilots all the time about what they see and log. No where near 100 hours can be found. 40 to 70 is found as well as zero hours flown between annuals is what I commonly find in GA.
It’s time we start using our own data from around the airport and quit buying into this quote so often cited. Now, having said that, your idea of shared ownership makes even more sense to pursue if you fly less than 100 hours. I belonged to a club prior to the purchase of my aircraft and really enjoyed it. It made economic sense while pursuing training and I enjoyed the social aspects of the club. I would strongly encourage a group purchase with the appropriate legal protections for all involved.
It is nice, however, to own your own.
“If your hangar costs $275 per month and you have nine partners, your share is reduced to an economical $27.50 per month.”
I believe your “nine” should be a ten.
Ex. 275/9=$30.55 : 275/10= $27.50
Nice article though!
nine plus yourself=ten