Tuesday, January 13, 2015

Biting The Bullet

Q: What are the two happiest days of a pilot's life?
A: The day he buys his first airplane, and the day he sells it.

I've been saying for years now that sole ownership of a recreational airplane is a money-wasting extravagance for 90% of the pilots out there. Even "affordable" airplanes have fairly high fixed costs, meaning that your very first hour of flight time is 5 to 10 times as expensive as the rental rate for an equivalent aircraft. Renting is more cost-effective than sole ownership for anyone who flies less than, say, 8-10 hours a month - which is virtually everyone I know who flies for fun. A huge portion of the GA fleet doesn't fly more than an hour or two a month. Besides the inefficiency of it, the disuse is hard on the airplanes and their engines, adding to maintenance costs and woes.

Despite all that, most pilots dream of owning their own airplane, and many present owners seem to be continually looking to trade up to something bigger, faster, and yet more expensive. I'm no exception; for years I've made a daily habit of perusing barnstormers.com, particularly looking at 4-place taildraggers. Don't get me wrong, I like belonging to the Yellow Cub Club. I've had a blast flying the Cub, and the flying club arrangement appeals greatly to my thrifty nature. Having a bunch of pilots to share the fixed expenses means that flying clubs are cheaper than renting after only 2 or 3 hours a month, and you generally get better maintenance, more flexible scheduling, the camaraderie of the club, and a measure of the pride of ownership. It's still not quite as good as owning a plane, though. I got a taste of that when I was flying the Cessna 170A. I missed having a plane guaranteed available whenever I felt like going flying, with the flexibility to take it on longer adventures. I missed having four seats, night flying equipment, and a measure of cross-country capability. The Cub is based at Airlake, a 45-minute drive from our house; I missed having a plane at Flying Cloud, only 15 minutes away. And frankly, I kinda wanted a plane of my own merely for the sake of being able to say, "She's mine."

When I talked to Dawn about this, it turned out she feels the same way, even though she loves the Cub as much as I do. Like me, she prefers flying a classic taildragger over a modern spam can. Had there been a local flying club or partnership formed around a 4-place taildragger at FCM, I probably would have gone in that direction; the cost advantage over ownership outweigh the occasional inconveniences. But there are no such clubs in the local area, and I couldn't find anyone looking for a partner, either. So our choices were to continue with the Yellow Cub Club, or buy a plane of our own.

I did some investigation and ran the numbers:
  • $25k Airplane, $15k financed at 2.99%/60 months: $280/mo
  • Liability & Hull Insurance: $65/mo
  • T-Hangar at FCM: $200/mo.
  • Annual & Routine Maintenance: $125/mo
  • Fuel: $45/hour
  • Overhaul Fund: $10/hour
I concluded that my very first hour each month would cost a whopping $725. However, for $1200 a month, I could fly 10 hours at $120 an hour, which is comparable to older C-172 and Piper PA28 rental aircraft in my area. Dawn and I talked and decided that if we had our own airplane 15 minutes from home, we would use it 10 hours a month. We could afford to up our flying budget from $200/mo to $1200/mo. We discussed the fact that an airplane could easily blow the budget above with big, expensive surprises. And then we decided to bite the bullet and go for it. The search began in earnest. First, I wanted to narrow our criteria down a bit and do some research.

Next post: The Search. To be continued....


rw2 said...

I'm going to contest your math here. It's valid from a cash flow perspective to create a budget around how much money will flow out, but the topic of the post was comparing the cost of having your own plane to the cost of renting.

One super important thing that was overlooked was that the $120/hour given to the FBO was gone forever. The $280/month given to your bank for the airplane loan mostly still belongs to you. That $280 is a significant part of the operating budget and really should be looked at as an investment and not a cost since whenever you sell the plane you will get it back (a $25K airplane isn't likely to depreciate much, we're not talking a 2015 cirrus!)

Sam Weigel said...

That's a good point, rw2. When I put the budget together, part of was seeing what the expense is vs renting, and part of it was, like you say, planning for cash flow. The $1200 number wasn't really arbitrary, it's a side source of income that we previously put into savings and now decided can be set aside for flying. If I'm only looking at the cost vs renting, it makes sense to exclude the aircraft payment. In that case I'm only paying $92/hr @ 10 hrs per month - bargain! ;-)

Raymond Curry said...

I guess, a plane could really be an indulgence, just like a luxury car could be. Ultimately, it depends on finding good deals that will merge well with your standing budget. Well, if a pilot's happiest moment is finally getting his dream to scour the sky in his own terms, it would be a shame to throw that by the wayside. Thanks for sharing that!

Raymond Curry @ Holstein Aviation