COMMUNITY OF FLYING
Club Owned Aircraft
Certain planes have historically been difficult to attract to the club, and when we get them they are hard to keep around for one reason or another. Two good examples of these types of planes are the American Champion Super Decathlon and the Beechcraft Duchess. The Super Decathlon is an ideal starter plane for aerobatics and has always had a loyal following inside the club membership. The Beechcraft Duchess is a classic twin-engine training platform and is often the choice for members wanting to move up to a multi-engine plane. Both planes are relatively rare, especially ones in good condition. We have had quite a long drought without either of these planes on the flight line. It definitely affects the membership numbers, as those interested members stray to other operations that can offer these platforms.
After working with the membership for several months and not finding anyone to buy these airplanes, the board of directors held meetings to discuss the possibility of the club itself acquiring one or more of these “special” planes to help the club maintain a more diverse and interesting fleet. After some deliberation, the board voted unanimously to first acquire a Super Decathlon for the flight line. It will likely be available for rent sometime towards the end of May. The acquisition of planes by the club raises a host of questions and I would like to try and answer several of them here. If you have additional questions, then feel free to stop by or email me and we’ll keep the dialog going. So here we go.
Q. I’m a member and have no interest in flying a Super Decathlon so why are we investing club resources in such a plane?
A. There are several parts to the answer. Just having a Super D. on the flight line will attract new (or departed members to return). We lost between 12 and 20 members the last time a Super D. left the club. That’s a decent number of members and the lost revenue that goes with them. The club invests its’ working capital in all kinds of ways, sometimes appealing to only a small percentage of the membership. The same argument was used with the acquisition of our G1000 Simulator which has proven to be a great asset for those members interested in using it (especially getting one free hour per month along the way) and is flying more than we predicted, so will return the capital to the club in less than the planned 5 years.
Q. Does this mean that the club is now competing with existing owners?
A. No. The club will not start acquiring planes that compete directly with existing owners e.g. Cessna, Piper, and Cirrus. The lower models of American Champion planes (7ECA, 7GCAA) will likely benefit because they offer a path from zero tail-wheel time to the Super-D.
Q. Is this a slippery slope to the club owning more and more airplanes?
A. No. This is a limited strategy to plug very specific strategic gaps in our portfolio. These gaps will shift over time and we will respond accordingly. However, it is not the intent of this strategy to own multiple planes but only one or two as is seen fit by the board of directors.
Q. How is this plane going to pay for itself?
A. The break-even point for most of the member-owned planes is around 20-25 hours per month, depending upon a host of factors. The break-even point for a club plane will be a little lower, because the club won’t need to charge itself operational fees, and will benefit from things like fuel, oil, and parts at wholesale rates. We expect the break-even point to be somewhere in the 15-hour per month range.
Q. What is the exit strategy for the plane?
A. Our short-term goal (first year) is to get the plane established on the flight line. Once established, we will likely look to sell the plane to a member. As part of the deal we will require that the plane remain on the flight line for a specified minimum time (likely 24 months). The proceeds from the sale may be utilized for other capital projects, or possibly to acquire another difficult to acquire airplane like a Beechcraft Duchess (if we haven’t already obtained one by then).
This is an exciting new period for the club as we continue to broaden our portfolio and appeal to the membership.