Advice to become a co-owner

If you are going to fly 100 hrs/y, they let you take the aircraft away from base for say one week during which you fly on average 2 hrs/d at no extra charge, aircraft availability is as good as you say and there are no hidden costs that will require a dilution of the stock, it means that you will have access to a DA40D at 135 €/h and a SR22 at 245 €/h not counting your capital cost, it sounds like a good proposition.

If you amortise your initial investment over 10 years and fly 100 h/y during all that time, the DA40 will cost 160 €/h and the SR22 270 €/h. If you fly less the hourly price will be higher.

Wrt availability, 30 co-owners each flying 50 hrs/y means 1500 hrs flown on the fleet of 5 aircraft. That represents 300 hrs/y per aircraft. To me it does not sound like availability will be all that good, especially during weekends, particularly in the summer months.

You should also look at the company structure. Who is going to do aircraft maintenance and where? To what standards? Who will be managing the fleet?

Will there be a demand for shares of the company? How liquid will it be?

You did not say what models DA40 and SR22. DA40NG with the Austro engine and G1000 or Centurion and round dials?

That’s an interesting model… €25k gets you a 1/25 share in all those aircraft?

I would first consider what sort of flying you really want to do. If say you want to fly an SR22, you may not want to fly the DA40 and even less the Virus. Or vice versa So much much would a share in just the SR22 (or whatever) cost?

Of those types, nothing will come even close to the SR22 for travelling around Europe and €90/hr is a cheap dry cost. OTOH the DA40 is probably less than half the wet cost of the SR22, per hour, which may translate to a lot more flying for you. So this depends on how much money you want to throw at it.

How old is this setup? If it is recent, it could be a flash in the pan like so much in GA. Or a tax loss structure for somebody’s business who has flying as a hobby. Then it folds up and you lose your investment.

Also I would say €90/hr is close to the direct (purely time-related) operating cost of an SR22. I used to rent out a new TB20GT in 2002-2006 for GBP 80/hr dry so I would worry about the long term viability. Here in the UK a roughly similar scheme around a number of SR22s was about GBP250/hr wet, plus the purchase of an annual hour block for a few k.

Otherwise, a share is easy to sell if in something easy simple and popular – that’s all that most people want to fly. And while you could sell a 1/4 share in a new SR22 for €1000 all day long the plane would just get trashed or crashed very quickly, or you would have to be fussy about qualifications/experience and then you get almost no customers (which is what I found). The reality is that most experienced pilots with any money are not “floating” in the market and already own their planes 100% or are in a long term syndicate (this is what I found and it was a big problem).

Anything sells at the right price. Some shares take a long time to sell, for various reasons, one of which is that they tend to be overpriced i.e. they over-value the asset. This is really common on the PA28-type scene. It “works” because obviously a say 1/4 share is much more affordable than the whole plane.

And most people want to buy into something where somebody else does the “dirty work” – they don’t want the admin and don’t want to (or can’t) do maintenance so even if they could buy whole, they would not be able to deal with it. That in turn needs a properly set up structure where a defined person really is in charge and this is official, otherwise you get resentment and eventually the syndicate will collapse. You should check out the organisation of all this.

So, if this is what it looks like, it looks great, but I would check it all out. And not just by asking the owner – he will give you a great marketing speak

Also note that there are not many “touring” pilots in France. The reasons for that have been discussed here many times. It might be language issues. So you may be in a small group, especially if you want to fly outside France. So check out who else is renting the SR22s especially and where they fly. A low number of customers makes the availability look great but it will lead to the business collapsing.

So, in summary, while this may sound overly negative, it does look like a great deal provided it is here to stay (in terms of finances, number of customers and management) and is easily affordable to you. You need to be prepared to lose 100% of the share you bought, or at least wait a long time to get anything back, but that is common… look at how long some shares are on the market.

Finally, while FAA license training is easily arranged in Europe, the checkride situation is very tight and has a long history of getting complicated. You may need to plan to pop over to the USA for that. And from April 2016 EASA will require EU based people to have equivalent EASA licenses too even for an N-reg (that date is rumoured to slip to April 2017).

Aviathor wrote:

That represents 300 hrs/y per aircraft. To me it does not sound like availability will be all that good, especially during weekends, particularly in the summer months.

My thoughts as well. But, then I guess only a small handful actually fly that much, and they fly most of it during a couple of months (according to my experience). Each aircraft probably fly 50-100 h/y max. You should look in the books and see what the real utilization is, but this looks very good to me from what you describe.

I know or have known of a number of 25-30-member syndicates and they all had good availability on weekdays, and poor (basically useless, unless you can fly in bad wx and accept a short-notice cancellation) on weekends. The aircraft were C150 C152 and PA28.

But I think that (mostly old shagged planes) is a different market to the one in this thread, where the planes are probably nice and they are looking for customers with some money. The UK syndicates have really low monthly costs e.g. GBP 30/month and anybody can pay that without even thinking about it – you can spend that on fags in 3 days

Antonio,

if I was you, I’d do one step at a time. I would finish the PPL and then start flying your local Robin by the hour, as many hours as you can. Once you have flown 100 or better 200 hours you can start thinking about other models. If you have not trained on the SR22 it will be a handful of airplane, and especially i the beginning you need a block of at least 25 hours to become used to it and to fly it safely.

And then: SR22 isn’t SR22. What model and what equipment do you buy for 25 K? A round dial 2003 with an S-TEC30 autopilot or a fully equipped G3? While the basic airplane is the same there can be a big difference.

I would get more experience first, save the money and try to to learn as much as you can. 25 K buys a lot of experience in the Robin, and it’s not necessary to get that experience in an SR22.

€ 90 dry for a SR22, even as a shareholder, makes me a bit suspicious. I cannot fly mine for that money. Even if the airplane is good – it will not be for long if there’s no money for good maintenance and repairs.

Peter wrote:

That’s an interesting model… €25k gets you a 1/25 share in all those aircraft?

So much much would a share in just the SR22 (or whatever) cost?

AIUI 1/30th share of the “SARL”. A SARL is a limited liability company.

LeSving wrote:

But, then I guess only a small handful actually fly that much, and they fly most of it during a couple of months (according to my experience)

Not sure about that. Anyone who puts down 25.000 € in airplane ownership would surely be committed to flying more than 10-20 hours a year, or it would not make sense.

I would get more experience first, save the money and try to to learn as much as you can. 25 K buys a lot of experience in the Robin, and it’s not necessary to get that experience in an SR22.

That depends on how much money the customer has.

The reason a lot of PPL training is done in say a C150 is because it’s cheap. Not because you want to fly it afterwards, taking your girlfriend or whatever to Le Touquet for lunch

I did my PPL in about 60hrs, rented for another 60hrs (PA28s) and then bought the TB20. I wish I had avoided the middle bit completely; I was flying shagged old wreckage, with a then-girlfriend in the RHS copying the main radio setting into an Icom handheld in case the main radio packed up yet again… Learning value close to zero. And the rental cost was way above the DOC (direct operating cost) of the TB20.

Nothing beats time on type for safety and competence and the sooner you start on the type you want to fly the better a pilot you will be on that type at any given TT figure. Hence the saying “buy your last plane first” But most people don’t have the money to do this, and some will never learn an advanced type for various reasons. So one needs to know more about the “customer” in this case.

I would also argue that by renting (especially renting something short of your final objective) for too long you are removing money that will be needed for your final objective and putting it into the pocket of the person you are renting from

AIUI 1/30th share of the “SARL”. A SARL is a limited liability company.

Yes – a share in a limited company is not really marketable. You need the agreement of the others. But a lot of UK syndicates are limited companies too.

Anyone who puts down 25.000 € in airplane ownership would surely be committed to flying more than 10-20 hours a year, or it would not make sense.

You would be amazed I had lunch yesterday with a guy who does freelance training and you could up that € figure 10×.

You need minimum 10 hourse of instruction on the SR22 to fly it safely, and as a beginner I would rather do 20. Only then can you start to get experience with it. Do not underestimate the much higher speeds, the complex avionics and the necessary systems knowledge to fly it safe. But IF you want it, then join COPA and read as much about it as you can.