So let’s say you own a 3-500k SEP but you don’t get to fly it much yourself for various reasons and want to take on a few pilots to offset the ownership costs.
What scenarios are tried and proven?
I’d say the owner rents the aircraft “dry” to the other few pilots and/or a “tax transparent company” collectively owned by them? Needs to register for VAT (if the rent is above the national threshold) and deal with that.
What are the opinions of dividing fixed costs?
The other pilots pay a subscription. Either a fixed sum that is an estimate of the actual/predicted costs maybe plus a safety/profit margin (the risk is all for the owner), or an agreed percentage of the actual costs, that is a matter of agreement between the parties. In the latter case, I would definitely put some clause that truly big stuff (like engine overhaul) is for the owner (but he gets paid a rent that covers that), unless the other pilots are there for many years, else it is too unfair that they have a spike of cost one year for a plane that is not theirs, and if the just entered the system, they didn’t use up that engine and/or if they leave the system next year they won’t use the new engine. Legally / tax wise, the owner invoices it, the others pay.
I let the renters choose between:
One way to structure “share all actual costs” is that the above mentioned “tax transparent company” (or club / Verein / …) is in fact owned by all pilots (all pilots are members, respectively) including the owner. The shared company / Verein has exclusive use of the plane, pays all costs + a rent to the owner (for capital costs and/or “truly big stuff”). The shared company / Verein then spreads the costs among its owners / members as agreed between them.
Simply do not do it. I hear too many bad stories from customers. This goes well until some bigger repair is required. Then the owner suspects the others of not handling the aircraft properly (true or not true) and usually the plane ends up for sale with an angry owner. Either the “renters” become co owners with capital outlay etc. at full risk or sell the plane.
The usual way is to let someone use it for whatever price is agreed upon.
Another often used way is to co own it with others. But this is perhaps not what you are after.
Some rent their aircraft out to clubs. But to do that with a €500k aircraft? The upside is that clubs can have strict regulations on the aircraft, as well as instructors for check rides. It requires very little work from your part.
Either the “renters” become co owners with capital outlay etc. at full risk or sell the plane.
But with co-owners you can’t simply kick them of the flying list and you can’t do what you wish with the aircraft?
For renters, you only care about their experience, insurance and financials
For co-owners, you need more than that !
Personally I wouldn’t do it.
Motivation is different between the parties. The owner will want to take the best possible care of their valuable asset. The renter will want to get as much flying for as little as possible. This feeds into things like operating procedures, engine management and choice of fields.
As Sebastian says, all is well until something goes wrong. The owner suspects the renter of not handling it correctly. Maybe they are correct (and they would have been better off never renting it to them) or they are wrong (and fall out over something that didn’t actually happen).
To me the whole point of having your own aircraft is so that you know it’s exactly like you left it. If something breaks as a result of mishandling, it’s your own fault. If you hear a strange noise for the first time, you know it’s the first time that that noise was heard, and you’re not second guessing someone else. If you find a nick in the propeller, you know it’s probably from a small stone somewhere that you flew it.
I’d never fly an anyone else’s aircraft unless they were with me. Too easy to ruin a good friendship without actually doing anything wrong.
Personally I think it’s either keep it for yourself exclusively or all into a partnership where you have no more investment with it than any of the other partners.
If sharing is a must, then I’d work with just one pilot who you know really well and totally trust. No more than one.
The airplane is not for rent per se to the public.
Anybody who wants access needs to shoulder a pro rata share of the yearly fixed costs. I’d say two years minimum commitment.
Insurance
Hangar
50/100h inspection per AMM
ARC issuance
Some fees
Let’s call it 20k. So 5k each. For two years, 10k.
For 10k, the market gives you 33 hours all inclusive if you rent. 5k obviously half.
Variable costs:
Fuel, Oil, Engine fund.
60+5+55 = 120€ / h
So 5k fixed + 120€ * 16.5 hours = 7k = keep renting.
But, for someone flying more, being interested in longer trips, non minimum hours, a nice, clean plane and good availability…. It makes sense.
5k fixed + 120€ * 35h = 9.2k (renting would be 10.5k).
The airplane is G1000 equipped and all flights will be data monitored. Exceeding limitations (eg max cruise power settings as per contract) and negligent operation will be comprehensible.
