End of the year accounting

[StinkBug]

I own my plane 50/50 with my mother, who happens to be a CPA, which means she's good at keeping track of numbers. We bought the plane last January for me to do my training and hour building in. I already had my PPL and my goal is to fly professionally, so the main aim was to attempt to minimize the hourly cost of the time I'd need to spend flying something, as well as eliminate availability issues and give us something we could take on trips and enjoy while I'm also building time. It was a tough decision to make with a lot of unknowns as far as real cost numbers go, but it looks like we're doing well. 

She recently ran all the numbers on cost of ownership for the year, purchase price not included. She included all maintenance, fuel, tie down fees, landing fees, everything. Even the new cover since the plane didn't come with one. I flew 340 hours in the plane this year and when divided out we spent roughly $65/hour. Since the plane I would have been flying otherwise rents for $120 an hour you could say that we saved $18,700 this year by owning rather than renting. That savings is just a couple grand shy of half the cost of the plane.

The efficiency and reliability of the Mooney definitely played a big role in that, since I generally burn just over 8GPH, and we've had very minimal maintenance problems. I doubt there are many types of aircraft that could beat it, and certainly none I can think of that would beat the hourly rate AND get you as far on that money.

Curious if any of you have done the same math and figured out what your plane costs to fly per hour.

[Awful_Charlie]

Yes, I've run the numbers, and got suitably depressed! I guess if you have anyone who even slightly resents what you spend on flying, it's an exercise you don't want to do! As my aircraft is also my personal transport, my spending profile is probably different to many others (for instance I have over 30k in spares in the hangar which had to be paid from somewhere), but the fixed costs (Jeppesen, Hangar, insurance, Annual, altimeter/transponder checks, batteries...) runs to 12k EUR a year. Distributed over 100 odd hours means I'm looking for a co-owner. Hourly costs are harder to nail, as fuel varies from £1 a litre in the channel island to €3.50 a litre in Italy (that's a range of about 4 to 14USD a gallon) and landing fees vary from zero to limitless - I did have to pay £450 in Manchester for landing and two nights parking in the last year Some of those costs will be the same if you run a single seat home build or a Jetprop, or if you rent or buy, so I think it's hard to make a direct comparison.

[mpg]

4 hours ago, StinkBug said:

I own my plane 50/50 with my mother, who happens to be a CPA, which means she's good at keeping track of numbers. We bought the plane last January for me to do my training and hour building in. I already had my PPL and my goal is to fly professionally, so the main aim was to attempt to minimize the hourly cost of the time I'd need to spend flying something, as well as eliminate availability issues and give us something we could take on trips and enjoy while I'm also building time. It was a tough decision to make with a lot of unknowns as far as real cost numbers go, but it looks like we're doing well. 

She recently ran all the numbers on cost of ownership for the year, purchase price not included. She included all maintenance, fuel, tie down fees, landing fees, everything. Even the new cover since the plane didn't come with one. I flew 340 hours in the plane this year and when divided out we spent roughly $65/hour. Since the plane I would have been flying otherwise rents for $120 an hour you could say that we saved $18,700 this year by owning rather than renting. That savings is just a couple grand shy of half the cost of the plane.

The efficiency and reliability of the Mooney definitely played a big role in that, since I generally burn just over 8GPH, and we've had very minimal maintenance problems. I doubt there are many types of aircraft that could beat it, and certainly none I can think of that would beat the hourly rate AND get you as far on that money.

Curious if any of you have done the same math and figured out what your plane costs to fly per hour.

Yes I have added it up and divided it out, just like your mom did.

I have done it carefully for a number of planes I thought might try to own and fly.

And I see the same pattern for you as I did for me.

You are flying about 3 times more than the normal high average and getting it down to 65$ an hour,,,   good!

Based on your fuel cost I see that if you only flew 100 hrs a year, you would spend way less, but! your per hr cost would

shyrocket to about 144$  an hr.!!!!

If you flew 1000 hr per year your per hour cost would droop to about 43$ an hour.

The more you fly, the more you spend, but the cost per hour is less!

Unless,,,   you just rent!!   Then their is an hour cutoff in costing it out..

[Danb]

 I do the record keeping for numerous companies and individuals the expenses are all over the place. They range from a cubby to a Lear 35, a couple King Airs, Baron, Bonanzas, Cirrus and obviously Mooneys. The most difficult is the helicopter and Citation. It amazes me the vast per hour cost fixed, variable and semi variable each accumulates. The training and continuing education component of many companies is extraordinary. We've been lucky having our CPE allowed remember Doconent Document and Document. The time and effort is worth it.

[ArtVandelay]

Mine was $95, but I have a hangar and I live in south Florida. I'm going make more of an effort to fill up with inexpensive avgas this year, I average $31.3/hr in fuel alone.

[garytex]

MPG has it right. 300 hrs is nearly two work months, most of us do 100 - 150 hrs a year. So if nothing much blows up fixed costs are in the $150/hr range.  And usually something does blow up. 

"Don't look! Don't look!"

With my plane down for engine and paint I've been flying a Chetah and a 170, both of which I have happily owned before. Toyed with the idea of downsizing. Problem is they fly like drunken pigs on ice compared to the Mooney.

I fly for work transportation, and as long as that is true I can afford my magic carpet. It'll be a sad day when that ends.

[StinkBug]

Oh trust me, I fully realize that my per hour cost is low in great part due to the number of hours flown. There are plenty of things that cost the same no matter how much one flies, like insurance, parking and the annual inspection. I was actually planning on getting the spreadsheet to break out the hourly expenses to see what a more average year might look like. It would certainly be significantly higher for 100hrs rather than 300, but I bet I'd still be under the $120 rental rate.

That said, for my situation, owning has vastly saved compared to renting. Technically I've spent more because of the buy in cost, but I could easily sell my plane for what I paid for it a year ago. Even more than that however, if I had been renting there's no way I could have flown that many hours this year. The planes just aren't available that much, regardless of the money. Most likely it would have taken me another year to get the same number of hours, which means another year of paying to fly rather than being paid to fly. It's hard to put a price tag on that time.

[mpg]

12 hours ago, StinkBug said:

Oh trust me, I fully realize that my per hour cost is low in great part due to the number of hours flown. There are plenty of things that cost the same no matter how much one flies, like insurance, parking and the annual inspection. I was actually planning on getting the spreadsheet to break out the hourly expenses to see what a more average year might look like. It would certainly be significantly higher for 100hrs rather than 300, but I bet I'd still be under the $120 rental rate.

That said, for my situation, owning has vastly saved compared to renting. Technically I've spent more because of the buy in cost, but I could easily sell my plane for what I paid for it a year ago. Even more than that however, if I had been renting there's no way I could have flown that many hours this year. The planes just aren't available that much, regardless of the money. Most likely it would have taken me another year to get the same number of hours, which means another year of paying to fly rather than being paid to fly. It's hard to put a price tag on that time.

Like you said,, you are flying a lot now so you can get Paid to fly!   The sooner the better!   It is good.

I am only looking at your thread as an arithmetic problem/exercise,,,   I like those, especially for airplanes.

Like I said your per hour cost would be 144$ if you flew 100 hours per year.

If you fly your Mooney only 24.375 hr per yr you would spend the same 12000$ it would cost to rent for 100hrs!

but,, your cost per hr would be 492$ per hr!!!

Flying 127 hrs per yr will cost 15284$, but then you will be spending the same 120$ per hr of renting.

I guess this number is an important cutoff point!

Less than 127 hrs per yr is cheaper to rent,,,   more than 127 per yr is cheaper to own,,,

Especially if your are Owning,,,   a Mooney!!! 

You Did save 18700$ last year building time as fast as you can ,,  toward the day you get paid for flying.

Edited January 25, 2016 by mpg

[Marauder]

12 hours ago, StinkBug said: Oh trust me, I fully realize that my per hour cost is low in great part due to the number of hours flown. There are plenty of things that cost the same no matter how much one flies, like insurance, parking and the annual inspection. I was actually planning on getting the spreadsheet to break out the hourly expenses to see what a more average year might look like. It would certainly be significantly higher for 100hrs rather than 300, but I bet I'd still be under the $120 rental rate.

That said, for my situation, owning has vastly saved compared to renting. Technically I've spent more because of the buy in cost, but I could easily sell my plane for what I paid for it a year ago. Even more than that however, if I had been renting there's no way I could have flown that many hours this year. The planes just aren't available that much, regardless of the money. Most likely it would have taken me another year to get the same number of hours, which means another year of paying to fly rather than being paid to fly. It's hard to put a price tag on that time.

Like you said,, you are flying a lot now so you can get Paid to fly!   The sooner the better!   It is good.

I am only looking at your thread as an arithmetic problem/exercise,,,   I like those, especially for airplanes.

Like I said your per hour cost would be 144$ if you flew 100 hours per year.

If you fly your Mooney only 24.375 hr per yr you would spend the same 12000$ it would cost to rent for 100hrs!

but,, your cost per hr would be 492$ per hr!!!

Flying 127 hrs per yr will cost 15284$, but then you will be spending the same 120$ per hr of renting.

I guess this number is an important cutoff point!

Less than 127 hrs per yr is cheaper to rent,,,   more than 127 per yr is cheaper to own,,,

Especially if your are Owning,,,   a Mooney!!! 

You Did save 18700$ last year building time as fast as you can ,,  toward the day you get paid for flying.

I still track the hourly operating costs for my Mooney. At the end of the day, it comes down to an annual grand total. Back in the 1990s, with AvGas in the buck something range, I would spend between $6,000 and $9,000 per year flying. I'm now in the $18,000 to $22,000 range annually.

Fuel, annual & hangar make up the majority of the direct operating costs followed by reserves, maintenance, avionic subscriptions and the incidentals (headsets, etc).

When I want to get depressed, I look at the hourly operating costs for a year where I flew less and dealt with an expensive annual or other costs.

One thing I am amazed at is how some pilots treat reserves. If you have enough disposable income, probably not needed. But if you are working with a fixed budget, making sure you are building and tracking a reserve, is in my opinion, part of what keeps a marriage together (hooray for you single guys). Keeping a reserve made it easier for me to justify the upgrades and engine overhauls.

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[Cruiser]

$15806.07 in 2015

[jetdriven]

Likely the OP is not adding the ~25-35$ per hour dry costs of the aircraft fr things that depreciate or wear out on hours.  Such as the engine, prop, vacuum pump, accessories, airframe time, etc.  then there's the ten year plan for radios and paint. Those must be depreciated or replaced too. that sends it up to over 100$ an hour, and that is if nothing unplanned happens.

[Hank]

"Ten year plan for radios and paint"??? The 430 was put into my plane in 1999; the paint was already several years old. Radio continues to work well after discounted early WAAS upgrade right after I bought her in 2007. I am continuing to get compliments on the paint job.

It is easy to get obscenely high hourly costs, just add up every penny you spend and divide by hours flown. Apparently Stinker and I think alike, where the hourly cost to fly is the expenses used to fly, which does not include the costs to own [hangar, annual, insurance, pitot static testing, GPS subscriptions, etc.]. To get the hourly costs many people here have, you've got to be including avionic upgrades [optional, nice to have], ANR headsets, Foreflight subscriptions, multiple ipads to run Foreflight, etc.--too much discretional spending not required to operate the airplane. Maybe there should be three categories:  operational [what it costs to fly]; ownership [the fixed costs]; and the Goodies [things you get because you want them]. I bet the latter would be the largest number for many of my fellow MSers . . .

[EDNR-Cruiser]

Well, I am always doing the full calculation too and even though the costs per hour cannot be compared when flying in Europe, I fully agree with your comments on reliability, efficiency and cost. My average fuel burn last year was 7,73 Gal/h... - and even though the AVGAS prices have come down somewhat in Europe, this is a great motivation to fly my Mooney as often as possible.

[Marauder]

"Ten year plan for radios and paint"??? The 430 was put into my plane in 1999; the paint was already several years old. Radio continues to work well after discounted early WAAS upgrade right after I bought her in 2007. I am continuing to get compliments on the paint job.

It is easy to get obscenely high hourly costs, just add up every penny you spend and divide by hours flown. Apparently Stinker and I think alike, where the hourly cost to fly is the expenses used to fly, which does not include the costs to own [hangar, annual, insurance, pitot static testing, GPS subscriptions, etc.]. To get the hourly costs many people here have, you've got to be including avionic upgrades [optional, nice to have], ANR headsets, Foreflight subscriptions, multiple ipads to run Foreflight, etc.--too much discretional spending not required to operate the airplane. Maybe there should be three categories:  operational [what it costs to fly]; ownership [the fixed costs]; and the Goodies [things you get because you want them]. I bet the latter would be the largest number for many of my fellow MSers . . .

I think at the end of the day, it becomes a question of how you want to do the accounting. In my example, those costs are the costs associated with flying and keeping the plane. I would not be paying $300 a month to keep an empty hangar. Would you? I'm not sure how you cannot link something like hangar cost to the operating cost of the plane, unless of course you can store the plane in your own owned hangar on your private airstrip.

As for the avionics upgrades, there is a difference between discretionary and mandatory updates. My adding a WX-500 was discretionary but the replacement of a failed Narco NavCom with a GNC 255 was mandatory based on the flying I do. The upgrade to a WAAS GPS was discretionary bordering on mandatory because the airports I fly to had eliminated their VOR approaches. The point Byron made is valid. Would you go to an airport and rent an IFR GRS equipped plane with an expired database?

I think we sometimes fool ourselves into thinking that flying is cheaper than it is. I wish it were.

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[Marauder]

$15806.07 in 2015

Now there is Cheap Bast$&d if I ever saw one. Down to the penny!

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[Hank]

2 hours ago, Marauder said:

I think at the end of the day, it becomes a question of how you want to do the accounting. In my example, those costs are the costs associated with flying and keeping the plane. I would not be paying $300 a month to keep an empty hangar. Would you? I'm not sure how you cannot link something like hangar cost to the operating cost of the plane, unless of course you can store the plane in your own owned hangar on your private airstrip.

As for the avionics upgrades, there is a difference between discretionary and mandatory updates. My adding a WX-500 was discretionary but the replacement of a failed Narco NavCom with a GNC 255 was mandatory based on the flying I do. The upgrade to a WAAS GPS was discretionary bordering on mandatory because the airports I fly to had eliminated their VOR approaches. The point Byron made is valid. Would you go to an airport and rent an IFR GRS equipped plane with an expired database?

I think we sometimes fool ourselves into thinking that flying is cheaper than it is. I wish it were.

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The hangar cost, like insurance, does not vary depending on how much I fly. Fuel, oil, tires, engine life, all vary directly as I operate the plane. Thus "operating" costs and "fixed" cost.

When you installed your GPS, did you hourly operating costs for that year triple? No, the cost to operate the plane didn't change, but your costs to own the plane sure did. In the winter, do you sometimes not fly (or not fly IFR) for a complete GPS data cycle? I do. So my operating costs for those four weeks are infinite (1/13th of the database cost divided by zero hours).

Inflated "operating costs" do,nothing but discourage others from buying a plane. Personally,I'm enough of a CB that I rather like claiming $45-50/hour operating cost; gotta love fuel now at $3.35, less my 15¢ discount as a tenant.  

[Marauder]

19 minutes ago, Hank said:

3 hours ago, Marauder said:

2 hours ago, Marauder said: I think at the end of the day, it becomes a question of how you want to do the accounting. In my example, those costs are the costs associated with flying and keeping the plane. I would not be paying $300 a month to keep an empty hangar. Would you? I'm not sure how you cannot link something like hangar cost to the operating cost of the plane, unless of course you can store the plane in your own owned hangar on your private airstrip.

As for the avionics upgrades, there is a difference between discretionary and mandatory updates. My adding a WX-500 was discretionary but the replacement of a failed Narco NavCom with a GNC 255 was mandatory based on the flying I do. The upgrade to a WAAS GPS was discretionary bordering on mandatory because the airports I fly to had eliminated their VOR approaches. The point Byron made is valid. Would you go to an airport and rent an IFR GRS equipped plane with an expired database?

I think we sometimes fool ourselves into thinking that flying is cheaper than it is. I wish it were.

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The hangar cost, like insurance, does not vary depending on how much I fly. Fuel, oil, tires, engine life, all vary directly as I operate the plane. Thus "operating" costs and "fixed" cost.

When you installed your GPS, did you hourly operating costs for that year triple? No, the cost to operate the plane didn't change, but your costs to own the plane sure did. In the winter, do you sometimes not fly (or not fly IFR) for a complete GPS data cycle? I do. So my operating costs for those four weeks are infinite (1/13th of the database cost divided by zero hours).

Inflated "operating costs" do,nothing but discourage others from buying a plane. Personally,I'm enough of a CB that I rather like claiming $45-50/hour operating cost; gotta love fuel now at $3.35, less my 15¢ discount as a tenant.  

 

But don't you think your comments are a disservice to those who are uninformed about plane ownership? Whether you consider these costs fixed or operating, you are paying it regardless of how much you are using the plane. Your argument is like saying the cost to own a home is only the cost of utilities. Because the mortgage and taxes are "fixed" doesn't make them not real.

To make the trade-off between owning a plane and continuing to rent, the full cost of ownership needs to be factored in. And that needs to be translated into an hourly cost which is the same unit of measurement a FBO uses to come up with an hourly rate. That is why renting makes a lot of sense to those who can't justify the full cost of ownership. For those Cheap Bast$&ds who want to lower the cost of ownership, you can delay or eliminate costs, like tying down instead of a hangar or looking for a mechanic who will do owner assisted annuals. But at the end of the day, it still is a cost.

The sad truth is that I have personally spoken to owners who got in over their financial heads because they didn't take into consideration all of the costs associated with operating the plane they purchased. I'm willing to bet some of the hangar queens we sitting are exactly there for this reason.

And for your comment about the GPS, of course it didn't increase my operating cost by a factor of three. But it certainly was factored in the operating cost as a reserve that was factored in.

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[Danb]

Hanks 430 and Chris's sweet glass panel are not fixed nor variable costs unfortunately there costs that should be capitalized therefore added to the basis of the airplane and approiately depreciated over the useful life of the asset(radio). I'm sure someone will attempt to categorize it differently and that could have merit since there are mixed use costs. It makes more sense to say Chris's plane cost 60,000 and his radio package was say 25,000 or 85000 prior to depreciating the plane.. But who cares since that has no bearing on the fair market value of his plane.all this means is forget adding and getting depressed .Unless of course you have a bastard GX model with no WAAS or ADSB is sight. That's shoots the hell out of my depreciation which has become a double negative(yeah a made up term) For those rat b%~##s Mooney  and Garmin, now for how I really real!

[jetdriven]

10 hours ago, Hank said:

"Ten year plan for radios and paint"??? The 430 was put into my plane in 1999; the paint was already several years old. Radio continues to work well after discounted early WAAS upgrade right after I bought her in 2007. I am continuing to get compliments on the paint job.

It is easy to get obscenely high hourly costs, just add up every penny you spend and divide by hours flown. Apparently Stinker and I think alike, where the hourly cost to fly is the expenses used to fly, which does not include the costs to own [hangar, annual, insurance, pitot static testing, GPS subscriptions, etc.]. To get the hourly costs many people here have, you've got to be including avionic upgrades [optional, nice to have], ANR headsets, Foreflight subscriptions, multiple ipads to run Foreflight, etc.--too much discretional spending not required to operate the airplane. Maybe there should be three categories:  operational [what it costs to fly]; ownership [the fixed costs]; and the Goodies [things you get because you want them]. I bet the latter would be the largest number for many of my fellow MSers . . .

Radios these days cost 20 grand, and a paint job can approach that. You can redo both every 20 years, or pay the next guy with discounts to do it when he buys it. Many Mooneys simply wont sell without a WAAS GPS and, 20 year old paint, while still shiny and airworthy, still goes out of style and becomes a value deduction.  so 30-40K every 10-20 years, its still a real cost. Lets be gracious and call it 30K over 20 years, thats still 1500$ a year.

[StinkBug]

I too am laughing at the 10 year radio and paint plan. My plane was painted last in 1975. It could use a paint job now, but it probably has another 5 years until it actually needs it. The #2 comm is definitely more than 10 years old, and the 430 probably is too. Honestly, this plane doesn't need to have money thrown at it. I bought it to fly and it does that very well, and I have no doubt it will continue to fly well for many years to come. There are an awful lot of 50 year old airplanes out there with original avionics in them. Just be cause newer is nicer doesn't mean it's a mandatory expense. 

I do believe in adding all the fixed costs into the math though. It's money that has to be spent to own the plane. It's not a variable like the fuel, but its money that wouldn't be spent otherwise. 

MPG, as for your math on my hours, I have no idea where you're getting those numbers because nowhere did I say what my fuel cost was, nor what my other hourly costs were. 

[mpg]

1 hour ago, StinkBug said:

I too am laughing at the 10 year radio and paint plan. My plane was painted last in 1975. It could use a paint job now, but it probably has another 5 years until it actually needs it. The #2 comm is definitely more than 10 years old, and the 430 probably is too. Honestly, this plane doesn't need to have money thrown at it. I bought it to fly and it does that very well, and I have no doubt it will continue to fly well for many years to come. There are an awful lot of 50 year old airplanes out there with original avionics in them. Just be cause newer is nicer doesn't mean it's a mandatory expense. 

I do believe in adding all the fixed costs into the math though. It's money that has to be spent to own the plane. It's not a variable like the fuel, but its money that wouldn't be spent otherwise. 

MPG, as for your math on my hours, I have no idea where you're getting those numbers because nowhere did I say what my fuel cost was, nor what my other hourly costs were. 

Sigh,,,,,       your post told me a lot about your costs,,,   I  dont need to break out a spread sheet in order to multiply,

divide, add and subtract some numbers that were the point of your request..   Oh well...

[CaptainAB]

Did you figure that the plane you would rent at 120 per hour is based on Hobbs time? That's a big difference if you didn't.

[Hank]

53 minutes ago, CaptainAB said:

Did you figure that the plane you would rent at 120 per hour is based on Hobbs time? That's a big difference if you didn't.

Aircraft maintenance, ADs, etc., are on tach time. Everything else is "real" time.mmymplane doesn't have a Hoons, so my logbook has actual time from the yoke clock for every flight. This should be the same as a Hobbs meter records. Isn't it? I've not used a Hobbs since I was a student pilot.

[CaptainAB]

I'll defer to the mathematicians here. But I believe if you multiplied the rental rate by 1.20 you would get the real comparison number against Tach time. 

[Marauder]

Hanks 430 and Chris's sweet glass panel are not fixed nor variable costs unfortunately there costs that should be capitalized therefore added to the basis of the airplane and approiately depreciated over the useful life of the asset(radio). I'm sure someone will attempt to categorize it differently and that could have merit since there are mixed use costs. It makes more sense to say Chris's plane cost 60,000 and his radio package was say 25,000 or 85000 prior to depreciating the plane.. But who cares since that has no bearing on the fair market value of his plane.all this means is forget adding and getting depressed .Unless of course you have a bastard GX model with no WAAS or ADSB is sight. That's shoots the hell out of my depreciation which has become a double negative(yeah a made up term) For those rat b%~##s Mooney  and Garmin, now for how I really real!

That was a fun read. Went from a CPA analysis to an angry Garmin/Mooney owner. If you were David Banner, by the end of your post you would have turned green and destroyed something.

The economics of plane ownership will never make sense unless you are using it as an integral part of your business or personal life. It is what it is. The purpose of my post was that no matter how many different shades of colored glasses you put on, there are real costs to plane ownership. Costs that can tear a family apart if you go into this uninformed.

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