New Flying Club Forming at Auburn, WA S50

[Steve Hughes]

I'm looking to start a flying club this year and ultimately buying a vintage Mooney.  The club would start out with five members who would form the club and purchase the plane, and then we'd add an additional five members bringing the total to 10 members.  If you're interested in joining or for just more information, please PM or email me. Based on a pro forma I've developed so far, it looks like the buy-in for a 1/10th share would be $4,600, monthly dues of $150, and hourly rate of $57 (dry).  Interested parties will be provided the detailed financial and other information.

I've done a lot of reading about forming a club, including the lengthy but informative guide published by AOPA, but any advice from the members here would also be very valuable.  Wish me luck!

Flyer.pdf

Edited January 16 by Steve Hughes

[Fritz1]

I was in a flying club with a 182RG until about 7 years ago, typically 3-4 members, aircraft was owned by a corporation that belonged to one of the members. Buy in $6K refundable, $300 per month fixed, $50/h dry. Aircraft flew around 250h per year of which I flew between 100 and 150. All maintenance was done by the FBO. I never saw the financials, aircraft was certainly subsidized by owning corporation which owned other aircraft and was a depreciation vehicle for the owner. With hindsight commercial maintenance and solvency of the owner were key to success. By default I was acting maintenance test pilot and maintenance manager making sure that the aircraft was ready when the owner wanted to fly. Overall good deal for everybody at the time. Things get more involved when people own equal shares and do their own maintenance.

[UteM20F]

This sounds similar to our setup, though we are just 4 owners.  Two suggestions:

1) Investigate insurance options early.  Most insurers don't want to insure more than 4 named pilots.  Avemco will go as high as 5, but you pay 20% extra.

2) Be sure to collect enough up front from each member to cover a difficult annual.  This could easily cost upwards of 10 AMU.  You don't want to have to assess everybody a bunch of money in that first year.  Or ever!

Good luck!

Ute

[Steve Hughes]

Thanks UteM20F.  I did contact AOPA's insurance contact and they did say that "while we're not thrilled about this", they then gave me some requirements they would require for experience in type and make and model and a budgetary cost (which was almost double what I've heard most folks pay) so I was able to work up a feasibility pro forma based on that.  I would hope it would come down after members can show more experience over time.

In AOPA's "Guide to Starting a Flying Club" they bring up this insurance issue and do say that over 5 insureds can be problematic until you get up to 10.  And they recommend a club size at 10:1 (members:plane) ratio.

And great point on getting a reserve up front to cover the unforeseen glitches that would come up at annual inspections.  I'm budgeting for 100 hour inspections as well; does your club have this done or just the annual?

[wombat]

I had some extensive discussions with my insurance agent last year.

For 1 to 5 people, from an insurance perspective it's just a co-ownership situation, regardless of how you have formed the group's finances.

For 6 to 9 people, it's a 'club' and the rates are roughly 2X the rates for co-ownerships.

For 10+ people, it's a 'rental' and rates are roughly 4X that for co-ownerships.  This does not mean you can rent it, but that the rates are similar to what they would be if it was a rental aircraft.

[UteM20F]

3 hours ago, Steve Hughes said:

And great point on getting a reserve up front to cover the unforeseen glitches that would come up at annual inspections.  I'm budgeting for 100 hour inspections as well; does your club have this done or just the annual?

We are all co-owners, not a club, so not necessarily apples to apples.  We do not have 100 hour inspections.  Our plane is just coming out of its 2nd annual since we bought it, and it will be almost 10 AMU.  The first wasn't too bad, but we realize now that the A&P didn't do much.  This is the 2nd time we've had to assess everybody, with the 1st being with the panel upgrade that cost WAAAAY more than we were expecting. 

You mentioned that you're planning on $50/hr dry.  We are at $55, which includes engine/prop OH reserves, $20 for maintenance, $9 for oil, and $3 for 500 hr mag inspections.

We also paid enough at startup to pre-fund the engine and prop overhaul funds based on the hours since overhaul at that time.  We've used that cash to help even out the unexpected costs along the way.

Ute

[Steve Hughes]

22 hours ago, UteM20F said:

You mentioned that you're planning on $50/hr dry.  We are at $55, which includes engine/prop OH reserves, $20 for maintenance, $9 for oil, and $3 for 500 hr mag inspections.

We also paid enough at startup to pre-fund the engine and prop overhaul funds based on the hours since overhaul at that time.  We've used that cash to help even out the unexpected costs along the way.

Ute

The budgetary insurance quote I got from the nice folks at AOPA (checking with their affiliate) was for $7,950/year, which I know is high compared to a single pilot-owned plane.  For the hourly rate, I included a 100 hour inspection at $1,100, three oil changes at 50 hours at $150 each per year, oil consumption at $1.20 per hour, $25/hour engine overhaul reserve (assuming we get a plane with <1000 SMOH), $10/hour prop overhaul reserve and $10/hour general maintenance.  So total hourly rate rounds up to $57/hour; so you and I are pretty close, although I have the 100 hour inspection and you have the mag inspections.

AOPA also has a great spreadsheet calculator that helps take the amortized dues and hourly rate and with fuel added (we're currently down to ~$5.50/gallon), I'm coming up with a cost per hour of $125.25 plus state tax including fuel flying 8 hours per month.  More hours lowers the rate, less increases it.  I was paying $182/hour to rent a C172 trainer at an airport where I'd be on the ground in the queue to take off for at least 30 minutes and downwind in the pattern was frequently extended as much as 5 miles before turning base.  I appreciate everyone's insight!

[Pinecone]

One thing, remember the full insurance payment will need to be paid upfront. 

[Utah20Gflyer]

Are you sure a 100 hour inspection is $1,100?  My last annual, which was a “cheap” one was about $3,400.  Don’t 100 hours require everything an annual does?  
 

My first annual was roughly 13k so I’d budget for some catch up maintenance unless you buy a plane at the top of the price range that is immaculate.  

[Hank]

I'd love to fund an $1100 annual! When nothing is wrong, defective or broken, my C runs about $1800. A "bad" annual can be four times that . . . .

Using the list from Mooney's website, 20-24 hours are required. What’s your A&P's hourly rate? Do the math, bump it up a little for things that go wrong. 

[hammdo]

Mine this year is $6k - new controls, hardware, cylinder pulled, and normal annual. In the past few years $2k-3k if nothing big shows up. Not counting the maintenance I do during the year to avoid big annuals…

-Don

[Mcstealth]

On 1/20/2024 at 3:09 PM, Steve Hughes said:

 

AOPA also has a great spreadsheet calculator that helps take the amortized dues and hourly rate and with fuel added (we're currently down to ~$5.50/gallon), I'm coming up with a cost per hour of $125.25 plus state tax including fuel flying 8 hours per month.  More hours lowers the rate, less increases it.  I was paying $182/hour to rent a C172 trainer at an airport where I'd be on the ground in the queue to take off for at least 30 minutes and downwind in the pattern was frequently extended as much as 5 miles before turning base.  I appreciate everyone's insight!

Hey Steve, where is that spreadsheet located in the AOPA site?

 

Thanks

David

[Mcstealth]

I found it. Thanks for mentioning it. 

[Steve Hughes]

Just an update on the financials as we get more and more accurate information.  We have the insurance companies agreeing to finance the insurance with 40% down, and got a quote from an on-field A&P for the basic annual of $3,162.  One interested pilot called me and recommend we seriously look at upping the budget to also consider the J model.  And I also have watched a number of videos from the great Mike Busch who strongly recommends a thorough pre-buy and then maintaining the plane to extend TBOs as much as 250%.  So we're considering dropping the overhaul reserves and plan on a special assessment for eventual overhauls, which would be roughly $2.5 - $3k, and several years down the road.  With this revised budget the pro forma numbers look like: Buy-in -- $5,500, Monthly dues -- $153 and hourly rate at $51.  (All of these numbers will get further dialed in once we all get closer to securing the plane and bringing it home). 

We've gotten our state license as a non-profit corporation and are listed in the AOPA Flying Club Roster.  We currently have six folks who have expressed strong interest in joining.  Hoping to get the club off the ground by this spring!  If you're interested don't hesitate to check out our website and send me a message with your contact info.

[Pinecone]

As everything in aviation is more expensive than you expect, I would round things up.  $6000 buy in, $175 per month and $55 or $60 per hour.

After the first real annual, you can readjust down if needed.

[Steve Hughes]

Just an update on the club.  We are established with the state and feds and are getting some good "very interested" responses.  With lots of new input and information, I did an overhaul of our website which I hope will generate even more interest to get to our total of 10 members.  Check it out:  www.BlueSkiesFlying.Club

[Mcstealth]

Hey Steve, nice set up on the web site. Good stuff.