Advice for buying into a share

The quintessential question is whether “share” is a share in a company (i.e. a special purpose legal vehicle that owns the plane), or if it just means each of the owners privately owns a share of the plane.
Legally, it depends on the laws in your country governing taxation (i.e. if you charter the plane out, which thresholds apply for your personal income tax, or is it easier to credit the associated cost, i.e. of a particular flight, as travel expense, etc.), liability (a limited liability company can offer a risk buffer in case of negligence i.e. in an accident with passengers) and of course cost sharing and other issues.

The most important question, above everything else, IMO, is how you get along with the other owners.
You must be positively and absolutely on the same page, just like owning i.e. a boat together, and you must get along well. Don’t underestimate how just one bean counter amongst you can ruin all the other guy’s lives. There must be common level of forgiveness and generosity, because you will face unexpected costs, and issues, and there simply is no place and no time for fingerpointing. Each one of you needs to have the funds available to cope with that, because if not, the club is bound for trouble.

And technically, of course, you need to have someone with you whom you can trust, who helps you inspect the plane before you invest.

So, I would go to an aviation lawyer, ask him what’s the usual way to shared ownership, and then you go to someone who knows planes, and take him with you to the first inspection.

There are plenty of questions which do need to be asked if you want to avoid getting into something that doesn’t work.

A search on “syndicates” digs out some threads which are worth a quick read.

The most important thing are the other people; what they are like. Try to meet them all and work out if you can get on with them and equally importantly if they get on with each other (which incidentally also determines the attitude the maintenance of the aircraft).

Lots of syndicates work and lots of syndicates don’t work And you will probably be welcomed at both, especially as the second kind will be even more keen to sell the share

An engineering inspection of the plane and the logbooks is a new one! I really doubt most newcomers do that, although it is a really good idea.

Are these two Robin types robust enough for “club” use? I have no idea but it is a Q worth asking. A search on “robin” digs out some threads, with some very “variable” reports on some types – example. It is very hard to sell a share if there are clear problems.

I have been a member of a syndicate for couple of years. Below some questions I would ask before joining:

• How is the group organized? Is it around an LTD that owns the aircraft? Is it a club? A trust? Do I actually own a part of the aircraft or is that 20K that I am about to transfer just a buy-in in the group?
• What’s the financial status of the group? How much money is in the bank for the next engine overhaul or unexpected repairs?
• What’s the profile of the other members? Are they students / VFR pilots / IR rated pilots? Ideally all members should have the same flying profile…
• What’s the group position on maintenance? Keep everything working? Or just do the bare minimum to keep the aircraft airworthy? This is going to be an issue if you are flying IFR while the others are not. Who’s going to pay for that broken VOR unit
• How are decisions taken? Is there a chairman that ultimately takes all decisions, or is there some democratic process?
• How do I get out of the group?

Another very important question you should ask yourself is, how many owners can one aircraft stomach, and what is their flying profile.

Normally, a syndicate only works if each member produces approximately the same flight hours. If not, sooner or later you WILL face discussions about the fixed and unexpected cost share. If one or two persons in the syndicate are flying visibly and repeatedly less then the others, the fingerpointing will eventually start when unexpected issues arise. That’s what I meant: If there is a bean counter, he’s gonna present you with spreadsheets about usage, and i.e. if there is a cylinder due for repair, and the syndicate faces cost of 3k or more, the argument will be, ‘hey, you guys are flying more, therefore you should pay more of the cylinder’. Which is a road you definitely don’t want to go down.

I had that in a boat, once, and it was a nightmare.

There are ways to mitigate that, i.e. you can put the plane into a company, from which everyone then rents the plane by flight, and different usages can be expressed by different share sizes in that company, but there’s a limit to how much such a model can divulge, and needs a balance sheet, a tax statement, and adds complexity to your life.

The other question is, the more owners you have, usually the more overlapping in flight time you have, which can lead to a lot of fuss, especially in the summertime when there are only so many good weather weekends to fly. Again, that leads to complexity, i.e a calendar, and agreements on how soon you guys can book, and all that crap which you really don’t want. You’re not a flight school, but you’re going to start looking like one.

My opinion, just my two cents: go for two owners, you and one other person. Maximum, three. But not more.

A syndicate remains the best way to fly long-term if you want to fly a reasonable aircraft and not pay the high hourly rates typical of pure rental.

You just need to make sure you get into one which works well.

It is normal to get a lot of negative input, but that’s how life is… the live-and-let-live approach usually leads to one disaster after another. One needs to check off the known negatives, to be left with the positives

In life, disasters normally welcome you with open arms

I didn’t want to give the impression a syndicate is negative, in fact, quite the opposite. It’s just important to find the right one, but once that’s done, I guess it’s the best that can happen. Half the cost, nearly all the fun, and a way to fly an airplane which I neither could have rented anywhere, nor wanted to afford all by myself.

Personally I highly recommend zero-investment syndicates where you pay a fee each month to be a member (usually subject to a minimum) and then just rent at a special wet rate. Reasons being:

• You can walk away at any time (subject to minimum notice periods)
• You obviously pay no big lump sum up front
• The maintenance should be higher quality than an average syndicate because if the owner skimps on it then everyone walks off
• No unexpected maintenance costs (this is covered by the owner)
• One person makes all the decisions so you don’t get arguments about equipment etc

You will generally pay more for this arrangement than putting the capital in up-front (I have this on a Robinson R44 and I need to fly 19 hours per year to break even vs self-fly hire – which is relatively A LOT for private rotary) but you do get a lot of flexibility. And no unexpected big bills.

I wonder whether the helicopter business is different from fixed wing GA, however.

In FW, the lower the commitment, the …