This topic has come up a number of times…
It seems that if the owner is not fussy about the condition of the plane, it can give him very cheap flying because the school is picking up most of the fixed costs.
The then owner of G-SARA (PA28-181 I flew post-PPL) long term leased it to a school, many years ago. He apparently didn’t fly it except a long trip (2-3 weeks’ holiday) once a year, and keeping your own plane for a purpose like that would be utterly meaningless, and likewise renting would have cost a fortune (the minimum daily billing from a school would have been 2-3 hours). So for him it was a good deal.
However I found that the owners of certain schools were quite clever in negotiating a package attractive to them (well, obviously – it’s their business and many have been in it for decades) and a novice in the ownership game could easily fall for some cock and bull proposition. I was at the end of one such “deal” and after a year abruptly terminated it (the chap was pocketing fuel futy drawbacks resulting from my flights, among other things).
I’ve been at the other side of the table. Clearly the idea is to minimise each other’s costs another’s always going to be some horse trading.
Put simply, if I were an owner looking to maximise spare capacity I would only do it on a higher-end aircraft with some specific criteria. Notably, only used for advanced training (i.e. IR etc), not to be used for self-fly hire (unless the individual concerned is personally know to me) and absolute clarity as to who is responsible for wear-and-tear (complete with a definition). The leasing agreement needs to be watertight.
Interestingly, I had the same thing w.r.t. no-solo and this seemed OK since IR training (the main purpose of the deal I was doing) is all dual.
But after some months the utilisation was miniscule – a few % of what was “promised” and the prohibition on self fly hire was given to me as the reason.
I think if it is an “interesting” aircraft and not a basic trainer then this can work well. The aircraft will limit the number of pilots that are capable of flying it. Then you are very selective on the pilots to whom you give access – its pretty easy to work out the good ones. It doesnt result in huge number of hours, but it makes the difference between the aircraft sitting in the hangar for longer than it should, contributes a little to the running costs and, in my experience, adds to the “fun” of ownership because inevitably yu will share the odd flight. I’d do it direct with the pilots or freelance instructor and not with a school. That way you remain far more in control of the arrangement.
From my experience it doesn’t work. I tried this with my TB20 via school that I co-owned and it didn’t work. The number of pilots who were capable of flying it was minimal and cancellations were so often that it became useless to bother with it.
I bought my plane from a school who had it as an advanced trainer and have been working with them since. I do not lease it back to the school per se, but the school has occasionally used it and does all the training flights the pilots flying my plane need. Additionally to that, I have some pilots who learnt to fly this plane while it was in the school still fly it today and pay me cost for their hours, which corresponds to a hourly rate determined by the previous year’s flying. It is a definite win-win situation.
For me, this has worked very well indeed. Combined we get the airplane to an amount of hours which allow me to keep it going. The pilots who are flying are all known to me very well and I have a really good relationship with them.
One friend of mine who recently acquired his first plane has actually got a leaseback agreement with his flight school, which also works quite well in his favour. He also bought the plane out of that school so it is simply a continuity of previous operations within the school. Also this plane is not used for basic training at all but only for advanced and IFR training.
So yes, it can work well if you know the school and know the people involved.
I stopped that with my Piper Warrior after I found out that I had to invest more into maintenance and additional repairs that what I would make. While most pilots were careful and treated the airplane well there were always some who would scratch the windows, push the airplane at the spinner (and destroy 2 spinner bulkheads, € 400 each) … After the airplane was once parked with the Master Switch and the rotating beacon on, with the door open in the rain (“i had an important meeting”)… I quit.
One killer for me was the £6200/year insurance premium for “club use”.
Myself, I pay about £2500 (2000hrs CPL/IR) and never paid over £3000.
One needs a lot of usage to get back the extra 3k+, never mind any damage.
I got pushed fairly hard to put the plane “on the school’s fleet” and that would save on the insurance but there were conditions attached… I knew I would lose control because of a contract preventing me from quickly removing the plane.
Flyer59 wrote:
After the airplane was once parked with the Master Switch and the rotating beacon on, with the door open in the rain (“i had an important meeting”)… I quit.
Yea, well, that is why I only give it to people I know. Either the FI’s or the actual pilots. In my case, I know both of them. And the code of conduct of that flight school will keep people really on their toes NOT to do stuff like that. In my case, anyone doing something like that, a) fully gets billed for the damage and b) will never fly again.
Peter wrote:
One killer for me was the £6200/year insurance premium for “club use”.
Wow. My premium increase is about 10% over the normal premium I’d have to pay as a single pilot. That is really a killer indeed.
As an individual owner leasing a plane to a school is a loser, at least in the USA.
Aside from the owner paying for annuals, 100 hour inspections, oil changes and maint. not related to damage by students the small tax treatment does not offset the depreciation or create a positive cash flow for several years. And the insurance rates for the owner will double or worse dependent on age of the aircraft and who the underwriter is…
The other ‘dirty secret’ is the owner remains liable when a serious crash happens especially when involving personal injury or death. Even if the school carries liability insurance. When people sue they include every legal entity connected to the plane and the incident.
Best to sell the plane outright or gift it to someone and get out of the plane entirely if you no longer want to fly it regularly.
