Just been reading about this in the last-1 US AOPA mag.
It is acknowledged – even in the USA – that the flight training business is severely short of capital, so as well as the Continental (Thielert) engine conversion and dropping in the Aspen EFD1000, they are doing a per-hour leasing deal which gives the school a fixed operating cost, with no extra costs if they end up under-utilising it. Without the leasing, the typical purchase cost of the converted plane would be $250k – against a new C172 costing $400k (which almost nobody is willing to pay).
I doubt such a leasing deal would be extended to European operators, but one never knows…
It should be no problem doing that in Europe, there are banks specializing in leasing of GA airplanes. One of main protagonists in Germany is here in Stuttgart. I think the rental fleet of one of the aviation magazines in Germany used this bank.
You can do a leasing on just about anything that has a resale value. An airplane and a high end car are not very different when it comes to depreciation. Just the market is a bit smaller.
Redbird is one of the most interesting developments in aviation in my opinion. This $250k airplane is significantly better than the $400k new offering from Cessna. It has to have an impact. We see quite a bit of activity in the airframe refurbishment area, it might become a big thing.
I do not think anybody will do a deal where you do not pay if you under-utilise the plane. I think you can lease a plane but they will probably want a monthly fee like on cars maybe with an extra payment if you fly more than a certain number of hours. And you will risk that the bank will only offer a very low warranted final value at the end of the contract because the used plane market is much more difficult then used cars. In addition on a lease deal you will probably loose all choice concerning maintenance and change all parts at tbo etc. So I think a lease deal is probably not a good choice for a GA airplane.
My hangar neighbor leases his aircraft. All factory new of course. First he had a 182 Turbo, the after 3 years a SR22T full spec which is now nearing its lease term and he is looking at what the next one will be. VFR licensed pilot with a factory new 911 Turbo in yellow.
Leasing for GA airplanes is rather common.
I do not think anybody will do a deal where you do not pay if you under-utilise the plane.
Yes – sure there has to be some condition, otherwise everybody would say “Hey let’s get one of these and just have it sitting there”
I don’t think the article I saw was detailed to that degree.
But “pay per hour” is done on big jet engines so some mutually acceptable formula must exist.
the used plane market is much more difficult than used cars
I am not actually sure that is true if you set the right price and really want to sell.
I think when somebody wants to sell their car it is because they want to sell their car. Often because there are major repairs coming up But often just because they want a change, or whatever… so they get onto autotrader.co.uk or whatever and see what they can get, and set the price, and sell it. We sold Justine’s mum’s 15 year old Merc A-Class (“Z-Class” actually, if you knew about the problems with it) for £500 last week… no sadness whatever; in fact the very opposite (asking price £775). So it sold for about the cost of a replacement Merc windscreen wiper motor.
But when somebody wants to sell their plane, you get a small % who are selling because they want to sell and they price it right, and the rest are people who are selling because they have to sell but they hate the thought of losing their plane so they set the price at a silly level which nobody will pay, people who have to put their plane on the market because they are short of money / divorcing (but don’t actually want to sell), people who have lost their medical and put the plane on the market at a silly price while they are trying to get it back, people who spent 5 figures on avionics which don’t do anything they find useful or can even understand and want to get it back on the sale (so will never sell), and every combination of these.
I would bet Redbird are snapping up shagged but not airframe corroded C172s for something like $30k, throwing $100-130k at them, and doing well out of it. Plus they get a kickback from the bank. Somebody in Europe could do that, too.
My hangar neighbor leases his aircraft.
A brave man… unless it is a Cirrus and he drives a factory new 911 Turbo in yellow
I would bet Redbird are snapping up shagged but not airframe corroded C172s for something like $30k, throwing $100-130k at them, and doing well out of it.
That will have to be considerably more. The Thielert conversion costs that much already.
Plus they get a kickback from the bank. Somebody in Europe could do that, too.
I think critical mass is important and airplanes can be flown from the US to Europe. Don’t see any competitive advantage a European outfit would have. Maybe that Thielert is around the corner but that’s probably it. The transport costs will be more than compensated for by the economy of scale.
However, it is a great market and should be applied to more than the 172. Next should be the 182 with SMA, it can be done for much less than Cessna’s new price. Then a PA28 with Thielert 2.0s. Not just offering conversions but like new airplanes with warranty is what I think would sell.
We’ve already been down this road. When I suggested it I heard no takers. What happened in the meantime?
From the article
What really needed is this airframes to get into the flight training environment a busy school would put 700 hours on an airframe in a year. That would prove it.
The problem they have at the moment is that schools don’t have the capital to take the risk to my knowledge it has bankrupted two schools in the past. I do however know of one operator who swears by the theirlet and another school has recently acquired (bought or leased I don’t know – multiflight) three diseal PA28 and I hope they get on well with them. The bit I can’t however understand is the hire price is more than the AVGAS machines that they replaced.
Leasing diseal powered aircraft is an option in the UK but the company that does it (or did do it) is based in Bournemouth. But I would be reluctant to lease an aircraft from a maintenance base more than say 30 miles away.
<This $250k airplane is significantly better than the $400k new offering from Cessna. It has to have an impact. We see quite a bit of activity in the airframe refurbishment area, it might become a big thing.>
Knowing Cessna who from a piston point of view appear to be a very conservative company will simply wait and see if its a success and if it is then they will simply produce one
I think Redbird have some ulterior motives here. A little bit like Apple, if you may. They make Sims of various descriptions which they sell to FTOs for instrument and in some cases part of the ab-initio training (there’s one where I fly from in KSMO). Now, they come with the ‘real article’ and slowly, but surely, build an integrated package. Redbird Sim to Redbird C172 to, perhaps Redbird MCC Sim, etc. Clever.