What value is your aircraft?
I’m not talking about what your aircraft is worth! That is a whole different subject. What I am asking is what value does your aircraft provide? Does is bring value to your life, family and business? How?
We at Plane Connection firmly believe that an aircraft is a tool intended to do a job and add value to your life. If that value is purely for the fun of it and you have enough money to play……. AWESOME! But I want to talk with the rest of you. You love aviation, love airplanes and/or want one! But is the value that it gives worth the financial expenditure of ownership? In past blog posts we have provided a free aircraft cost calculator, so if you haven’t figured that out go get it.
We all agree that what an aircraft gives is time, ie less time spent traveling and more time doing whatever you do. What is your time worth?
“Worth” is a subjective term, the definition often is up to you. But dollars and cents are not subjective, so let’s talk about them. By the numbers I have seen a middle level employees time is worth 8x their hourly wage to their employer. So if you make $150,000 per year and work 2,000 hours per year, your hourly wage aprox. is $75/hr. Your value to the company is approximately $600/hr!
Let’s break this down on an average work trip of a team of 2 people working at that $600 level.
New Bern, NC - Savannah, GASingle Day Round Trip
12hr Time Wasted, Cost $406.08*
15hr Time Wasted, Airline Tickets $1,007
So what is your time worth? If your time is worth $600, driving your team of 2 is like wasting $14,400. WOW! How can afford not to fly? But, the airline’s wasted time still equates to $18,000. You can fly a C172 on that route of flight and still save time and money.
Now we getting down to the value your aircraft can give you!!!
Now, I know that I’m speaking about a business trip and you may not be that business person. How does this discussion equate to you? You can still use this type of valuation on your time and what you do.
I challenge you to do the math!
The next question is how do you extend this type of value to the community around you? Yes, I’m getting at a 135 charter certificate. And Plane Connection is working on ways for your aircraft to give value to your community! If this idea intrigues you contact us to learn more.
For all of those who have traveled and many who have not owning an airplane seems to like a movie, or at least the status of stardom. Many people and companies (primarily business owners) have had the dream or someone initiate the reality of aircraft ownership at some point in their life. Although, many of these clients are not truly expecting the pains of aircraft ownership as may be pilots to a certain degree. This group of people are in some ways lucky not to have the biases that pilots do, and are more willing to look at what it is they may need out of an aircraft and not so much of what they think that they may look like. The downfall to this is everyone knows someone who is a pilot, or thinks they are and expert in aviation. The truth is that unless this is something you do for a living you cannot call yourself an expert in these matters. I mean I know how to play baseball but I never played pro.
So, during the last few years I have been getting more involved with the management of aircraft as well as the education of such a great time. The first time I bought and airplane I was told the best day of owning an airplane was the day I bought it and the day I would sell it. I never could understand that, until I had my first annual. It was 4000.00 USD. For a AA-1B Grumman. This was 100hp, 2 seat beast of an airplane that in a dive with a tail wind fully loaded may break 115knots. Not what I would call a babe magnet. Yet what I learned from that was many of the things I have shared with others. See the problem with owning an airplane is it is not like anything else. Not a boat, a house, a car, a horse, nothing. It is a highly regulated and supervised asset that is respected by all and only when some one who is carless, and selfish takes hold of one do they become not what they are meant to be. Unlike Cars and Boats that all you may need to do is pass a yearly inspection and make sure your tags are current, airplanes come with so much more regulations set by congress the FAA, Aircraft manufactures and pilot organizations for the safe handling and utilization. This is where things become tricky.
Cost is always a question when it comes to aircraft. Many people ask me how much a the standard aircraft cost to which I reply what’s standard? It ranges Cessna 150 14,000.00USD to 55,000.00USD. By the way if your willing to buy a 150 for 55k call me I will sell you mine. But a Gulfstream 650: 65 million to 100 million. The cost is relative to the nature of the aircraft. The thing that will really drive home the pain is the cost maintenance. This is not because people do stupid things in aircraft, it’s because they see the asset as a Toy. Many people equate the ownership to a car or boat. And understandably this is all they know. See when you by a car you have a warrantee and out side of tires or a oil change limited things have to be done to a car. The DOT doesn’t require at 100 miles and inspection or a mechanics sign off. Nor dose the Cost guard or Deer and Wildlife office for a boat. But the FAA on the other does at a 100 hrs. See the problem is not in the ownership of the aircraft it is in the understanding of what it take to own it.
Like I stated earlier, many of us pilots and non-pilots alike when dreaming of owning and airplane start to look at the initial cost of the aircraft we think we want. So we go on the Internet, or out to the local airfield and start window-shopping. By the way I am way good at this. Then we find the aircraft that we think we want based off of looks and start to narrow down color, or avionics, of interior, or what ever else you have in your mind. This is the first thing that will start a bad day coming. We then go home and try to convince our family members of the great abilities and utilization of ownership until we get enough support to really adventure off to look for an airplane. Once we have found the aircraft we may look at what needs to be done before you buy and airplane or maybe not. If you get a per-buy done what dose it tell you? Unlike a car an airplane can look fine but that just cause the last owner did enough to give a showroom feel. Following this you buy the aircraft, park it at the local FBO or hanger that you bought, and then the fun begins. The first year you fly it every possible chance you can paying for gas and oil when needed, maybe an oil change at 100hr, and a year goes by then it comes time for annual. Now a normal annual on a single engine GA aircraft probably runs between 700-1500.00 USD. But since the average GA pilot that is considered experienced is one who fly’s only 50hr a year, you ended up flying 300+ hours now your annual cost 4000.00-5000.00. Bad day right?
Lets say you are non-pilot and you own your own company. Having an aircraft would a great tax write off and increase your ability to provide your goods or service to your customers as well as increase your flexibility. So you go out and look at an airplane think about how fast it goes calculate the time to get to your average distance and then find an aircraft that meets those needs. Or worst yet, see an airplane that you remember your family member who use to fly tell you stories about now you only want that one aircraft. You buy it, hire a local pilot who only cares about getting flight time, and works for substandard pay, doesn’t properly fly the engines and a year passes. Annual comes up and you now have a cost of between 5,000.00 and 8,000.00 USD for just the things that have to be addressed. Bad day right?
See the problem is not owning an airplane, it is the ownership of the wrong aircraft and lack of understanding that it is not another toy you have to go out and play with. And airplane is only a Toy when you can self insure it and modifications, for safety and reliability are no worry to you. Other wise the best solution is the knowledge of proper asset needs evaluation, and utilization budgeting management. These seem like big terms but they are just what they state. Lets break down what I mean.
Owning something that if you broke it tomorrow would not completely lose all of its value or potential value based on your negligence or mishandling, would be a toy. A asset you can utilize that fulfills your desires to what I like to call the 75% solution, while reducing the or minimizing the overhead and or hourly cost is what I would call a tool.
Owning and Airplane starts with a few factors: Regardless of you being a pilot or not, like I stated earlier if you don’t do this for a living find someone who dose. When your interested in owning and airplane you need to look at the 75% mission you think the aircraft has going for it and realize that only 25% of the time will that asset be really doing that. Second is looking at the scope of the operations that you want to accomplish and evaluate the need economy or efficiency. Third, before you do anything call a professional and pay for and hour of their time. Many of us who do this wont even charge you until there are a physical aircraft to go and look at. If you need help understanding how or better yet what may be the right aircraft for you this is the time to call.
See the most frustrating thing for me is to watch as people abuse the aircraft, blame the pilot, and leave aviation due to their personal misuse and understanding of what they are getting into. Aircraft, a tool designed to increase range and comfort, while reducing time spent away, or money lost on expensive trips. It is when you understand this that an aircraft is able to utilized for its full ability. Remember, unless you could lose the asset tomorrow and walk away with blinking an eye, this is a tool not a toy.
If you find yourself in one of these ways please call us, or email. We can help get your asset back to proper working without risking your long term happiness.
TheConnection Blog is a combined effort of the Plane Connection family and occasional guest contributors. You will find that while we are in the Aviation Industry, we are really in the People business. So we write about airplanes, the industry, training and life in general.