Buying your first aircraft by Hannes Enslin

You have been dreaming about it and you have always wanted to do it. You want to be the proud owner of an aircraft. What does it entail? What is involved? The idea here is to guide you through the process of acquiring your very own aircraft. We hope to give you detailed information as to how and what to expect as well as what to do. We will ask some questions and answer them as we progress.


This is the first question to ask. This is probably the question most people ask first and foremost and rightly so. The easy answer to this is that if you regularly fly hired aircraft, for somewhere between 150 and 200 hours per year, it probably means that you can start looking at buying your own. The way to determine this, first and foremost, is to do some intricate mathematics to determine what ownership will cost. Now, there are a few variables here. Direct and indirect costs are involved. Let us start with the indirect costs. These are costs related to the aircraft ownership whether it flies or not. They are: mortgage loan repayments — if it was purchased with a loan, insurance, hangarage, mandatory annual maintenance — regardless of whether an aircraft is flown or not, airworthiness currency fees, annual radio license fees and avionics maintenance All these are fixed costs and are payable even if the aircraft has not flown a single hour! The direct costs are the costs involved in actually keeping the aircraft in the air. This include: fuel, oil, landing fees, ATNS fees, and if you are a prudent owner, also provision for the overhauls of both the engine and the propeller. The long and the short of affordability can best be explained in the example below. If we look at a Piper Cherokee 160/161 with:

Half life factory remand engine and half life since new prop

A Decent King digital avionics stack (this has 2 x Nav/Com 1 with GS, ADF and DME with a VFR GPS)

Recent interior and exterior refurbishment

All Airworthiness Directives are up to date

The aircraft is perfect for you.



The asking price is ZAR400 000 and one has ZAR100 000 as a deposit but will have to find finance for the rest. We have spoken to the bank and they like us and have pre-approved an amount to enable us to purchase the aircraft. CAN YOU AFFORD IT? Now that we have put this on paper, let us look at the rest of the details. Your intention is to use the aircraft for your trips to your own farm, two hours flying time from your home base airport. You will make two trips every month totaling eight hours per month. Then you will visit your other farm in another part of the country at least four hours flying time each direction at least once a month, but you suspect it might be 15 such flights per year.

Thus, your expected annual utilization looks like 200 to 250 hours.Let us take the indirect costs, totaling R107 050 and divide that by 250. This comes to R430. Now add to that the R487 that we calculated as direct and we end up with R920 per hour. This is expensive but — and it is a huge BUT — it includes the interest on the mortgage that amounts to R300 per hour for the five years you are paying the mortgage. Thereafter it will be considerably less. I suggest you speak to a bookkeeper to assist you in calculating the real effect of the mortgage interest. If you buy cash it is a different ball game altogether, as the total will be something like R620 per hour which includes virtually everything, including provisions for the maintenance. The cost will be relatively high but one very important factor is that the aircraft is yours and you have control over it. You can decide when to fly and not to fly. Nobody is going to book it when you want to use it. Another advantage is that it will not lose its value. It will at the very least retain its value but probably increase in value especially if it is properly cared for.

So you have decided

You have made the decision to buy. Which aircraft should you buy? Well, that question should be very easy to answer. When you started flying you learned to fly in a basic uncomplicated aircraft that allowed you to learn the basics instead of battling with the advanced systems. Therefore our suggestion would be that you follow the same route when looking at buying an aircraft, especially if it is a tough decision. Remember the saying, “Got time to spare? Go by air!” It is for good reason; most second hand aircraft have a history. By this we mean second hand aircraft may have some snags and snags cost money That seal on the retractable undercarriage hydraulic actuator could cost about the same as the MPI on the fixed gear aircraft. If you are wondering if you would be able to afford the cost, stay away from complex aircraft for a start. Learn the ropes of ownership with a basic low-cost aircraft.

We can always help you to upgrade later, but to have a fancy aircraft stand in the hangar because you can’t afford to maintain it, is much more expensive than buying now, learning the ropes and selling after some time to get the more complex aircraft. Stay away from aircraft that are not very popular. They may be very cheap and their deal might look attractive, until you need to get an instructor who is rated on the aircraft to do the conversion… Oops, he is out of town or country and will only be back in 3 months time… and sorry he is the only one rated on the aircraft in the country… Oh yes, and sorry the only workshop that is rated to work on the aircraft is in “Put-sonder-water”… and yes, he is not all that keen to work on this type as the spare parts are hardly available and require special import. < Now, the aircraft cost you nothing but the maintenance is KILLING you. After the costs of ownership for the first year are calculated you are at 1.5 times the amount you would have paid for an aircraft like a Piper Cherokee or Cessna 172 that are very popular aircraft and almost every maintenance shop and instructor can help you with the conversion to type. If you add the extra costs of an unpopular aircraft’s maintenance, plus other fees, to the purchase price they will amount to what the more popular ones cost. And you can’t get rid of it for nearly the amount of money that you paid for it. Sorry, some in aviation circles say, ‘You have married the aircraft!’ Not even a divorce will get you out of this one!

There are a few types you can look at:

An aircraft similar to the one you trained in. If you trained in Cessna 172 any of the following models such as the 172, 182 or 206 is probably a good choice.

Something that is not complex in terms of systems and equipment.

The Cessna, Piper, Beechcraft single engine range, with fixed undercarriage are more likely to be a wise choice as a first aircraft. They are popular, most AMOs (Aircraft Maintenance Organizations) is qualified to work on them, and they have relatively limited systems.

An aircraft which is not too difficult to get an instructor to help you with the conversion or type rating.

Most important of all. Most of these aircraft are going to be much easier to sell when the time comes to upgrade. If you want to bail out, you will probably get your investment back, less some costs, but you are not married to the aircraft!


The first option is being the sole owner. It says it is all yours, only yours and you also take the responsibility. The next option is a partnership. This is a group of pilots co-owning an aircraft. Each has limited utilisation and limited responsibility, in terms of the aircraft costs. In aviation, this can be very successful and also very unsuccessful. It all depends on the relationships between the partners. The biggest advantage is cost sharing.Another option that is a rather larger partnership is a flying club. Here it is often the scheduling that has the biggest headache. The aircraft is actually rented to club members at a reduced cost. The aircraft is not really owned. A new concept that is making some ground is fractional ownership. In this, a management company is responsible for the administration and scheduling. The owner buys shares in an available aircraft as a proportion of the total number of shares owned, and also with preferential conditions, if required. The company takes care of the rest. This makes it possible to fly newer, more complex aircraft at a fraction of the cost of complete ownership and with much less headache.

Issues that determine ownership and which should be discussed in detail by prospective partners, other co-owners or club members are:

Aircraft type to be purchased

Airport issues

Scheduling issues

Operations minimum qualifications etc.

Maintenance; who, where, what, how breakages?

Modifications

Financial commitments


The process of acquiring your aircraft

So you have decided you are buying! Take some time and get more information. Go through the advertisements of aircraft in the market. Very few owners are prepared to give sales companies a sole mandate, so you will probably find that the guys are all advertising the same aircraft with different prices. But do your homework. You will need, at least, the information below to start considering an aircraft. The total time the aircraft has flown since it was manufactured.This is shown with the acronym TTAF in advertisements. It is usually considered that the lifespan of a light general aviation aircraft is around 10 000 to 15 000 hours. It will depend on the regularity or irregularity of its utilisation but that is a good rule of thumb. You can thus determine how much of the useful life is left by looking at the TTAF in the advertisement.


This will probably also indicate if the aircraft is due for X-rays to determine metal fatigue or other underlying problems with the airframe. The next important factor is the condition of the engine/s and propeller/s on the aircraft. The engine hours will show the number of hours flown since new or since the last overhaul. It is also important to know the Time between Overhauls (TBO) for the particular aircraft. It varies within the same model and has to be checked. For example, the Cessna 400 and Piper Seneca ranges have different TBOs within the same range of aircraft. Advertisements will show SMOH or TSOH to show time since overhaul. Sometimes it will show TBO for time between overhauls. TSN or SNEW is used to show time since new on engines and Propellers (see below). Propellers have to be overhauled or replaced as well and this is also at times and intervals. Propellers have a lifespan of either hours or months, and are critical for flight safety. The information on mandatory maintenance like Airworthiness Directives (ADs) from the manufacturers is also very important. Some time back all Cessna light twins in the 400 series had to undergo changes to the wings that were very expensive. If it was not known and the unsuspecting buyer bought an aircraft without ensuring compliance it could lead to a nasty surprise — a whole half a million rand of it in South Africa.

The Question of damage history is another important factor. Some AMO's are able to repair an aircraft after an accident or incident and hide the details in the log book (they will declare, for instance, that a new avionic system was installed). This requires the aircraft to be re-weighed. This is almost always done after installation and also after hull repairs. Therefore it is necessary to do some homework and determine if the aircraft has a history. This is good to know and it should at least be known that the repairs were done by a reputable guy and that they were indeed properly done. Avionics radios are expensive and you want to know the aircraft has the right equipment and that it will meet your needs. The condition of the interior and exterior are also important it will give you an idea if the aircraft was hangared and if it was properly cared for or not. Remember, however, that the cost of re-painting and refurbishing the inside is relatively low, compared to an engine overhaul. If need be, you can do the paint and interior on an aircraft that does not look that good. If the engine and propeller is in a good condition you can fly the aircraft. Lastly, the price is important.

So you have received the specification sheets from the sellers, and you are going through them. You now have found four possible candidates. Phone the owners or sellers and go and look at them! Look for the following:

The classic walk around check of the fuselage, wings, tail and windows. As one would for a proper pre-flight inspection. But make it more thorough: Look for damage & hanger rash. If you can see damage, enquire about it. You want to determine the history of something you are going to spend a considerable amount of your hard earned capital on. Who is maintaining and was any damage properly repaired?

The landing gear and tires. Are the tyres and oleos properly inflated? This gives you an idea of the care the owner has afforded the aircraft.

Engine and propeller. Look at the inspection reminder in the cockpit, check the tachometer reading and, if fitted, the Hobbs. Look at the flight folio when was the aircraft last flown etc.

Next, look at the cockpit. Check avionics and instruments.

Check the interior trim and seats and equipment.

The log books will probably not be at the aircraft; they are with the AMO. Arrange to check them if you like the aircraft.

If you like the aircraft ask for a test flight.

Get a title search on the aircraft; check for a mortgage loan, so if you decide to make an offer you are sure it will be to the real owner.




This is my aircraft

Once you are happy, it is time to make an offer to purchase. The offer to purchase is usually the buyer making his intentions known to the seller. The buyer will then make an offer of a price and the price will usually include an amount of commission to be paid to the sales company. Buyers will usually also protect themselves by asking for time to arrange finance and normally the offer will be subject to the successful pre-purchase inspection at an AMO of the buyer’s choice. The buyer is usually responsible for the cost of the inspection. If the pre-purchase inspection and application for finance are successful, the transaction will be done. The change of ownership will be effected. You have to arrange insurance and then the check ride or the conversion to type with your favorite instructor can be done. You can fly your own aircraft. Loutzavia can offer you the complete service.


Should you be interested in an aircraft please contact us by phone on 082 966 0911 or e-mail us on henry@loutzavia.co.za