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.
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
Operations minimum qualifications etc.
Maintenance; who, where, what, how breakages?
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.