Fractional piston ownership - what say you?

[Nathan Young]

I am a long time subscriber to Flying Mag. I have read Robert Goyer's
articles on shared/fractional piston ownership, and decided to take a
look at the numbers.

His most recent article in the Dec2006 Flying states:

SR22-G2 (1/8th share) = $71,900 (Note that $71,900 * 8 = $575k)
$760 monthly management fee
$90 hourly operating cost.

This 'buys' the owner access to 75 hours per year of flying time, with
21 overnights.

Adding up the annual costs for these 75 hrs.
$4,314 (6 percent simple interest on $71,900)
$9,120 ($760/month * 12 months)
$6,750 (hourly cost * 75hrs)
--------------
$20,184 or $269 per flight hour

One piece that is missing is the depreciation of the aircraft. One
can expect the SR22 to be worth a lot less in a few years with the 8
users putting an approximate 500hrs/year on the plane.

So is this a good deal?

To me, it seems like a quite large amount to spend per hour for a
single, even if it is a 'technologically advanced aircraft'.

One of the Chicago area flying clubs is asking $218/hr, and they have
two SR22s online, as well as ~20 other planes.

-Nathan

[xyzzy]

Nathan Young wrote:
> $20,184 or $269 per flight hour
>
> So is this a good deal?

Doesn't look like one to me, but...

> To me, it seems like a quite large amount to spend per hour for a
> single, even if it is a 'technologically advanced aircraft'.
>
> One of the Chicago area flying clubs is asking $218/hr, and they have
> two SR22s online, as well as ~20 other planes.

What people are paying for with those fractional ownership dealies IMO
is the ability to fly a new airplane and have someone else worry about
everything, from washing to gassing to maintanence. Also no
maintanence surprises, if you have a problem you just tell the
fractional company when you drop it off, and you have good availability
because the fractional company usually as a few of them at your site.

I know a guy who sold his Mooney to go into one of these deals with an
SR-22. Last I heard he loves it. He could never have got an SR-22 on
his own with what he got out of his Mooney, and he was tired of dealing
with all the hassles of ownership. They do everything, including
pulling the plane out of the hangar and having it waiting on the ramp
for him.

I think that from the standpoint of having owned an expsnsive plane
and taken the hits that inevitably gives you, this looks like a better
deal, with much more predictable costs. Compared with renting it's
very expensive, but so is owning. But I would expect these fractional
owners to have a lot more availability and flexibility than a renter
does, on the plus side for this deal.

One big red flag for me is that Mr. Goyer has been writing about this
for several years. Several years ago he wrote about being in a
fractional ownership where the other owners outvoted him and moved the
plane to an airport an hour and a half from his house. Prospective
fractional owners definitely need to look into how protected they are
from things like that happening.

[Allen[_1_]]

"Nathan Young" > wrote in message
...
>I am a long time subscriber to Flying Mag. I have read Robert Goyer's
> articles on shared/fractional piston ownership, and decided to take a
> look at the numbers.
>
> His most recent article in the Dec2006 Flying states:
>
> SR22-G2 (1/8th share) = $71,900 (Note that $71,900 * 8 = $575k)
> $760 monthly management fee
> $90 hourly operating cost.
>
> This 'buys' the owner access to 75 hours per year of flying time, with
> 21 overnights.

What happens to the other 197 nights per year? What is the rate if you go
over the 75 hours per year? Is the insurance premium part of the management
fee or is it additional? I once had someone offer me $6,000.00/mo. to dry
lease my Beech Travelair for a year. This was to include 20 flight hours,
additional hours were to be at $350.00/hr and they carried their own
insurance. Alas, another renter dinged the airplane just before we signed
and the deal fell through.

Allen