Expanding a Flying Club

DogoPilot

DogoPilot

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DogoPilot
Hey guys. The club I'm a part of is currently having discussions about potentially expanding the number of members, primarily based on the significant amount of interest in the club over the past two years. We are currently at capacity with 90 members (averaging ~30 members flying in any given month) across six planes, but we have ~25 people on the waiting list so we've been discussing possible next steps. I am hoping to get the collective wisdom of the community here.

A few options that have been discussed are:
1. Do nothing. We are in a good financial position and one of the only reasons we're considering adding members is due to the rapidly growing waiting list.
2. Expand our membership by 5-10 members and consider replacing one plane that is underutilized, primarily due to a relatively recent increase in minimum hours required for insurance, with something more accessible to more members. The idea being that a more accessible plane would offset the scheduling pressure of adding new members.
3. Option 2, plus consider adding another plane to the fleet at some point in the near future. Hangar space is limited but it is feasible to fit another plane in there, but it would be slightly less convenient due to the need to shuffle them around more.

There are probably more options to consider, each with unique pros/cons, so any additional perspective you all can provide is appreciated. We really seem to be having a bit of a hard time trying to determine whether there is really any justification in expanding or if it's better to just keep a well oiled machine running. Will it provide a tangible benefit to the existing members? I consider a flying club to be an asset to general aviation but when do the costs (not just monetary) start to outweigh the benefits in terms of growth?

Thanks!
 
My thoughts
1. I've seen before in certain flight clubs where they have a cap on members, I don't know how many planes you guys have or how often planes fly, but with 30 people on the wait list I'd say you could add a few and discuss how you want to handle the influx, ex. max 2 new members a month, cap of 100 members, etc.

2. A few questions, is the club primarily for flight instruction, joyriding, both? If it was already a thought to replace the least used aircraft then why not add a few members and do it, especially if nobodies going to miss it.

3. I wish there was a mathematical equation that you do that would tell you how many hours of flight time a plane would lose because you have to shuffle it out of a hanger past some other airplanes to fly it(first world problems right).
 
While I'm not sure of the specifics of your club arrangement, I can tell you about my experience. I am in a club of 90 people with about 50 active. They claim to have a waiting list of 40 people. We have 4 planes and availability isn't great. If you schedule a week ahead of time and are only flying around the patch, it's fine, but with my unpredictable schedule, it doesn't cut it. I ended up buying my own so I make the schedule.

If your club plans to buy a new plane, you may want to avoid an older cirrus. My club got one to attract more people. It worked except the cirrus is always in the shop and the 30 new people that joined for it are flying the other 3 planes.
 
I’ll throw out the option for a leaseback. Maintains your financial position and adds another plane.
 
How about help another club get started, either there or another airport?
 
Just me thinking out loud
Sounds like a very successful club I do some flight instruction for 7 planes an about 105 members. That 15 members for airplane seems to be kind of a sweet spot at least for that number of airplanes. Seems like I have heard that can also be an insurance requirement by some companies to have no more that 15 members per airplane for a club policy. They have same issue of a long waiting list. They do have plenty of hanger space due to a recent investment in a second hanger space, apparently that was a very good investment based on hanger demand and prices. But now the issue is they reduced their cash reserves to build the hanger and they are getting a good return on that investment by renting the extra hanger space out. so they have limited cash reserves to buy another airplane and buying another airplane would reduce the income they are getting from the hanger.

For the OP,
Why is the Lesser used airplane, less desirable? , Is it just not available to some members due to being higher performance or complex or high maintenance. Then it might make sense to trade it for an airplane accessible to more members to improve accessibility, but it won’t do much to help your wait list unless getting rid of that airplane will cause some members to leave. sometimes a few members are there only because of a certain airplane and would leave if that airplane was not available. If the case, maybe they would like form a partnership to buy that airplane.
If the airplane is just lessor used because it is not as well equipped or a bit more expensive, but available to all members then just upgrading it might be a better option. More expensive is ok for a better airplane, but evaluating the rates might be in order. would it still cover expenses at a lower rate if it flew more, could you make incentives to make it fly more?

Who’s one your wait list? Pilots, Potential students? Would it make sense to make a couple levels of membership.
Perhaps for a reduced price or normal price but a wait position on for a regular membership they can only schedule the plane for up to 2 days in advance. I.e. they fill in the blank spots on the schedule.

Perhaps a limited 6 month or 1 year membership for 5 or 10 pilots who are working with a flight instructor only. Ie. That guy that wants to get his instrument rating, perhaps also limited scheduling times, or regular schedule times. Like he is scheduled every Tuesday and Thursday morning for their regular training flights. No or limited penalty to leave the club, or preferential position for when a regular membership is available.

Perhaps a limited membership that can only fly the low use aircraft, leaving the higher use aircraft available to the regular members

Just ideas to better utilize the planes you have.

Getting better utilization of the planes you have may generate more income making buying another airplane more feasible

Brian
CFIIG/ASEL
 
Another option would be to find the people who haven't flown in a year or more, and ask them to get current or be gone.
 
Without knowing the buy in amount to your club it is difficult to give advice. The current fuel prices situation generally tosses cold water on GA and I would proceed with caution.

For a waiting list your club should require a deposit. It eliminates the tire kickers rather quickly.
 
Kenny Phillips said:
Another option would be to find the people who haven't flown in a year or more, and ask them to get current or be gone.
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In a lot of clubs non flying members are an asset. They pay dues each month to help the balance sheet without ever causing a single scheduling conflict.
 
Clip4 said:
In a lot of clubs non flying members are an asset. They pay dues each month to help the balance sheet without ever causing a single scheduling conflict.
Click to expand...
Yeah, I suppose there's that.
 
Our club has around 100 members, 4 planes. It's getting hard to get a plane, especially for the weekend and for the occasional 3-4 day trip. Now that gas is getting very high, I have no idea of this Covid lock down driven surge in flying will cool off / reverse.

M2C..
Charge a healthy initiation fee to join, let in 10 more people, and in a few months if the demand is still there then look into adding another plane. If your club does a lot of instruction, add a 152 and designate it as a local only training plane.
 
Clip4 said:
In a lot of clubs non flying members are an asset. They pay dues each month to help the balance sheet without ever causing a single scheduling conflict.
Click to expand...

My thought as well. I wouldn't kick out a single existing member who was inactive but paying faithfully each month. Guaranteed money for fixed costs is a godsend in most instances.
 
Since the 90-member cap is likely an arbitrary number, I'd see what the interest is for those on the wait list and weigh the impact on current aircraft scheduling. How much are the current (6) aircraft utilized, and when/how are they being utilized (weekenders, training, XCs) to see if the solution is another aircraft or finding ways to get the existing aircraft utilization up during off-peak times. Keep in mind that the low-use aircraft may be the only thing keeping some of those members on-board, so if you get rid of that aircraft without a comparable replacement (which sort of defeats the purpose of getting rid of it) you may lose those members as well.
 
How is the club managed? Are there any paid staff? Remember, the bigger it gets, the more work it is to manage the whole thing. At some point, you're going to exceed the willingness or capability of existing management to keep up. In my opinion, a small, really well-managed club is better than a "big" club. Growing just for the sake of clearing out the waiting list doesn't strike me as a good reason. You owe nothing to the folks on the waitlist, so growing just to accommodate them, potentially at a cost to the existing membership (in lesser availability, worse management, etc.) is hard to justify.
 
Kudos to your club management. I usually see the reverse response -- "great now we can get a bigger/more capable/twin plane" which ends up being a financial sink for the club and only benefits a small % of the membership.

The leaseback is an interesting idea. Maybe with a purchase option for the club.

That waitlist is going to evaporate if we get into all of the economic doom and gloom my facebook nostradomii are moaning about. I'd expand with the idea that you may contract just as quickly. See if it onboarding a bunch of noobs can be done profitably to the club. Maybe an initiation fee can be implemented to weed out the serious from the fomo.

Good problem to have though. :)
 
SoonerAviator said:
My thought as well. I wouldn't kick out a single existing member who was inactive but paying faithfully each month. Guaranteed money for fixed costs is a godsend in most instances.
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I was trying to figure how to address inactive or low usage members.
I agree they tend to be an asset in that they help pay the fixed costs with very little positive or negative impact to the clubs resources. They are often kind like aircraft owners that can't bring themselves to give up on and sell it when they don't use it enough. They just like know they could go fly if they wanted to. Some like the social aspect of some clubs and can be a great asset to contributing to club functions even if they don't fly much.

One problem with Inactive members is they can tend to be a safety risk to the club as the may just barely stay current. One of the things the club I am involved with does to help combat this is they charge members a minimum of 1 hour of flight time for the cheapest airplane whether fly or not, It can be credited to a more expensive airplane, and can be deferred in winter months when flying every month can be challenging.

From a Safety and utilization standpoint the club might consider adding some additional requirements for example maybe requiring a flight with an instructor if a pilot has not flown with previous 6 month, or if pilot flies less then 12 hours in the previous year require a wings flight, for flight review, or just check flight with an instructor.

Brian
CFIIG/ASEL
 
brcase said:
I was trying to figure how to address inactive or low usage members.
I agree they tend to be an asset in that they help pay the fixed costs with very little positive or negative impact to the clubs resources. They are often kind like aircraft owners that can't bring themselves to give up on and sell it when they don't use it enough. They just like know they could go fly if they wanted to. Some like the social aspect of some clubs and can be a great asset to contributing to club functions even if they don't fly much.

One problem with Inactive members is they can tend to be a safety risk to the club as the may just barely stay current. One of the things the club I am involved with does to help combat this is they charge members a minimum of 1 hour of flight time for the cheapest airplane whether fly or not, It can be credited to a more expensive airplane, and can be deferred in winter months when flying every month can be challenging.

From a Safety and utilization standpoint the club might consider adding some additional requirements for example maybe requiring a flight with an instructor if a pilot has not flown with previous 6 month, or if pilot flies less then 12 hours in the previous year require a wings flight, for flight review, or just check flight with an instructor.

Brian
CFIIG/ASEL
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Yeah, I don't think I'd be happy getting charged for flight time I didn't use, but having a minimum amount of flight time in a set period (say 90 days) before triggering a flight review with a designated club member or CFI is certainly reasonable.
 
allthesetouch&goesbutno said:
My thoughts
1. I've seen before in certain flight clubs where they have a cap on members, I don't know how many planes you guys have or how often planes fly, but with 30 people on the wait list I'd say you could add a few and discuss how you want to handle the influx, ex. max 2 new members a month, cap of 100 members, etc.

2. A few questions, is the club primarily for flight instruction, joyriding, both? If it was already a thought to replace the least used aircraft then why not add a few members and do it, especially if nobodies going to miss it.

3. I wish there was a mathematical equation that you do that would tell you how many hours of flight time a plane would lose because you have to shuffle it out of a hanger past some other airplanes to fly it(first world problems right).
Click to expand...

Yes, we have been discussing how we would proceed if we were to expand the membership. It would likely be spread out over the course of several months. Maybe 2 members per month, or 5 one month and 5 a few months later. The club is quite diverse. We've had people come in, train like crazy, and move on to a job in aviation. We have people who just like to fly and some who seem to just like airplanes and the camaraderie, since they never really fly but continue to pay their monthly dues.

kujo806 said:
While I'm not sure of the specifics of your club arrangement, I can tell you about my experience. I am in a club of 90 people with about 50 active. They claim to have a waiting list of 40 people. We have 4 planes and availability isn't great. If you schedule a week ahead of time and are only flying around the patch, it's fine, but with my unpredictable schedule, it doesn't cut it. I ended up buying my own so I make the schedule.

If your club plans to buy a new plane, you may want to avoid an older cirrus. My club got one to attract more people. It worked except the cirrus is always in the shop and the 30 new people that joined for it are flying the other 3 planes.
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We are a Piper club, and while we've had other planes throughout our history as a club, keeping all of the airframes similar over the last several years seems to be a good model. It's relatively easy to transition between a Warrior, Archer, Dakota, Arrow, and Saratoga.

bflynn said:
I’ll throw out the option for a leaseback. Maintains your financial position and adds another plane.
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This hasn't been discussed, but it may be a good option. We capitalized on an opportunity a few years ago to purchase an plane, and as part of that agreement we expanded our membership by one person by taking in seller as a new member. Interestingly, it sounds like we have a similar opportunity now.

mcdewey said:
How about help another club get started, either there or another airport?
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This was actually thrown out there in our discussion. Definitely something for us to think about. This option would probably involve the most work for us unless we just round up all the people on the waiting list and connect them to each other.

brcase said:
For the OP,
Why is the Lesser used airplane, less desirable? , Is it just not available to some members due to being higher performance or complex or high maintenance. Then it might make sense to trade it for an airplane accessible to more members to improve accessibility, but it won’t do much to help your wait list unless getting rid of that airplane will cause some members to leave. sometimes a few members are there only because of a certain airplane and would leave if that airplane was not available. If the case, maybe they would like form a partnership to buy that airplane.
If the airplane is just lessor used because it is not as well equipped or a bit more expensive, but available to all members then just upgrading it might be a better option. More expensive is ok for a better airplane, but evaluating the rates might be in order. would it still cover expenses at a lower rate if it flew more, could you make incentives to make it fly more?

Who’s one your wait list? Pilots, Potential students? Would it make sense to make a couple levels of membership.
Perhaps for a reduced price or normal price but a wait position on for a regular membership they can only schedule the plane for up to 2 days in advance. I.e. they fill in the blank spots on the schedule.

Perhaps a limited 6 month or 1 year membership for 5 or 10 pilots who are working with a flight instructor only. Ie. That guy that wants to get his instrument rating, perhaps also limited scheduling times, or regular schedule times. Like he is scheduled every Tuesday and Thursday morning for their regular training flights. No or limited penalty to leave the club, or preferential position for when a regular membership is available.

Perhaps a limited membership that can only fly the low use aircraft, leaving the higher use aircraft available to the regular members

Just ideas to better utilize the planes you have.

Getting better utilization of the planes you have may generate more income making buying another airplane more feasible

Brian
CFIIG/ASEL
Click to expand...

The lesser used airplane is an Arrow III for a few reasons. One is that our insurance upped the minimum requirements to fly it a few years ago from (I think) 25 hours in complex + checkout in plane to now 250 hours PIC + 25 hours make/model + checkout, which puts it out of reach for a decent percentage of our flying members. Also, it has been a bit of a maintenance nightmare relative the rest of the fleet over the course of the last 5 years. We did discuss incentives to get it to fly more for the members who can fly it, but honestly, the plane has just been one frustration after another.

Regarding the people on the waiting list, it is really similar to our current membership. Everywhere from students to ATP and interestingly the percentage of each is really close to our current membership. As far as different membership levels, that's something that could be discussed, but I think would add complexity to our manager/bookkeeping roles.

Clip4 said:
Without knowing the buy in amount to your club it is difficult to give advice. The current fuel prices situation generally tosses cold water on GA and I would proceed with caution.

For a waiting list your club should require a deposit. It eliminates the tire kickers rather quickly.
Click to expand...

We used to require a deposit, but it sounds like doing so has proven to be more of a hassle than it's worth and haven't really experience many tire kickers over the last few years, so the manager has stopped taking deposits.

Clip4 said:
In a lot of clubs non flying members are an asset. They pay dues each month to help the balance sheet without ever causing a single scheduling conflict.

Kenny Phillips said:
Yeah, I suppose there's that.
Click to expand...
Click to expand...

Yes, we definitely appreciate our non-flying members who continue to pay their dues.

WDD said:
Our club has around 100 members, 4 planes. It's getting hard to get a plane, especially for the weekend and for the occasional 3-4 day trip. Now that gas is getting very high, I have no idea of this Covid lock down driven surge in flying will cool off / reverse.

M2C..
Charge a healthy initiation fee to join, let in 10 more people, and in a few months if the demand is still there then look into adding another plane. If your club does a lot of instruction, add a 152 and designate it as a local only training plane.
Click to expand...

Thanks, that's pretty similar to our plan, except we'd probably be looking at a Dakota vs. 152, as we currently have a Warrior and 2 Archers that work well as trainers.

SoonerAviator said:
My thought as well. I wouldn't kick out a single existing member who was inactive but paying faithfully each month. Guaranteed money for fixed costs is a godsend in most instances.
Click to expand...

Yes, our thoughts exactly!

SoonerAviator said:
Since the 90-member cap is likely an arbitrary number, I'd see what the interest is for those on the wait list and weigh the impact on current aircraft scheduling. How much are the current (6) aircraft utilized, and when/how are they being utilized (weekenders, training, XCs) to see if the solution is another aircraft or finding ways to get the existing aircraft utilization up during off-peak times. Keep in mind that the low-use aircraft may be the only thing keeping some of those members on-board, so if you get rid of that aircraft without a comparable replacement (which sort of defeats the purpose of getting rid of it) you may lose those members as well.
Click to expand...

We are considering sending out a survey to the prospective members. Currently, utilization across all aircraft is at a record high for the club, except for the Arrow III due to the reasons described above. Our Saratoga is also on the lower end as far as usage, relatively speaking, but it does have a group of members that fly it regularly and it gets quite a bit of x-country usage. It has also been pretty stable from a maintenance perspective. The type of flying is all over the place. Weekend warriors, training for Private/IFR/Commercial, x-country, etc.

Regarding the plan for replacement, we would be looking at a Dakota to replace the Arrow, and based on usage, it seems like all members that currently can and do fly the Arrow once in a while seem to fly the Dakota even more, so the risk of losing members is likely quite low.

Thanks for all the responses so far, I'm taking notes for our next meeting.
 
brcase said:
I was trying to figure how to address inactive or low usage members.
I agree they tend to be an asset in that they help pay the fixed costs with very little positive or negative impact to the clubs resources. They are often kind like aircraft owners that can't bring themselves to give up on and sell it when they don't use it enough. They just like know they could go fly if they wanted to. Some like the social aspect of some clubs and can be a great asset to contributing to club functions even if they don't fly much.

One problem with Inactive members is they can tend to be a safety risk to the club as the may just barely stay current. One of the things the club I am involved with does to help combat this is they charge members a minimum of 1 hour of flight time for the cheapest airplane whether fly or not, It can be credited to a more expensive airplane, and can be deferred in winter months when flying every month can be challenging.

From a Safety and utilization standpoint the club might consider adding some additional requirements for example maybe requiring a flight with an instructor if a pilot has not flown with previous 6 month, or if pilot flies less then 12 hours in the previous year require a wings flight, for flight review, or just check flight with an instructor.

Brian
CFIIG/ASEL
Click to expand...

The only real problem with inactive members comes in terms of voting on club issues (to the extent votes are required under the bylaws). Inactive members have zero incentive to vote to upgrade aircraft or otherwise incur costs/expenses that might result in higher dues, etc. It creates a situation where forward progress for members who are actually using the planes get hampered by those who don't actually fly. It's a delicate balance between keeping those paying members, but not letting it turn into a situation where you can't get anything done.
 
bradg33 said:
The only real problem with inactive members comes in terms of voting on club issues (to the extent votes are required under the bylaws). Inactive members have zero incentive to vote to upgrade aircraft or otherwise incur costs/expenses that might result in higher dues, etc. It creates a situation where forward progress for members who are actually using the planes get hampered by those who don't actually fly. It's a delicate balance between keeping those paying members, but not letting it turn into a situation where you can't get anything done.
Click to expand...
Fortunately, we have not had any issues upgrading our planes when we are in the financial position to do so, as these decisions are made by the board of directors on behalf of the general membership.
 
Some really great experience with clubs here. I formally belonged to a club with 5 planes and 90 members (of which 50 could be considered active) and no longer do for a couple of reasons.

1) Scheduling. Had to plan on 3 weeks out for even a half day on a weekend - While we all accept that being part of a club is less convenient than owning our own planes, having to plan out that far means sticking a reservation on there even if you have no idea if you can make it or not which only makes the reservation problem worse. Weekdays were more open but most of us work.

2) Culture. That club was long-running and had members who had been their 30+ years. As an FNG, even though I served a tour on the board, the old members held themselves above all the other members. Want to take a plane to Oshkosh? No chance, perpetually reserved for members who always have gone (and all 5 planes went). Have an idea about better ways to run the club? Pass, we tried that 20 years ago. There was in fact, a small group of people who run/ran the club even when they were not on the board and several ideas I brought forth were shot down by the underground mgt team. I saw the (mostly retired) long-time members manage to get procedures and policies in place that actually prevented younger working members from flying due to the massive amount of time it took to get through the various qualifications. The final straw was "we lost track of everyone's quals during Covid so everyone has to do a flight review in the next three months". Yea, 50-90 people in three months. Well, it sure made sure the planes were not going to get used for anything else and made the 6 CFI's a nice piece of change. After three years I'd had enough.

To actually try to add value to your original questions in the thread instead of just complaining about my own poor decisions.

1. Do nothing. We are in a good financial position and one of the only reasons we're considering adding members is due to the rapidly growing waiting list.
Nothing wrong with doing nothing. If the members are happy with the availability don't worry about the wait list.

2. Expand our membership by 5-10 members and consider replacing one plane that is underutilized, primarily due to a relatively recent increase in minimum hours required for insurance, with something more accessible to more members. The idea being that a more accessible plane would offset the scheduling pressure of adding new members.
Worth considering but I would have a serious discussion with the club members before you sell a plane and what would replace it. Perhaps with the knowledge it's underused people might flex to it. I'd sure not not sell an airplane without the replacement on the line,

3. Option 2, plus consider adding another plane to the fleet at some point in the near future. Hangar space is limited but it is feasible to fit another plane in there, but it would be slightly less convenient due to the need to shuffle them around more.
IMO, the only benefit of a big club is that aircraft availability - Seriously consider this option combined with new members. Take a survey as to what members was that new plane to be and, as someone else mentioned, consider trying to a single type or at least mfg.
 
DogoPilot said:
we'd probably be looking at a Dakota vs. 152, as we currently have a Warrior and 2 Archers that work well as trainers.
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I think replacing the Arrow with a Dakota would be a pretty solid plan. Other than finding a reasonably priced Dakota will probably be challenging.
Polling the club to see what they would fly more you might find that an another Archer would make sense for more local flying, training and checkout/currency. The Dakota would be nicer for the longer flights.

The club I work with sticks with Cessna's, 152, 3-172, 3-182. I used to wish they had a complex airplane for commercial and CFI training, but with changes in the rules to use TAA aircraft instead that isn't as much of an issue as it used to be, but might mean it would be nice to have one of your aircraft meet the TAA requirements. But that is something your existing aircraft could be upgraded to over time. Insurance and maintenance for non-complex aircraft is likely a financial advantage as well.

Brian
CFIIG/ASEL
 
Build the business case, run the numbers. What kind of impact does adding or changing assets at top of market do to your financial position?

Waitlists aren’t a bad thing. If your waitlist isn’t being actively managed, how viable is it as an indicator of *real* interest. Consider an option to purchase your spot on the list to maintain your spot. Call it a $20 investment applied to your account as a credit so you can see how viable the prospects really are.

Same with the undesirable plane. What’s the business case to keep it vs swap it out.
 
TCABM said:
Build the business case, run the numbers. What kind of impact does adding or changing assets at top of market do to your financial position?

Waitlists aren’t a bad thing. If your waitlist isn’t being actively managed, how viable is it as an indicator of *real* interest. Consider an option to purchase your spot on the list to maintain your spot. Call it a $20 investment applied to your account as a credit so you can see how viable the prospects really are.

Same with the undesirable plane. What’s the business case to keep it vs swap it out.
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I think a potential issue with it (Piper Arrow III) is that it doesn't serve much purpose in the lineup outside of Commercial Cert/Complex training, especially with the 250TT/25 in-type insurance mins OP mentioned. If you already have an Archer and a Dakota, the Arrow III just doesn't add much to the party in terms of meaningful speed or load. The Dakota pretty much matches everything the Arrow III does, and the Archer mainly loses out on 10kts of cruise speed which isn't enough to worry about given the average XC/burger run.
 
brcase said:
Polling the club to see what they would fly more you might find that an another Archer would make sense for more local flying, training and checkout/currency. The Dakota would be nicer for the longer flights.
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From experience - poll the club to see what they will pay. Lots of people will say they're going to fly a particular airplane, but when the credit card comes out, it's a different story. Multiple times we have added the "next level" plane that didn't get flown because the cost was higher (Cherokee 6 and M20K Rocket that I know of).
 
SoonerAviator said:
I think a potential issue with it (Piper Arrow III) is that it doesn't serve much purpose in the lineup outside of Commercial Cert/Complex training, especially with the 250TT/25 in-type insurance mins OP mentioned. If you already have an Archer and a Dakota, the Arrow III just doesn't add much to the party in terms of meaningful speed or load. The Dakota pretty much matches everything the Arrow III does, and the Archer mainly loses out on 10kts of cruise speed which isn't enough to worry about given the average XC/burger run.
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Where I was going with it is along the lines of whether the undesirable plane turning a profit or not. If it subsidizes the other two, getting rid of it has to balance out in the financials. If the other two subsidize it, then what do you do about their rates if you swap/get rid of it.

If the business case says drop it like a hot potato, then what’s the business case to replace vs treat the funds as retained earnings until you can figure out where to best use those funds…upgrade the others, get a leaseback, find the right plane to replace it with, etc.

Essentially treat each part of the question as a business case to help guide towards answers.

We’re a partnership and not a club, but we just had this same discussion; do we expand the partnership and why should we? What gap would we fill.

Looking back our waitlist was “full”, but when it came time for a partner to sell their share, zero wait listers have ever turned into partners, so we have just stopped the practice altogether.
 
bradg33 said:
The only real problem with inactive members comes in terms of voting on club issues (to the extent votes are required under the bylaws). Inactive members have zero incentive to vote to upgrade aircraft or otherwise incur costs/expenses that might result in higher dues, etc. It creates a situation where forward progress for members who are actually using the planes get hampered by those who don't actually fly. It's a delicate balance between keeping those paying members, but not letting it turn into a situation where you can't get anything done.
Click to expand...

This is why the board needs to run the corporation and not the stock holders.
 
brcase said:
I…One problem with Inactive members is they can tend to be a safety risk to the club as the may just barely stay current. …
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Our annual ‘dues’ comes with a credit for 20hrs’ flight time. If a partner doesn’t use all their allotment, they must complete and evidence flight review prior to operating the aircraft.

It’s a gentleman’s agreement, but our only inactive partners both have had some chronic health problems. We’ve discussed with them whether they want to sell or not and when they’re ready, we want to help them safely get back in the saddle.
 
Clip4 said:
This is why the board needs to run the corporation and not the stock holders.
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I generally agree, but not all clubs are structured "correctly." Some bylaws require member approval for certain types of transactions, etc. Or you end up with Board members that are too influenced by the "old guard" that doesn't fly.
 
If you decide to expand membership then what is in it for the current members? They likely paid a fee to join and monthly dues. Adding more people is going to make it so more people are flying the planes and they become less available. I would be mad if I bought into a club with a set number of members only to have the number of people increase by a significant amount. I would be expecting either a partial refund of the buy in cost or a reduction in monthly fees as the value of my buy in just got reduced by all the new people.
 
kmacht said:
If you decide to expand membership then what is in it for the current members?
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Potentially......

1) More money for the club to offset future price increases to current club members, as the fixed costs of the aircraft will be spread among more members.
2) The ability to finance a new aircraft to allow more opportunities for club rental.
3) New people will help prevent the club from becoming a group of grumpy old guys complaining about LORAN, ADF and VOR going away.
 
My concern would be how many of these people will still be interested when 100LL hits 10-12 dollars a gallon?
 
WDD said:
Potentially......

1) More money for the club to offset future price increases to current club members, as the fixed costs of the aircraft will be spread among more members.
2) The ability to finance a new aircraft to allow more opportunities for club rental.
3) New people will help prevent the club from becoming a group of grumpy old guys complaining about LORAN, ADF and VOR going away.
Click to expand...

Potentially, yes. I’ll counter with:

1. If you can accurately predict p&l performance, I’m ready to hire you. Will need proven record of success.

2. We all know capex isn’t the barrier, it’s opex. We also know debt kills.

3. Sounds more like an EAA pancake breakfast.
 
bradg33 said:
I generally agree, but not all clubs are structured "correctly." Some bylaws require member approval for certain types of transactions, etc. Or you end up with Board members that are too influenced by the "old guard" that doesn't fly.
Click to expand...

The Board serves at the pleasure of the members. If you have “old guard” who isn’t flying that is a membership issue.
 
WDD said:
Potentially......

1) More money for the club to offset future price increases to current club members, as the fixed costs of the aircraft will be spread among more members.
2) The ability to finance a new aircraft to allow more opportunities for club rental.
3) New people will help prevent the club from becoming a group of grumpy old guys complaining about LORAN, ADF and VOR going away.
Click to expand...

1) if the club is operating as it should then the fixed prices should have already been covered by the existing number of members with a healthy account in reserve to cover future expenses. If it isn’t then you are saying people bought into a club that wasn’t financially sound to begin with.

2)Do the other club members actually want a new or different aircraft? That should be a separate vote before any discussion of how to pay for it is had. I left a club because the board decided a 6 seat aircraft was needed and they would add another 30% for monthly dues to pay for it. The vast majority of members were perfectly happy flying what was available and enough left after the purchase and price increase that the club went bankrupt and closed. Even if 51% of people vote for a new aircraft or more members there is still the risk of the other 49% leaving. Is your membership waiting list strong enough to survive a large group of current members leaving?

3). You won’t ever get away from the old grumpy members. The younger crowd either has enough
money to not need a club or is working and dealing with family things that they don’t have time to fly. There is a reason that the airplane world is filled with older people. They are the ones with the time and money to fly.
 
kmacht said:
1) if the club is operating as it should then the fixed prices should have already been covered by the existing number of members with a healthy account in reserve to cover future expenses. If it isn’t then you are saying people bought into a club that wasn’t financially sound to begin with.

2)Do the other club members actually want a new or different aircraft? That should be a separate vote before any discussion of how to pay for it is had. I left a club because the board decided a 6 seat aircraft was needed and they would add another 30% for monthly dues to pay for it. The vast majority of members were perfectly happy flying what was available and enough left after the purchase and price increase that the club went bankrupt and closed. Even if 51% of people vote for a new aircraft or more members there is still the risk of the other 49% leaving. Is your membership waiting list strong enough to survive a large group of current members leaving?

3). You won’t ever get away from the old grumpy members. The younger crowd either has enough
money to not need a club or is working and dealing with family things that they don’t have time to fly. There is a reason that the airplane world is filled with older people. They are the ones with the time and money to fly.
Click to expand...

Works well when things are flat. When you have rapid inflation (like right now) and utilities, hangar rent, insurance, etc. goes up affecting those "fixed costs". The previous dues may not be enough to cover the balances going forward. You can choose to up the monthly dues or add more members.
 
I really appreciate all the feedback. I'll be bringing a summary of the discussion to the next board meeting.
 
I am the president of a 70 year old flight club. We have a 4-5 year waiting list. Our club consists of 50 active members and around 50 inactive members. 4 aircraft. We went through this debate a few years ago. The proposal was to add another plane and increase the membership size accordingly. The long of the short of it is this.... it would not benefit the current members but it would benefit those on the waitlist so we decided against it. People on the waitlist can't vote. Sucks for them good for us. Be smart do nothing.
 
I’m in a club. We have a constant 15 members per plane. Five planes. It works for us. All planes are simple to keep insurance down. We have around 40 on the waiting list which is out a year or more. Scheduling is a non-factor and there are plenty of slots open for those wanting to fly. Several are declared inactive but they are replaced with new pilots and if they want to come back they go to the head of the list. Others remain “active” and continue to pay dues but don’t fly.
 
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