FBO Policy?

[Lawreston]

I have a friend who bought a plane and a hangar to put it in. It's a new location for him. When he inquired about instruction at the new locale he was quoted the going rate for the FBO's CFI. When he told the FBO that he has his own plane he was told that the CFI's hourly rate would be higher to instruct in a student's own aircraft. "It's universal policy amongst all FBO operations. Each one has its own aircraft which must be supported."

Comments? Is that "universal" information factual?

HR

 

[flyersfan31]

In my experience, the instructor rate is independent of the plane.

 

[NotSure]

Its a load of c--p.

However there is a rule that all people receiving instruction in their own plane must send me a check for $20 per month. Its universal policy within the flight training world. I'll PM you my address.

 

[Lawreston]

"It's a load of c--p." That was my thought, too; but it was not my place in which to stick my nose.

 

[BillTIZ]

I have seen many FBO Flight Schols in my travels across the country.
I would say that it is the norm for flight schools to charge more to use their CFIs in your airplane. If the CFI is an independent, he can charge what he wants.

If the CFI is employed by the flight school, and you take him in your airplane, he is not there to instruct in the flight schools airplane or to monitor solo students.

 

[RyanShort1]

If the school is business savvy, then yes, the price is likely to be a little bit higher. There was a $10 difference at the school where I started out, but that could be significantly lowered if you hired the instructor at the "day" rate.

Ryan

 

[weilke]

He would probably be better off hiring an independent who doesn't carry the overhad of an FBO/flight-school.

 

[denverpilot]

I was thinking... I know CFIs who go out of their way to teach in the (often better maintained and nicer) privately owned aircraft. If nothing else for the variety of not flying a Skyhawk every day.

Kinda makes sense though... Walk up to McDonalds and ask them to send a staff member to pick up some Chick-Fil-A sandwiches, and they're gonna say it costs more. a lot more.

Think your friend is going to have to ask around a bit about finding a CFI unless the place/town is so small that there's only one.

 

[NotSure]

"It's a load of c--p." That was my thought, too; but it was not my place in which to stick my nose.

My advice is, politely complain that it seems unfair and see if they will drop the "surcharge". You would be surprised how much of this stuff is negotiable, and they will want to keep you as a customer. Failing that, find yourself an independant CFI. Like the CFI working at the FBO and only getting half the money...

 

[Bob Noel]

I've seen it both ways. It can be more clear (clearer?) if the FBO aircraft rates were listed as solo and dual, and then a seperate rate for the CFI.

I have no problem paying the "higher" rate for the CFI when using my own aircraft.

 

[JesseD]

The three I looked at mentioned nothing about it to me.

 

[RyanShort1]

I do list on my website that I charge more for private aircraft, but that's for several reasons and mainly to give me wiggle room. If I have to drive extra, it costs time that I could've been at the other airport with possibly a longer billing time. Also, I carry non-owned CFI insurance for such occasions, since the FBO policy is NOT going to help in that situation and while it's a minor offset, it does help with a really expensive bit of insurance. So far all of the guys I've flown with in their own aircraft have not squawked one bit at the price. I don't gouge, but am willing to make it convenient for them. BTW, the non-owned aircraft insurance coverage price for $75K hull value plus CFI coverage was more than I earned in non-owned aircraft all of last year, so it's mainly more for opportunities, than it is strictly good for straight up business in my case so far.
At the first place that I mentioned the reasoning was that the CFI's were there to keep the school planes flying, and if they were flying in something else, there was still the necessity to keep the school planes paid for. So the extra $10/hr was to throw a little bit at the insurance and overhead that the school had. The rate there was $55/hr in non-owned aircraft. It's typically around $45/hr down at Stinson in school aircraft, and we charge $40/hr where I'm currently at in the FBO planes. $50/hr for owner's aircraft makes it really easy to do the math when we're through :wink2:.

Ryan

 

[poadeleted20]

I would say that it is the norm for flight schools to charge more to use their CFIs in your airplane. If the CFI is an independent, he can charge what he wants.

Concur with Bill. Flight schools take additional financial risks when they put their instructors in customers' planes, and the insurers charge more for that. The only way to recoup that extra cost is to charge extra for instruction in airplanes not controlled by the school.

The local FBO here completely stopped offering instruction in planes other than their own because due to the low number of billable hours they were getting for that, they couldn't charge enough extra to cover the extra insurance cost. OTOH, that policy has helped my business, so I think it's a great policy.

 

[schmookeeg]

I have a friend who bought a plane and a hangar to put it in. It's a new location for him. When he inquired about instruction at the new locale he was quoted the going rate for the FBO's CFI. When he told the FBO that he has his own plane he was told that the CFI's hourly rate would be higher to instruct in a student's own aircraft. "It's universal policy amongst all FBO operations. Each one has its own aircraft which must be supported."

Comments? Is that "universal" information factual?

HR

We don't do that.

Many of our competitors do.

While our $100,000 non-owned CFI E&O coverage is not "free" per se, it is included in our $80,000/yr FBO policy at no charge.

I'd ask them to refer you to a local freelance CFI. If they won't meet your needs fairly, and won't refer you to someone who will, they're schmucks and don't deserve your business to begin with.

 

[poadeleted20]

I'd ask them to refer you to a local freelance CFI. If they won't meet your needs fairly, and won't refer you to someone who will, they're schmucks and don't deserve your business to begin with.

I would point out that the local FBO has referred to me customers whose needs they cannot, for insurance reasons, meet. And you bet I do appreciate that!

 

[AdamZ]

"It's a load of c--p." That was my thought, too; but it was not my place in which to stick my nose.

Not a load of C--p!

I have seen many FBO Flight Schols in my travels across the country.
I would say that it is the norm for flight schools to charge more to use their CFIs in your airplane. If the CFI is an independent, he can charge what he wants.

If the CFI is employed by the flight school, and you take him in your airplane, he is not there to instruct in the flight schools airplane or to monitor solo students.

Bills got it right. Figure a flight school charges $40 to $50 per hour for instruction. The CFI gets perhaps 1/2 of that so the flight school get $20-$25 for the hour and they then can rent one less plane for them to rent for instruction that they could also make some money off of. Sometimes an FBO will charge the lower rate for a good FBO customer to get instruction ya know if you rent a tie down from them and buy your fuel there, get your annual there.

Its funny we pilots hate paying over night fees and extra for things like this but we bemoan the closing of airports and Aviation businesses. I do agree that an independant may be the way to go for you though.

 

[TMetzinger]

I've seen it both ways, and it really does depend on what the insturance and other costs are for the school. In my experience the more "successful" schools that have a large cadre of full and part time CFIs charge a single rate for the CFI and one for the airplane. They typically have their rental aircraft flying consistently and aren't "harmed" by a CFI flying in a private airplane. They seem to set their CFI and airplane rates so that each is profitable on its own. This makes the "normal" rate a little higher, but it seems to me that the airplanes do better under this policy - they get squawks fixed right away, they're kept in good shape, all of which leads to higher utiization which leads to more revenue which leads to plenty of money for maintenance which leads to....

I sometimes think that businesses shoot themselves in the foot trying to keep costs low. I don't think aviation is a market that rewards low costs when there is a perceived loss of value (ratty planes, squawks not getting fixed, etc) along with it.

 

[wsuffa]

He would probably be better off hiring an independent who doesn't carry the overhad of an FBO/flight-school.

+1.

Flight schools charge more for a variety of reasons, but the primary one is insurance.

At one, they even tried to require you to use their CFIs if you so much as leased hangar space from them. At a higher rate, of course. Even got the airport to enact rules "banning" independent CFIs from the airport. Easy enough to get around, though, with other airports nearby.

 

[weilke]

+1.

Flight schools charge more for a variety of reasons, but the primary one is insurance.

About that

If you hire an independent, the insurance issue doesn't go away. Does the CFI fulfill the open pilot clause?, does the CFI have enough hours in type to provide instruction (as per your ins co)?, do you have to put him on as a 'named pilot'?, do you put him on your policy as 'additional insured'?, does the CFI carry non-owned coverage that includes instruction......

All these things may or may not have a cost to them. The issues are btw. the same with an FBO provided instructor.

At one, they even tried to require you to use their CFIs if you so much as leased hangar space from them. At a higher rate, of course. Even got the airport to enact rules "banning" independent CFIs from the airport. Easy enough to get around, though, with other airports nearby.

The easiest way around the banning of independent instructors is the status of the aircraft owner as 'individual user' under FAA funding rules. They can 'ban' the CFI all they want, they can't prohibit the individual user from using his services.

 

[LearDriver]

Why not check out a few instructors and settle on the one that you feel that you would do the best with. If it happens to be one from the FBO and they want to add a surcharge, then pay it.

When I was a full time instructor, the aero club that I flew for would charge $15 extra an hour to have one of the cfi's instruct in a non club aircraft. For outside work the instructors would just instruct independently. Our only restriction was that we couldn't do the outside instruction at our based airport. In our case that wasn't a big issue because there were two other airports within 10 miles of our airport.

 

[poadeleted20]

If you hire an independent, the insurance issue doesn't go away. Does the CFI fulfill the open pilot clause?, does the CFI have enough hours in type to provide instruction (as per your ins co)?, do you have to put him on as a 'named pilot'?, do you put him on your policy as 'additional insured'?, does the CFI carry non-owned coverage that includes instruction......

While that's all good advise for the owner, it has nothing to do with the insurance problems of the FBO.

All these things may or may not have a cost to them.

I guarantee you that there is a cost to the instruction provider for carrying that non-owned/instructional coverage policy. Whether the provider factors that into the rate charged is another story dependent primarily on the provider's business sense, but it's a factor in my rate.

The easiest way around the banning of independent instructors is the status of the aircraft owner as 'individual user' under FAA funding rules. They can 'ban' the CFI all they want, they can't prohibit the individual user from using his services.

Exactly.

 

[weilke]

While that's all good advise for the owner, it has nothing to do with the insurance problems of the FBO.

Well, it was an owner who asked about the surcharge. I just wished to point out that using an independent may have its own cost associated with it. A $10/hr surcharge (or whatever it may be) could be a bargain compared with having to make changes to ones insurance coverage (buy a rider, change to a provider that has CFI requirements that work with the particular independent etc.).

 

[poadeleted20]

Well, it was an owner who asked about the surcharge. I just wished to point out that using an independent may have its own cost associated with it. A $10/hr surcharge (or whatever it may be) could be a bargain compared with having to make changes to ones insurance coverage (buy a rider, change to a provider that has CFI requirements that work with the particular independent etc.).

The instructor's policy only covers the instructor. For the owner to be protected, too, the owner still has to have his/her own policy in force, which means making sure the policy allows that instructor to give instruction to the owner. Of course, most all policies do include coverage for operations where the owner is receiving instruction from an appropriately qualified instructor -- without additional cost (provided the instructor meets some minimum standards enunciated in the policy, and they're usually quite reasonable).

The instructor's problem is that the owner's policy doesn't cover the instructor, and that's why the instructor must get his/her own coverage including instructional liability as well has hull and third-party liability at his/her own expense. For me, that's a $1300/year cost, and given the number of instructing hours I log a year, that means about $5/hour added to my rate.

 

[flyingcheesehead]

If you hire an independent, the insurance issue doesn't go away. Does the CFI fulfill the open pilot clause?, does the CFI have enough hours in type to provide instruction (as per your ins co)?, do you have to put him on as a 'named pilot'?, do you put him on your policy as 'additional insured'?, does the CFI carry non-owned coverage that includes instruction......

And even that may not be enough. I am covered as named insured under our club's policy, but there's an exemption for instruction in the policy. So, if I were a CFI, I would be a (named insured) pilot in the right seat giving instruction to a (named insured) pilot in the left seat - And I would not be covered, despite the fact that I'm covered if I'm flying the plane.

So, we generally get instruction from the instructors at the FBO, who are covered by the FBO's policy. I have more hours in 2 of our 3 planes (those two also being types that the FBO doesn't rent) than any of the instructors at the FBO... I'm named insured when I'm flying them... And the insurance company doesn't want to cover that.

 

[poadeleted20]

And even that may not be enough. I am covered as named insured under our club's policy, but there's an exemption for instruction in the policy. So, if I were a CFI, I would be a (named insured) pilot in the right seat giving instruction to a (named insured) pilot in the left seat - And I would not be covered, despite the fact that I'm covered if I'm flying the plane.

So, we generally get instruction from the instructors at the FBO, who are covered by the FBO's policy. I have more hours in 2 of our 3 planes (those two also being types that the FBO doesn't rent) than any of the instructors at the FBO... I'm named insured when I'm flying them... And the insurance company doesn't want to cover that.

Lemme see if I got this -- your club's insurance doesn't cover club members receiving instruction? Or it just doesn't cover the instructor giving instruction even if the instructor is a club member? The latter I can believe, but not the former.

 

[flyingcheesehead]

Lemme see if I got this -- your club's insurance doesn't cover club members receiving instruction? Or it just doesn't cover the instructor giving instruction even if the instructor is a club member? The latter I can believe, but not the former.

The latter is correct. In the case of getting instruction from the FBO's instructors, the club and the club member receiving instruction are covered by the club's policy, while the CFI is covered by the FBO's policy.

If the CFI were a club member, the club policy would NOT cover them, despite them being covered flying the plane and not giving instruction.

 

[BillTIZ]

+1.

Flight schools charge more for a variety of reasons, but the primary one is insurance.

At one, they even tried to require you to use their CFIs if you so much as leased hangar space from them. At a higher rate, of course. Even got the airport to enact rules "banning" independent CFIs from the airport. Easy enough to get around, though, with other airports nearby.

If it is a public airport receiving AIP funds from the FAA they cannot ban independent "through the fence" CFIs. They cannot discriminate one business from another to create a business advantage or favor one company over another.

 

[poadeleted20]

The latter is correct. In the case of getting instruction from the FBO's instructors, the club and the club member receiving instruction are covered by the club's policy, while the CFI is covered by the FBO's policy.

If the CFI were a club member, the club policy would NOT cover them, despite them being covered flying the plane and not giving instruction.

I'm guessing that the club elected not to obtain a policy allowing the club to be a flight training provider. That's a decision the club can make. However, the club had best be very careful about not being involved in any way, shape, or form when club members give instruction to other club members -- it might look like a violation of the insurance provisions.

 

[poadeleted20]

If it is a public airport receiving AIP funds from the FAA they cannot ban independent "through the fence" CFIs. They cannot discriminate one business from another to create a business advantage or favor one company over another.

That's not entirely true. They can establish minimum requirements for businesses operating on the field based on safety standards. However, unless the independent CFI sets up an office on the airport and hangs up a shingle in front of it, it's hard for the airport to say s/he's operating a business on the airport. Where you see this more often applied sucessfully is when someone starts running a maintenance shop out of his leased T-hangar in contravention of the terms of the lease.

 

[flyingcheesehead]

I'm guessing that the club elected not to obtain a policy allowing the club to be a flight training provider. That's a decision the club can make. However, the club had best be very careful about not being involved in any way, shape, or form when club members give instruction to other club members -- it might look like a violation of the insurance provisions.

Hmmm. The club did just institute a policy of "approving" CFI's that aren't working at the FBO due to a couple of issues. Could that cause a problem?

 

[wsuffa]

That's not entirely true. They can establish minimum requirements for businesses operating on the field based on safety standards. However, unless the independent CFI sets up an office on the airport and hangs up a shingle in front of it, it's hard for the airport to say s/he's operating a business on the airport. Where you see this more often applied sucessfully is when someone starts running a maintenance shop out of his leased T-hangar in contravention of the terms of the lease.

Correct.

Very hard to catch a CFI, unless he's known by airport management and then only if they can establish that instruction is taking place. Otherwise he could just be a passenger.

Maintenance is much easier, especially if the hangar door is open or the purveyor of maintenance services has to have a card/code to access the field.

 

[Lawreston]

Thanks for all the opinions. I must clarify here, that though "you" and "your" have been multiply referenced in said responses, I am not the pilot/owner of concern; I was posing the question on behalf of the pilot/owner(s) who are newly transferred to the area.
It appears they have aligned with an independent CFI; and are getting wind of grumblings from the FBO.

HR