How to calculate per hour cost

Joe_B1

Joe_B1

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Joe_B
I have a 79 archer and am stumped at how to calculate a dry rate. A friend who has much more time than me would like to use it from time to time. I spoke to my insurance company and the premium won't change. The engine part seems to be around $15 per hour but there are many more things to factor into a per hour cost. Maintenance, airframe, annuals to name a few.

I need the wisdom of the PoA brain trust.
 
What does one rent for in your area? Start there and discount it if you want to give the guy a deal. Theoretically they are making money at that rate so you should be able to do a little better assuming you are just trying to break even.
 
This is more a philosophical question than an accounting question, since the number of hours flown will greatly affect the cost per hour. As to what to charge your friend, take a look at the rental market, keeping in mind that on one hand many flight school aircraft lose money or just barely break even (they make up for it on instruction), but they also have higher expenses with commercial insurance, 100-hr inspections, etc.
 
If it was me it would really depend on how close is the friend and how often is "time to time". If it's something like 1-2 hours a month I would probably just let them borrow the plane for the cost of fuel. If it's beyond that I would probably look at what my own hourly rate is, minus insurance, and probably charge a little less than that...
 
My rule of thumb for maintenance is to set it the same as the cost of the engine - so, $15 for the engine, $15 for the maintenance. Then come up with a judgement of what he should pay to help defray the cost of the hangar/ramp, annual, insurance, etc. Not half, but not zero either. You’ll come up with a number that is significantly lower than any rental price and your friend will be thrilled.
 
I charge myself $50 per hour dry to operate the plane. I have a couple of friends who use my plane from time to time and they pay $80 per hour. AOPA has a pretty decent section on determining this cost.
 
Before you can calculate hourly cost, you need to estimate the number of hours to be flown annually. Then divide the basic cost of annual and maintenance by those hours. The more you fly, the lower the per hour cost.
 
Is it legal to for a private person to rent out an aircraft? I ask because I don't know. I think it SHOULD be, but . . .
 
eman1200 said:
Charge four times what local rental rates are. No one will ever ask to fly your plane again!
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Long story short...a coworker had a Mooney. He upgraded the avionics, engine, etc. Another coworker asked to partner up (could have been dry rent). Very shortly into this he prangs the prop on a runway in Arkansas, has a shop down there “fix it”. Nightmare ensues.

I’m guessing for every horror story there’s many success stories but anyone thinking about allowing others to use their plane should consider the possible negatives and if it’s worth it to them.

I wouldn’t rent my plane to anyone but if I did, I’d factor in the past 3 years of TOTAL cost (outside of fuel) and divide it by the past 3 years of hours flown and that would be my number.
 
There was a post on the C150/152 Facebook group with a picture of a 150 with significant ripples in the fuselage and a comment along the lines of "My uncle borrowed my plane and said he had a hard landing, is this something I need to be concerned about?" The replies basically told him his plane needed to be totaled...the OP wasn't happy and the post disappeared later that day.
 
Radar Contact said:
Long story short...a coworker had a Mooney. He upgraded the avionics, engine, etc. Another coworker asked to partner up (could have been dry rent). Very shortly into this he prangs the prop on a runway in Arkansas, has a shop down there “fix it”. Nightmare ensues.

I’m guessing for every horror story there’s many success stories but anyone thinking about allowing others to use their plane should consider the possible negatives and if it’s worth it to them.

I wouldn’t rent my plane to anyone but if I did, I’d factor in the past 3 years of TOTAL cost (outside of fuel) and divide it by the past 3 years of hours flown and that would be my number.
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There is always that possibility. I tend to avoid doing any business with relatives or close friends, and I seldom loan anything to anyone. I'm more than happy to use my items to help someone anytime, but I don't let things get borrowed.
 
There's a very small group of people I'd trust to fly my airplane (and none would ask to use it on any sort of regular basis), and all of them are close friends that I wouldn't bother trying to work out a "dry rate" to use it from time to time (likely just in a pinch if their airplane is down). Put gas in it when you're done and don't leave it dirty.

I don't think I'd consider letting someone use it on a truly regular basis.
 
Thanks to all, I worked it out to $46 per hour dry. As far as letting someone else fly it. My friend has thousands of hours, I have hundreds. My friend is a CFII, MEI, ATP. Could he have a mishap? Sure, that's why I have insurance. I spoke to the company and he is covered under my policy. I am willing to take the risk. Thanks to all again.
 
Joe_B1 said:
I have a 79 archer and am stumped at how to calculate a dry rate. A friend who has much more time than me would like to use it from time to time. I spoke to my insurance company and the premium won't change. The engine part seems to be around $15 per hour but there are many more things to factor into a per hour cost. Maintenance, airframe, annuals to name a few.

I need the wisdom of the PoA brain trust.
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I would say look at essentially comps as others have said. What are others renting the plain. It's likely that a well establishes business has already done all of the calculations for you. If so, that may save you time and effort. Unless you have a very different situation, you should be pretty close to an accurate number.
 
midwestpa24 said:
Before you can calculate hourly cost, you need to estimate the number of hours to be flown annually. Then divide the basic cost of annual and maintenance by those hours. The more you fly, the lower the per hour cost.
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If you’re trying to profit. If you’re not, you don’t need to account for fixed costs that you would spend anyway.
 
Joe_B1 said:
I have a 79 archer and am stumped at how to calculate a dry rate. A friend who has much more time than me would like to use it from time to time. I spoke to my insurance company and the premium won't change. The engine part seems to be around $15 per hour but there are many more things to factor into a per hour cost. Maintenance, airframe, annuals to name a few.

I need the wisdom of the PoA brain trust.
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$45 hr dry tach time. A friend price that will help offset your costs. If this is someone you know well and trust will operate your airplane how you want it and in a way that is hassle free for you.

Edit: I posted without seeing the end of the thread and it seems you came to the same number.
 
dell30rb said:
$45 hr dry tach time. A friend price that will help offset your costs. If this is someone you know well and trust will operate your airplane how you want it and in a way that is hassle free for you.

Edit: I posted without seeing the end of the thread and it seems you came to the same number.
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He is my instructor and a good friend. The back story is he owns an RV8 but can't take his 4-1/2 year old son up in it. He wants his boy to experience general aviation flight as well as take his family on some trips. I was glad to help him get his family in the sky.
 
JOhnH said:
Is it legal to for a private person to rent out an aircraft? I ask because I don't know. I think it SHOULD be, but . . .
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Yes. In a piston rental to a pilot for personal use (not charter) there are no FAR issues unless it's being used by a CFI for paid flight instruction (100 hour inspections). Insurance is a more practical issue, but most allow a certain number before (I think up to 5 total pilots is common) they consider it a club or commercial enterprise with higher premiums,
 
Joe_B1 said:
He is my instructor and a good friend. The back story is he owns an RV8 but can't take his 4-1/2 year old son up in it. He wants his boy to experience general aviation flight as well as take his family on some trips. I was glad to help him get his family in the sky.
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Sounds good. You might add him to your insurance policy as a named pilot for peace of mind (for both of you). I am an instructor, if i'm doing anything beyond a quick BFR for someone in a privately owned aircraft I usually ask to be added to their policy. All he has to do is fill out a one page pilot history form. As midlifeflyer mentioned it will not cost you anything. Make sure you get some rides in the RV-8
 
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