Is there any profit in refurbishing aircraft?

mtnflyr said:
There's got to be a way to make money refurbishing planes.. I think it would come down to you having a stack of cash to waive in front of people when you buy the plane from them so they get green in there eyes, and a little black book of were to source parts that you would protect with your life.
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You got the idea. :thumbsup:

My market would be cash buyers who would take the 179 and still have plenty of room for more equipment purchases. No need for financing.
 
I guess the only thing left to do is "show em how it's done". Anyone know how to make a small fortune in aviation?
 
@azblackbird: while there are some naysayers, a lot of folks have contributed some good info here and asked some really good questions based on their decades+ of experience.

Some of the questions you won't answer at all, some you answer vaguely, some you just deflect to the 'model' says differently.

Here's the deal. I'll do a pro-bono quick look for you. Same thing I do for my customers who look at profitability (which is your initial question) for a living.

I won't pass judgment, just do the interviews and give you the direct voice of today's market.

I'll even let you decide whether or not to publish the final report here on PoA.

Offer's on the table.
 
TCABM said:
@azblackbirdSome of the questions you won't answer at all, some you answer vaguely, some you just deflect to the 'model' says differently. Here's the deal. I'll do a pro-bono quick look for you. Same thing I do for my customers who look at profitability (which is your initial question) for a living.
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@TCABM ... thank you for the offer... however, before you do your "pro-bono" work, it might be of some help to you in knowing what exactly it is that you're pro-bonering. :D

Asking detailed questions would be a great start so you can gather the correct information in order to make an informed analysis. I'll try to be as accurate as possible in my answers. Ball is in your court... ask away. You can do it here or in private, your choice. ;)
 
TCABM said:
Instead of asking if there is a market, the question you need to answer is

how big is the market?
Can you segment the market?
Who are you going to target in the market?
How is your product going to be positioned in that market?
Is the market at or near saturation?
What is your competitive advantage?
How are you/your team going to do it better? Faster? Cheaper?
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@azblackbird: ^ here you go from post 144.

Also, tell me about your first market and follow on market.
How big are those markets?
What's the connection to get to your follow on market?
What's the spread between wholesale and retail for parts?
How much labor (hrs) is involved in doing what you want to do?
What's the going rate for labor in the market today?
What features and benefits does the market want?
What is your target market willing to pay for the product you're going to deliver?

No skin off my back. It's an hours worth of work a day for a couple of weeks for me to do this work.

Now, if you want market validation and not just a quick look, then I know a guy. And that'll cost you.

ETA: I don't analyze; in this case, you get to. I just give a report of facts I've learned through market interviews and expert interviews.
 
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TCABM said:
1. Tell me about your first market and follow on market.
2. How big are those markets?
3. What's the connection to get to your follow on market?
4. What's the spread between wholesale and retail for parts?
5. How much labor (hrs) is involved in doing what you want to do?
6. What's the going rate for labor in the market today?
7. What features and benefits does the market want?
8. What is your target market willing to pay for the product you're going to deliver?
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1. Primary market would be small to medium sized sec. 179 business owners, farmers/ranchers, etc. who have expanded territories, satellite locations, or extensive farm/land/cattle holdings. Secondary market would be those very same people who already own aircraft, but may be showing their age with near run-out engines, outdated avionics, paint, interiors, etc. and who would be looking for a fresh upgrade to a similar of more complex aircraft than what they already have without the costs of purchasing new.

2. There are approx. 6 million owner/operated companies with 500 employees or less in the CONUS.

3. Follow on market are already business aircraft owners who would know the value in upgrading to a well restored and appointed aircraft similar to, or more complex in nature than to what they already own.

4. Normal keystone

5. Approx. 400 to 500 hrs. per aircraft

6. $25 per hour seems to be the average for the labor costs involved. Some higher, some lower.

7. Potential market would want a no nonsense ready-to-fly updated and well appointed used aircraft that would require minimal maintenance, and that they could immediately put into service as a tool to further their business interests.

8. About the same cost as a re-furbished combine, tractor, vacuum truck, wireline truck, excavator, loader, dozer, high end CNC, irrigation system, car shredder, DI printing press, assembly robot, compressor station, packaging unit, portable seismology unit, weigh station, grinding tub, etc. etc.

Just an FYI... your gonna have to ask a helluva lot more questions than that if you're going to do a proper "quick look" :yesnod:
 
Azblackbird you seem to do your research..I'm curious, what do you do for a living? Pm me if you don't want it out in the open.

I've been a lurker on this board for a bit and I have taken notice you don't have a PPL yet, but your pretty active in this endeavor.

For some reason I want to send you my resume! Hah... but I think your on to something. The aviation world is due for a different way to do business.
 
mtnflyr said:
Azblackbird you seem to do your research..I'm curious, what do you do for a living? Pm me if you don't want it out in the open. I've been a lurker on this board for a bit and I have taken notice you don't have a PPL yet, but your pretty active in this endeavor. For some reason I want to send you my resume! Hah... but I think your on to something. The aviation world is due for a different way to do business.
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@mtnflyr I own an internet/advertising company. No PPL or instrument yet. Studying for all that as we speak, in addition to launching a new start-up that requires the use of a small airplane as a travel tool, thus the reason for the PPL and instrument. Plus I like to fly and now have a good reason. ;)

Sorry, but I don't do employees anymore, all contract now. Got a meeting Monday with one of the board members here. Sounds like a professional, so I would be anxious to hear his take on the plan. I'm just seeing a niche that looks like it could to be filled... that's all.:dunno:

What's your area of expertise?
 
Az,

I really don't have much to say.

my profession is; I evaluate dealer inventory and I determine market strategy based on vehicles available...
 
mtnflyr said:
I evaluate dealer inventory and I determine market strategy based on vehicles available...
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Inventory as in what's currently on the lots, in transit, or on order? What type of strategies? Just curious... I always like to learn about the intricacies of various types of businesses besides my own. :cool:
 
azblackbird said:
Inventory as in what's currently on the lots, in transit, or on order? What type of strategies? Just curious... I always like to learn about the intricacies of various types of businesses besides my own. :cool:
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Unfortunately, I really can't answer this.

AZ, we could probably chat for hours.
 
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has to be some money in this.....everyone is doing it and they all look rich. ;)
 
Checkout_my_Six said:
has to be some money in this.....everyone is doing it and they all look rich. ;)
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That's kinda the point of being in business. You start a business that nobody else is doing. Eventually a few will catch on and mimic your ideas and will do fine. My current business I only have 4 competitors. We've been leap frogging each other for the last 10 years trying to outdo one another and offer more services or shiny new objects to grab more share of the client base. The new start-up I have in the process I will have only have one competitor here in the state of AZ, and she's not really a competitor per se. In fact once I get rolling we'll probably end up working together in some form or another. She's all about television and has a regular show each week showcasing unique areas of AZ. I'm all about the internet and will be doing the same with her contacts/clients and more, but will be giving them more long term exposure than they would normally get from a 10 minute spot on her TV show.

But hey... if it was that easy or profitable everybody would be doing it... right? :rolleyes:
 
based on your comments here.....I would expect you lose a huge bag-o-cash on this endever. You know nothing about aviation maintenance, operations, or the market. Three strikes bro. lol

But....you should try it. Else you'll never know. :D
 
Checkout_my_Six said:
based on your comments here.....I would expect you lose a huge bag-o-cash on this endever. You know nothing about aviation maintenance, operations, or the market. Three strikes bro. lol
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:rofl: :rofl: :rofl: :rofl: LMAO... you guys kill me! Yeah... re-furbing aircraft is so complicated. OMG! :yikes:
 
Checkout_my_Six said:
based on your comments here.....I would expect you lose a huge bag-o-cash on this endever. You know nothing about aviation maintenance, operations, or the market. Three strikes bro. lol
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You dont understand. It's all plastics and ball-bearings these days. Just a couple petabytes more data and targeting and those millions of small business people will go out and 179 this next years profit into a properly 'appointed' Cessna 210. You just have to sell it right to people who don't know yet that what they need is a 40 year old dolled up 210 and you'll make a killing.

Now, where can I find an A&P at an all-in cost of $25/hr ?
 
weilke said:
You dont understand. It's all plastics and ball-bearings these days. Just a couple petabytes more data and targeting and those millions of small business people will go out and 179 this next years profit into a properly 'appointed' Cessna 210. You just have to sell it right to people who don't know yet that what they need is a 40 year old dolled up 210 and you'll make a killing. Now, where can I find an A&P at an all-in cost of $25/hr ?
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Actually, you're not too far off the mark there dude. :thumbsup:
 
azblackbird said:
:rofl: :rofl: :rofl: :rofl: LMAO... you guys kill me! Yeah... re-furbing aircraft is so complicated. OMG! :yikes:
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It's not complicated at all. That's why there is very little profit in offering the entire package beyond a buyer doing the individual sub-jobs on his own account.
There have been several attempts at selling a completed refurbishment package, be it for P-barons, plain BE58s, TB20s, PA31, SR22s, PA32 and others. All of these refurbishers have trouble getting the premium price they need to command to make it worthwhile for the buyer. Your problem is that you are dealing with informed customers. They know that 5 years in, your 'lock&key' Navajo is again a 30 year old plane with high time engines and there is very little value premium on your imron paint or your all-new sound insulation material.
 
Checkout_my_Six said:
so....what do you expect to pay your DOM? $16-17/hr? :lol:
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Don't expect to pay them anything actually. Ideally we'll do equity sharing which by my calculations could approach $100 per hour when it's all said and done. ;)

I know this is hard for you, but here's the average yearly DOM pay... hmmm... now what's that hourly rate again? :rolleyes:

Director Of Maintenance $50,000.00 $55,000.00 $60,000.00
 
weilke said:
It's not complicated at all. That's why there is very little profit in offering the entire package beyond a buyer doing the individual sub-jobs on his own account. There have been several attempts at selling a completed refurbishment package, be it for P-barons, plain BE58s, TB20s, PA31, SR22s, PA32 and others. All of these refurbishers have trouble getting the premium price they need to command to make it worthwhile for the buyer. Your problem is that you are dealing with informed customers. They know that 5 years in, your 'lock&key' Navajo is again a 30 year old plane with high time engines and there is very little value premium on your imron paint or your all-new sound insulation material.
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WTF? Now you're talking gibbersh... make some sense there kid. :rolleyes:
 
azblackbird said:
Dayyyyummmm... you guys must have ate your wheaties this morning. :thumbsup:

Uhhh... just an FYI... I know facts are hard for some of you here, but here's the break down on what the average A&P makes per hour/year.

It actually kinda sucks they don't get paid more. :(
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You mistake what they are being paid with what the loaded cost would be for you to hire them. You said you don't want to have employees in this venture, so that leaves you with 1099 subcontractors. Anyone you sub to do the work will charge you his salary, tax and insurance cost in addition to a charge to use the tens of thousands tied up in his toolboxes. I can assure you that it won't be an all-in $25 for an A&P who is worth his salt.
 
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azblackbird said:
:rofl: :rofl: :rofl: :rofl: LMAO... you guys kill me! Yeah... re-furbing aircraft is so complicated. OMG! :yikes:
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You can refurbish it. The trick will be finding people who want to buy your refurbished 210s for the money you put into it plus profit. I know a couple who tried this with Cherokees, which would seem to be an easier sale than a 210. They lasted a year or two. He went on to work in sales for a well-known manufacturer, and she went back to the much more lucrative job she had before.
 
Everskyward said:
You can refurbish it. The trick will be finding people who want to buy your refurbished 210s for the money you put into it plus profit.
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Already have the client base lined up. Just a matter of putting it all into action, which won't be for at least a 3-5 yr. time frame. The airplanes aren't going anywhere, and neither are the clients barring any unforeseen circumstances (depression, market crash, nuclear war, etc) ;)
 
Or, you could contract the same guys and just do the specific work people want as they want it. Nah, I'm sure people want what you think they want, they just don't know it yet.
 
Salty said:
Or, you could contract the same guys and just do the specific work people want as they want it. Nah, I'm sure people want what you think they want, they just don't know it yet.
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There may be a few options/choices available... now you're giving me more ideas, please keep them coming. :thumbsup:
 
azblackbird said:
Already have the client base lined up. Just a matter of putting it all into action, which won't be for at least a 3-5 yr. time frame. The airplanes aren't going anywhere, and neither are the clients barring any unforeseen circumstances (depression, market crash, nuclear war, etc) ;)
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You have specific people who want a refurbished 210 in 3-5 years? Or are you guessing they might.
 
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