Plane Owners - Would You Rent out your Plane?

Would You Use such a service if it could save you $1000's per year?

  • Yes

    Votes: 5 5.4%

  • No

    Votes: 87 94.6%
  • Total voters
    92
Valor

Valor

Filing Flight Plan
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Feb 11, 2017
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Valor
First off, I'm new here, so I'll provide a quick introduction...

I'm currently 22, a mechanical engineering student, I run a small ecommerce business, and I'm a web developer as well. I'm by no means an insider in the aviation industry, but I am familiar with the industry and have even taken several classes from Embry Riddle on different aspects of the industry.

I've always been interested in aviation - in fact, when I was younger, I wanted to be a pilot for the longest time. Recently, I began to look into taking flight lessons to get my private pilots license, and was kinda shocked by the prices to rent an aircraft, so I did a little research and came up with an idea.

From what I gathered, renting an aircraft for lessons can range anywhere from $100-120 per hour, and it only costs about $50-60 per hour in variable costs (costs that increase the more you fly) to run these aircraft, taking into account fuel, oil, maintenance and all the other variable costs.

There's also another problem I've noticed when looking at the numbers. Owning an aircraft doesn't seem to be very practical economically most of the time, often being about the same cost (or close) as renting an airplane.

So here's the idea...

A website where aircraft owners can rent out their planes to pilots looking for planes to rent.

Basically Sailo for airplanes (google it).

The airplane owner could rent the plane out for anywhere what it costs to run the aircraft ($50-60), and the typical price to rent one ($100-120). This would allow the pilot renting the aircraft to save 25-50% off the cost of renting it, and it would allow the owner of the aircraft to make an income from his plane to contribute to his fixed costs of ownership (loan, insurance, hangar fees, etc.), thus reducing his costs of ownership, making it more practical economically to own a plane. I did the math - as a plane owner, you could still maintain 80%+ access to your plane throughout the year and reduce your fixed costs by up to 50%.

Plane owners: What do you think of this idea? Would you rent out your plane? What concerns would you have?

Pilots: Would you consider renting a plane from another pilot if you could save 25-50% off the costs of renting an aircraft? What concerns would you have?

The math works out, but I know there would be other concerns people would have, such as how well the plane would be taken care of, how safe it would be to fly, etc. All of these things could be addressed with a few solutions.

The website would require verified ID's of every pilot and plane owner, and there would be a peer review system to ensure everyone is honest and trustworthy, and to weed out people who wouldn't want to take care of your plane, etc., plus insurance would be included in the rental price to cover any damages.

For aircraft safety concerns, each pilot could be required to upload their pre-flight checks, etc. when renting the aircraft, so anyone can view the aircrafts history for whoever rented it before them. In addition, there are certain safety regulations that are required when renting out aircraft (such as certain inspections) that would be met to further ensure safety of the aircraft.

Now, I'm neither a plane owner nor a pilot yet (although I plan to be both in the future), so I want your guys' opinions.

What do you guys think of the overall idea? Please shoot some holes in it, and tell me if you think it would be a good idea, if you would use such service if it could save you thousands of dollars per year, and what concerns you would have as a user of such a service.
 
where are you getting your cost to operate numbers and/or what is & isn't included?
 
MauleSkinner said:
where are you getting your cost to operate numbers?
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I can't post links yet since I'm new, but I got numbers from a write-up that AOPA published called, "Hypothetical Operating Cost Calculation".

The fixed costs of ownership are less important than the variable costs (what it costs to run the aircraft), which I figured from that write-up to be about $50-60 per hour, even taking into account added maintenance the aircraft would need as a result of more flight hours being logged.

I did some research, but like I said, I'm definitely not a pilot or plane owner yet, so there are possibly (and likely) some things I overlooked. Please mention them if so. Although I feel there's plenty of room for me to be wrong on the numbers with this, and still have this be valuable to pilots and plane owners.

EDIT: So what I've included mainly is Fuel & oil at about $45 per hour, and ongoing maintenance estimated at about $15 per hour. The AOPA article I mention estimates about $2500/yr for maintenance at 100 hours per year ($25/hr). The estimated maintenance could be a bit higher, but even at $30/hr for maintenance, the total variable costs would be about $75, where the typical costs to rent that aircraft are about $100-$125/hr, leaving at least a $25-50 gap there.
 
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A 10-gph airplane is going to be 50-60 bucks in gas alone. Insurance will probably increase substantially...10 bucks an hour if it flies a LOT. Added wear & tear (the primary reason I didn't enter into a leaseback when I had the opportunity)...it's going to add up pretty fast.
 
Valor said:
I can't post links yet since I'm new, but I got numbers from a write-up that AOPA published called, "Hypothetical Operating Cost Calculation".

The fixed costs of ownership are less important than the variable costs (what it costs to run the aircraft), which I figured from that write-up to be about $50-60 per hour, even taking into account added maintenance the aircraft would need as a result of more flight hours being logged.

I did some research, but like I said, I'm definitely not a pilot or plane owner yet, so there are possibly (and likely) some things I overlooked. Please mention them if so. Although I feel there's plenty of room for me to be wrong on the numbers with this, and still have this be valuable to pilots and plane owners.
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My 140 is probably one of the cheapest aircraft types to operate. I still have variable costs in the neighborhood of 70-80 dollars not including unexpected maintenance items. Fuel alone is roughly 50/hour. My maintenance expenses amortized over the last 40 or so hours works out to be another 40-50 bucks an hour or thereabouts.

That doesn't include my fixed costs. And you're proposing a commercial operation, so the insurance is now 4 times as expensive and your maintenance requirements are significantly higher than only doing 1 annual a year.
 
Already exists...called a leaseback to a FBO.

Biggest red flag is that just a Pilot's Certificate and BFR does not necessarily equal proficiency or competency...that is why FBO's require a checkout with a CFI before they will rent to you.

To an immediate friend or family that I trust...possibly...random pilot?...not a chance.

As an owner...open rental is not happening for me. If I need to reduce costs I am gonna bring on a partner WELL before letting it out to rent.
 
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Most (not all) owners own because they want their plane to be available whenever they want it. They don't want to have to schedule/compete against renters to fly their plane. Additionally, as already mentioned, many owners put a lot of time and money to get their plane exactly how they want it. Most owners don't want renters, many of which don't care about keeping your plane pristine, damaging the interior, spilling stuff, not running the engine best for longevity, etc etc.

With that said, their are people who lease back. Of those who do, they are typically training type planes and not serious travel machines.
 
I think your optimistic on your idea that renting from an individual would somehow be cheaper than a school/club. Just from people I've talked to around here about 120 an hour for a 70s 172 seems to be the start of the "safe" price to where your not skating by on luck that nothing bad happens.

Our club charges 76 an hour for a 172 that we've owned forever and whos fixed cost is covered by club fees. We aren't making money on it.
Casual wild a guess math here but...

For your private guy with a piper or 172 45 an hour in gas 10 an hour in MX 15 an hr in engine/prop overhaul fund so your at 70 just in what it takes to run it. Hanger 300 bucks a month, insurance possibly steep ifyour renting it out. If you rent out a personal plane for an hr a day your looking at close to 90 at the minimum just to break even. You'd need some incentive cause no ones gonna rent their plane just to help out so another 20 bucks in "potential profit" and your at 110ish bucks an hour maybe making a little money maybe just enough to cover the new tires cause someone flat spotted the mains or dragged the brakes for two miles taxiing at the class charlie. Then you think well maybe I need to charge 120 just to be safe. Really theres no way to come in cheaper than a club and flight schools are honestly charging just enough to stay afloat so theres not much room to make things cheaper to rent.
 
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MickYoumans said:
I have put a lot of TLC and money into getting my airplane in great shape. I baby my airplane. I can't imagine a renter taking care of it nor do I think what little money you would get for the rental being worth the risk and hassle.
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Shawn said:
Already exists...called a leaseback to an FBO.

Biggest red flag is that just a Pilot's Certificate and BFR does not necessarily equal proficiency or competency...that is why FBO's require a checkout with a CFI before they will rent to you.

To an immediate friend or family that I trust...possibly...random pilot?...not a chance.

As an owner...open rental is not happening for me. If I need to reduce costs I am gonna bring on a partner WELL before letting it out to rent.
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Exactly what I thought the biggest issue would be, even if the numbers would work out favorably. I would probably be the same way if I owned a plane.


Thanks for all the replies. The article I read must have low-balled some (or all) of the variable costs.
 
I wouldn't do it. The whole reason I bought my plane was so it would be available whenever I wanted fly. I'm not waiting in line to fly my own plane. I also don't like the idea of someone else flying my baby. The revenue wouldn't be worth it to me.
 
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Stingray Don said:
I wouldn't do it. The whole reason I bought my plane was so it would be available whenever I wanted fly. I'm not waiting in line to fly my own plane. I also don't like the idea of someone flying my baby. The revenue wouldn't be worth it to me.
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I understand all these responses perfectly. Like I said, I wouldn't do it if it was me personally either.

Wasn't sure if there would be other people out there who would, but it doesn't appear that the margin between variable costs and rental prices is as significant as I'd thought either.

I appreciate all the feedback though.
 
You are going to have to have insurance that covers this. Normal owners insurance doesn't cover renting your plane to someone else. And that insurance is 3 times as much.

What you are proposing doing is possible. Buy an airplane and put it on leaseback. About the only owners that make money doing that are owners that also do the maintenance (and in some cases the instruction also).
 
coloradobluesky said:
You are going to have to have insurance that covers this. Normal owners insurance doesn't cover renting your plane to someone else. And that insurance is 3 times as much.

What you are proposing doing is possible. Buy an airplane and put it on leaseback. About the only owners that make money doing that are owners that also do the maintenance (and in some cases the instruction also).
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As most people here know, my plane is on leaseback. Thus far it has covered its own fuel and defrayed the cost of some maintenance items that would have needed to have been addressed whether it was leased back or not.

Unless you own your plane outright, are instructing in it, or do your own maintenance, leasebacks are not a source of profit.
 
I think most owners own because they don't want to deal with the things that go along with sharing a plane.
 
Not a chance in the world. Nobody would take care of it properly, and the added hours and wear aren't worth making a few dollars over cost.
 
Also think about the concept of the proposal...to be able to rent a plane cheaper than a traditional FBO...at a better rate on a plane that most FBO's owns outright. If there were such high margins on FBO plane rentals there would either be more planes on the line or more competitive rates already to try and increase sales volume.
 
No way that we would rent out our plane to anyone else. o_O;) Seems, we are not alone... 100 % 'no' so far... :D
 
So... what's exactly different between this and openairplane? The answer would still be a solid no from me.
 
The margins arnt as good as you think they are.

Basically I could let someone rack up hours on my plane, and for next to no profit margin?

Pass.
 
Valor said:
There's also another problem I've noticed when looking at the numbers. Owning an aircraft doesn't seem to be very practical economically most of the time, often being about the same cost (or close) as renting an airplane.
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To this point in your trying to solve a problem from a business solution...the consensus for an ownership "break even" point is about 100 hours a year with everything factored in. I know that is true with my numbers...but most do not buy to save money, they buy for convenience and availability as noted...and having both those lends itself to flying even more hours at a more economical rate.

If you are talking a 25-50 hour a year guy...then they would most likely go the club/partnership/fractional path if they don't have the money to burn...and if you do have the money to burn, a little side revenue is not gonna be much of an incentive for the potential downside of renting out.
 
It's also not practical to eat red meat, drink alcholol, buy expensive clothes, drive nice cars, or date expensive women.
 
ircphoenix said:
My 140 is probably one of the cheapest aircraft types to operate. I still have variable costs in the neighborhood of 70-80 dollars not including unexpected maintenance items. Fuel alone is roughly 50/hour. My maintenance expenses amortized over the last 40 or so hours works out to be another 40-50 bucks an hour or thereabouts.

That doesn't include my fixed costs. And you're proposing a commercial operation, so the insurance is now 4 times as expensive and your maintenance requirements are significantly higher than only doing 1 annual a year.
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You must have some expensive fuel. When I used to fly 140s, I'd burn 7-8GPH.
 
The 206 burns 18-20. At least the new bird will be faster and less burn. Might help offset the cost of that chute
 
The more preferred method with something like this is getting some non-equity partners. You keep control over the airplane, but you allow some vetted people to also fly the plane in exchange for a monthly fee toward costs + a dry rate.

A site that properly allowed people to find owners seeking non-equity partners (something basically non-existent right now) would be useful.

But you aren't going to find many owners who will just straight up rent their plane out. Too much added cost and risk when it becomes a "rental."
 
No. Renters don't care enough. My insurance would go up or not allow it. My variable expenses would go up. Some of my fixed costs would go up, too. My plane would not be available every time I want to fly it. It wouldn't be cleaned up as well. Renters would be less tolerant about all those handy things I leave in the plane all the time. They might walk off with the first-aid-kit, blanket, my hats, etc.
 
Yup...the only one making anything with this arrangement is the insurance company.
 
I have been involved in all aspects of aircraft ownership, personally and professionally, for 18 years now. In the long run I'm convinced of this: there's simply no way to make money by renting out, or leasing back an airplane. Defray expenses in some cases? Possibly, especially with tax ramifications, but you're talking turbine equipment at that point. It's almost always a losing battle, and most leaseback owners of piston equipment come to this realization the hard way. As always in life there are exceptions - unique agreements, specialized aircraft and missions, company leasebacks to a sub-company or division, etc. But 99 out of 100 times, a personal owner renting out his or her aircraft will come out on the short end of the deal.

As others have suggested your calculations are neglecting to consider the insurance requirements for aircraft rental, and you're forgetting exactly what the 'middleman' you're hoping to cut out of the deal really does: provides aircraft checkouts, maintains the aircraft, and runs the overall "business" of an airplane rental operation.

And from a business perspective only, your concept would be extremely "thin." Even if you found a best-case scenario in which you could take a point or two off the top for your service, there's simply not enough volume, and your liability would be sky high, pardon the pun.

Sorry to be a killjoy, but you have a total non-starter here. There are some tried and true ways to actually make money in aviation, and this one is definitely not one of them.
 
People leaseback their airplanes to flight schools. Many but not all live to regret it. At least there is some supervision of pilots renting leasebacks from schools.

A friend has several cars he rents out through Turo. He's had one totaled, several damaged, and several pretty bad trash-outs. A 'Turo for airplanes' is going to have to offer really solid insurance, not only against loss or damage to the airplane, but cleaning fees as well.

He's a decent mechanic, so he's making money with Turo, but managing them can be pretty time-consuming.
 
Even if the math did work out (it doesn't) and let's say the owner could make $25/hr profit renting out his plane, the $100 a month the owner pockets renting the plane out 48 hours a year wouldn't come close to covering the additional maintenance and fixing all of the little things that get broken renting out the plane. Once you add 100hr inspections, additional insurance, and loss of use it's a really bad deal for owners.
 
I think the responses to the vote pretty much give the answer.
 
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