Starting a Flight School

Hughes Sky

Hughes Sky

Filing Flight Plan
Joined
Jun 3, 2010
Messages
16
Location
Wilmington, NC
Display Name
Display name:
Stoic
Hello All,
So it has always been a dream of mine to open up my own part 61 flight school.

First off. I've heard all the "The only way to make a small fortune with a flight school is to start with a large one" rhetoric. I appreciate the warnings but that's not really what I'm looking for. All I really want is to live comfortably doing something I love.

My plan is to start small with a Cessna 150. I think that would make a great trainer and the insurance quotes I'v received have been between $2500 - $3000.

I plan on renting out for $50/hr dry. I think this will help me keep cost consistent and will encourage students and renters not to dog the aircraft. At that rate, I figure I need 20 to 25 students who fly about 60 hours to pay off the plane.

What I am really hoping for is any advice or insight from others that have been there; especially if its coming from someone who is succeeding.
Any links to chats about this topic would also be greatly appreciated. I looked but had a hard time finding much.

Sorry if I started kind of abrupt but had some bad reception on a different forum.

Thanks for any advice you can offer and happy flying,
David
 
Nothing abrupt there... welcome to PoA!

You need to tell us what your experience level is, what you've done in this line (or running anyother business), to help assess where you are and where you can go.

Obviously, there are many successful flight schools, some large and some very small, so it can be done. My observation is, for whatever it is worth, that most successful ones primarily use planes leased back from others and include maintenance shops which perform the MX on the aircraft leased back. These two elements alone give them a huge advantage over "fully-owned aircraft" flight schools.

Note well that, if you have only one plane, you will certainly have down time which will materially affect your yield, as other renters / students are bounced out of the schedule and seek alternatives.

Also imperative: evaluate who else is in the area, what their offerings are, how they're doing.
 
Some quick thoughts/questions:

What's the existing flight school situation? A city is only going to have a certain size potential student pool. Who will you be competing with and what is going to make your operation more attractive than the others?

Personally, I like C-150s, but what are the other schools using? If the other schools are using Skycatchers, glass panel 172s or DA-20s, that might work against you, since newer/shinier is more attractive, even though you may have a cost advantage.

You mention 20-25 students. Are you figuring on that many in training at once? If so, I don't think a single 150 is going to get everyone scheduled. Scheduling logistics and 100 hour inspections would be a real problem, I'd think.
 
It's all about market research, both for customers and competition. Is there sufficient unmet demand for the product you offer to provide reasonable assurance of enough volume to make a profit?

BTW, $50/hour for a C-150 sounds pretty low to me -- you sure you have your costs and overhead all in order?
 
Hi David!

I run a "successful" FBO with a flight training component. I say it is successful because it does not lose money. I think this is the success metric which should be applied to any aviation business -- it is a hobby and fun thing for me to do, and I am in a unique career situation which allows me to run an operation like this.

We rent our C150 for 64 wet. It gets 60 hours per month. Insurance is in the range you mentioned. It breaks even.

We rent 5 C172s from an older F model (which is appx 5% profitable @ $79 wet) to a G1000 C172SP (which is appx 10% profitable @ $119 wet). Our C172s get appx 80 hours per month, with the record being 170 in a month. Our planes fly A LOT, and we have about 350 flyable days a year.

We rent an E33 Debonair dry @ $59 in our club, and a C182M @ $59 dry.

The profit figures above are gross aircraft numbers, and do not account for staff and rent overheads.

We are quite vertically integrated. We own a maintenance operation, a fuel farm, a flying club, and a pilot shop. We do enough business on-field with our engine builder and avionics techs to get good deals on their work.

Just pulling some numbers out of quickbooks should tell you what "comfortable" means for this sort of proposal :)

Last 12mo Gross Revenue: 1.4MM

Maintenance (our planes): 352k
Fuel (our planes): 297k
CFIs: 288k
Staff: 212k
Rent/Utilities/Upkeep: 127k
Insurance: 61k
Taxes/Fees/Govt: 34k

...you'll notice that's quite a lot of work to show 30 grand for the year :) It takes one unexpectedly blown motor to gobble most of that up. My capital investment is probably 600k at this point -- so I'm making 5% while investing 1200 hours per year or so. I don't draw a salary from the FBO.

We're coming off of a very difficult 12 mo, of course, and I'm very positive about the next 5 years -- but let's be real. I would NEVER try to feed my family on such a precarious business. I have cash reserves in the bank and an entire other career to lean on.

==

I'm writing this out to illustrate a point -- there is a critical mass that you need to attain before any of this becomes "break even" -- and I think having your own maintenance and fuel are significant portions of that. Additionally, we're in the Los Angeles suburbs, so we have an affluent and active pool of students to draw from -- we do very little advertising, and we bought an existing (albeit crummy) operation to build from/revamp.

I see a lot of single-plane CFIs try to make a go of it, and it's a very tough road. They can do it for a little while -- usually by being sneaky on insurance, or playing games with the 100hr requirement. A C150 can very easily generate a $3500 100-hr when the shop knows you're training in the airplane. They're going to cover their posterior much more than if you were just sole pilot.

I think it's a great thing to run as a retirement vehicle. It's absolutely the most fun I have on any day, every day that I'm at the airport. ...but I never look at it and go "today, I get to live comfortably as a result of these labors" -- in fact, I'm usually just watching where the next $20k bite out of our accounts is going to come from next.

So... retirement hobby, you bet, the best there is I think. Retirement business? Not by the traditional yardstick. :D

$0.02 (@ 5% ROI)

- Mike
 
My suggestion is to buy a good low time C-150, and start teaching, you will be required to do 100 hours inspections, So find a good A&P, to maintain the aircraft and place it on a progressive inspection program. using the inspection cycle given in the 100 service manual. (that does away with the 100 hours requirements)

I believe you rate will attract customers to rent, and tie up your teaching schedule, that may require more than one aircraft. After your students solo, they will tie up the schedule too.

I see most of the CFIs around here having the most fun with 1 aircraft and teach as free lanced instructor.
 
schmookeeg said:
I see a lot of single-plane CFIs try to make a go of it, and it's a very tough road. They can do it for a little while -- usually by being sneaky on insurance, or playing games with the 100hr requirement.
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Tough road indeed.

We (my dad) used share a hangar with a one man / one airplane guy. His claim to fame was he was the lowest cost CFI in the area. He had a real POS airplane and a low cost A&P that maintained it. After watching the CFI's mechanic at work, the old man wouldn't let my sister fly in the CFI's airplane when she went for her PP...

Over the course of several years he ended up losing a couple aircraft to mechanical issues.

Oh - and his wife had a good paying job - I suspect that was the key to his operation.
 
Tom-D said:
I believe you rate will attract customers to rent, and tie up your teaching schedule, that may require more than one aircraft. After your students solo, they will tie up the schedule too.
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I remember a joke my father used to tell about the store owner who was asked how he could make a profit at the low prices he had. "Well, it's true we lose money on every sale, but we make it up on volume." My suspicion is that if he rents that plane for $50/hr, he's going to have a negative cash flow, and you can't operate that way very long.
 
$50/hour dry for a 150 would translate to maybe $75 wet?

Anyway, I'm not sure how well renting a trainer dry would work out as a practical matter. Filling the tanks up after each student doesn't leave a lot of useful load left for the CFI and the student.
 
Trapper John said:
Anyway, I'm not sure how well renting a trainer dry would work out as a practical matter. Filling the tanks up after each student doesn't leave a lot of useful load left for the CFI and the student.
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...and it teaches bad habits.

Better to have each pilot pay for, load, and lean for his/her own fuel.
 
dmccormack said:
Better to have each pilot pay for, load, and lean for his/her own fuel.
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But to do that, you need some reference point in the tanks to start from and to refill to, so you know how much fuel each student used, since the gauges aren't really very accurate. And if that reference point is full tanks, you don't have much useful load left.
 
Trapper John said:
But to do that, you need some reference point in the tanks to start from and to refill to, so you know how much fuel each student used, since the gauges aren't really very accurate. And if that reference point is full tanks, you don't have much useful load left.
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True, but IIRC C150 tanks are easy to dip. A calibrated tube of some time will be close enough for government work, IMHO.

:dunno:
 
Trapper John said:
$50/hour dry for a 150 would translate to maybe $75 wet?
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Sorry -- missed the "dry" part. $50/hour dry would probably work OK. But there are other issues arising with renting dry, as discussed above, unless you can fill the tanks every time the plane is returned. At $4/gallon, "close" may not be close enough to make customers happy.
 
Me and my biz partner started a rental operation in 2006 with a Cherokee 180 and quickly added the flight training component....a Cessna 150. We were "hosted" by the FBO as they no longer wanted to be involved with renting/flight training. I mainly bought in to have the opportunity to instruct in my home town when there was no flight training at all going on. ..plus I liked having equity in something that could help with retirement. We rent our Cessna 150 at $71/hour and a PA28-180 @ 105/wet... and my partner leases his cherry Debonair @ $175/wet .Everything is about 15% profitable at this point. If I had it to do all over again I would have made damn sure to buy fresher engines on the planes we purchased. We had to overhaul both planes a year apart from each other....very painfull when you are still in the "getting established" phase of things. Per above..I also have an entirely separate career flying professionally and besides the dough I make when I personally when I flight instruct from time to time...I dont draw any penny off of the planes.

From my perspective Pro's /Cons'

Pros-
1. You are in the aircraft ownership club...you have planes to fly when you need them and if things go right someday they will be paid for..
2. You will meet amazing people and have a blast teaching them to fly
3. Some great tax advantages especially in the first 5 years
4. Discounts on parts...this is huge.
5. You have equity in something you are passionate about.


Cons-
1. People will be hard on your planes regardless of what you do...touch and goes themselves are hard on planes.
2. Bills that exceed what you built into the rate to cover them especially in the early days...these suck and they happen... so be ready for a capital call
3. Insurace is stupid expensive when you are small
4. Long periods of bad wx will destroy your revenue...can cause sleepless nights
5. Taxes...ugghh
6. This isn't really all that profitable..


My -Recommendations,

-Start with 1 nice clean plane...see how that goes...remember low time or very solid engine.
-Come up with a rate thats true cost + a percentage..
-Use instructors that give a darn...I let mine (contracted) charge whatever they want..and its all for them to keep.
-Rent wet...its much much much easier this way IMO
-Online Scheduling...increased our hours instantly.
-Find a maint. shop that is solid, reasonable, and understands your downtime needs. Our shop can routinely bang out a 100 hour in a day unless something is horribly wrong.
-Buy your own parts
- Analyze your hourly rate and see how its working out often.
- Know your customers,serve them well..keep your planes clean.
-Try not to take it personally when your plane has a maint. issue...it happens sometimes and hopefully not often.
 
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Ron Levy said:
I remember a joke my father used to tell about the store owner who was asked how he could make a profit at the low prices he had. "Well, it's true we lose money on every sale, but we make it up on volume." My suspicion is that if he rents that plane for $50/hr, he's going to have a negative cash flow, and you can't operate that way very long.
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once upon a time during the 90s, I bought 3 C-150s, of course I maintained them my self. The first one I bought was a 73M and during its life with me renters placed 9700 hours on it at 65 per. The second was a 74, and it lasted 4500 hours before a student left the runway with it and flipped it the insurance paied me 2000 more than I paid for it. the third was a 68, which I bought from a Navy surplus sale for 2775.77 and put 19k in to restoring it, and sold it to a friend for 25k, it now has 3500+

I rented them dry, it was full when you picked it up, it better be full when you put it away. the total cost to me during each 100 hour period was less than $100. Believe me the money ain't in the flying/teaching.
 
taters said:
-Try not to take it personally when your plane has a maint. issue...it happens sometimes and hopefully not often.
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You have way too much overhead..... :)

but thanks for keeping the folks working.
 
Tom-D said:
I rented them dry, it was full when you picked it up, it better be full when you put it away. the total cost to me during each 100 hour period was less than $100.
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I've heard these stories from you before, and it always turns out you left out the value of your time or omitted consideration of other costs involved. Given that it takes at least a day to do a 100-hour inspection on one of these, even if nothing is wrong at all, unless you work for like $5/hour you've seriously underrepresented the cost of flying these planes, even assuming nothing ever breaks or wears out. Heck, just the filter and oil cost at loeast $30 by themselves, and you've got at least two oil changes every 100 hours.
 
Tom-D said:
You have way too much overhead..... :)

but thanks for keeping the folks working.
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Clay has about as little overhead as you can get away with. Perhaps you meant schmookeeg.
 
Wow, I wasn't expecting such a great response so quickly. Just some quick background history on me. I used to work for the local FBO refueling, cleaning, and doing whatever other grunt work needed to be done. Anyway went to college got a job and eventually became general manager of high end auto detailing shop. Unfortunately, success went to the owner's head and he spent most of his time playing boss instead of being boss. Any who, left there about a month before it tanked and got a job I hate in corporate America. The benefits are it pays the bills and now I get all the Dilbert cartoons on a personal level.

As far as my competition goes there is the one FBO that rents C172's for $90/hr wet but currently has a 9.78/hr fuel surcharge. They mainly sell fuel and their aircraft fly only a few hours a month. I think this is more of a lack of advertising. Wilmington, NC has almost 100,000 people and there are almost 350,000 people within a 50 mile radius. So there is definitely a market.

Here are the numbers I've been working on tell me what you think.
$50 Rental per hour dry

Fixed Costs:
Financing Aircraft $600 month Temporary
Insurance $300 month
Tie-Down $65 month Not Hangered
Property Taxes $25 month

Operating Costs:
Fuel $n/a If I decide to go wet the price will flux with fuel costs
100 hr inspection $3/hr
Overhaul Savings Plan $12/hr
Maintenance $4/hr

$50 -$19(Operating Costs) = $31 hour

$990 (Fixed Costs) / $31 = 32 hours needed to break even.

I know I've left out a few things like marketing but I want to start slow.

I figure serious students will fly between 4 to 6 hours a week. Scheduling will be tight especially with 100 hr inspections but I think lower cost and stronger customer focus will help overcome this.

Appreciate any advice on my math or anything else.

Happy Flying,
David
 
You'll need a little bit of indoor space to use for pre- and post-flight briefings, student flight planning and the like. If you can be on friendly terms with an FBO that's not providing instruction, you might be able to get that for nothing.

Are you currently a CFI? Not that it really matters to me, but I really think one has to have a passion for teaching to be an effective instructor, and a successful operation.
 
I would triple that maintenance/inspection setback. Particularly if you're not doing the work yourself or are working without a friendly mechanic.

If you're paying shop rates, you can quintuple it :)
 
Trapper John said:
$50/hour dry for a 150 would translate to maybe $75 wet?

Anyway, I'm not sure how well renting a trainer dry would work out as a practical matter. Filling the tanks up after each student doesn't leave a lot of useful load left for the CFI and the student.
Click to expand...

I agree 50/dry is in the ball park, but I agree I think it is a better model to bill it wet. It is much easier logistically.

150/152's are going for $70-$75/hr wet here.

Brian
 
Hi David,

did you consider the useful load of a 150? Even if you are an average guy, you would not be able to take anybody much heavier than a slim lady with you. This might increase the fun of teaching, but decrease the number of potential students at the same time. :D
The same problem occurs when you want to rent the plane - few people will be able to legally fly it with two persons on board.
Therefore an old 172, PA28 or possibly something more classic like a Tri-Pacer might be the better choice.

Hughes Sky said:
[...] Financing Aircraft $600 month Temporary [...]
Click to expand...

Hmmmm... another $600 each month. Doesn't sound too comfortable to me.
Do you want to make a living with that business from the beginning on or do you plant to run it avocational?
Do you make enough money with your main job to sponsor the flight school business for a few month? If necessary even by 100%?
If you plan to run the business full time from the start, some seed money on the bank would come in handy. :yesnod:
 
1976 C 150M 3200 TT 280 SMOH $71Wet
I plan $ 11 hour for Annual/100 hour(all mine are annuals per IA sign off) + parts and another $5 /hour for unscheduled maintainance. $350/mo loan and $360/mo insurance ..but thats going down because my agent is about to be fired...found a way better insuance deal on my own..and its a company I used to work for so its not a joke..
 
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You like white or wheat?
 
Ron Levy said:
I've heard these stories from you before, and it always turns out you left out the value of your time or omitted consideration of other costs involved. Given that it takes at least a day to do a 100-hour inspection on one of these, even if nothing is wrong at all, unless you work for like $5/hour you've seriously underrepresented the cost of flying these planes, even assuming nothing ever breaks or wears out. Heck, just the filter and oil cost at loeast $30 by themselves, and you've got at least two oil changes every 100 hours.
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I was working a full time job at the time and did not take a wage from the aircraft.

But no, it wasn't all profit, there were parts to be paid for, and insurance, but for the most part it worked rather well. plus at the same time I restored 3 C-170s and preformed A&P services for other operators here at home port.

the 3 little 150s supported all my airport activities during that period, we didn't get rich but it was money I would not have had other wise.

My A&P-IA has made more money than 99% of the CFIs here. and certainly more than my Pilots certificate.
 
Hughes Sky said:
I figure serious students will fly between 4 to 6 hours a week.
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As a working person and a family man, I thought I hit my training pretty hard, and was lucky to get in 3 hours a week (plus all the study that goes with that 3 hours). If I were single, rich, or unemployed I could have probably done 6 or more, although if the latter I probably couldn't have paid for it. :D

I also know many "serious" students (i.e. committed to finishing) who could only afford (in time or money) one flight of an hour or so per week.

Just offering another perspective on the number of students it would take to fill your schedule.
 
Hughes Sky said:
As far as my competition goes there is the one FBO that rents C172's for $90/hr wet but currently has a 9.78/hr fuel surcharge. They mainly sell fuel and their aircraft fly only a few hours a month. I think this is more of a lack of advertising. Wilmington, NC has almost 100,000 people and there are almost 350,000 people within a 50 mile radius. So there is definitely a market.
Click to expand...

If they have aircraft sitting around not flying, I think you should cut a deal with them. Start your own flight school but use their planes. Once you're up and running, consider buying your own.
 
Rotor&Wing said:
Well considering you only have a Private certificate that's not saying much. :rolleyes:
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That's all I need to fly incidental to my job, but show me a CFI that is making as much as a full time A&P-IA.

OBTW, why do you attack me at every statement?

resentment because I've proved you wrong?
 
Tom-D said:
That's all I need to fly incidental to my job, but show me a CFI that is making as much as a full time A&P-IA.

OBTW, why do you attack me at every statement?

resentment because I've proved you wrong?
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Actually I do know some CFI's that make a very nice living and much more than most A&P's make. They just happen to be highly specialized in their area of expertise.
 
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Rotor&Wing said:
Actually I do know some CFI's that make a very nice living and much more than most A&P's make. They just happen to be highly specialized in their area of expertise.
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That's a rare bird, most CFI's are at 20-30 bucks per hour, or less, part time, most A&P-IAs are working 40-60 hours a week at 30-40 per hour plus bennies.
 
So I went down to the General Aviation part of my local airport and spoke with the head maintenance guy at Air Wilmington. The good news he said the with regular maintenance the aircraft should last a real long time with an overhaul being very rare. However, the bad news is the 100 hr will run about 1200 to 1800 ballpark. I didn't realize there was a difference between an FAA certified repair station and just being able to offering maintenance services.
 
schmookeeg said:
Hi David!

I run a "successful" FBO with a flight training component. I say it is successful because it does not lose money. I think this is the success metric which should be applied to any aviation business -- it is a hobby and fun thing for me to do, and I am in a unique career situation which allows me to run an operation like this.

We rent our C150 for 64 wet. It gets 60 hours per month. Insurance is in the range you mentioned. It breaks even.

We rent 5 C172s from an older F model (which is appx 5% profitable @ $79 wet) to a G1000 C172SP (which is appx 10% profitable @ $119 wet). Our C172s get appx 80 hours per month, with the record being 170 in a month. Our planes fly A LOT, and we have about 350 flyable days a year.

We rent an E33 Debonair dry @ $59 in our club, and a C182M @ $59 dry.

The profit figures above are gross aircraft numbers, and do not account for staff and rent overheads.

We are quite vertically integrated. We own a maintenance operation, a fuel farm, a flying club, and a pilot shop. We do enough business on-field with our engine builder and avionics techs to get good deals on their work.

Just pulling some numbers out of quickbooks should tell you what "comfortable" means for this sort of proposal :)

Last 12mo Gross Revenue: 1.4MM

Maintenance (our planes): 352k
Fuel (our planes): 297k
CFIs: 288k
Staff: 212k
Rent/Utilities/Upkeep: 127k
Insurance: 61k
Taxes/Fees/Govt: 34k

...you'll notice that's quite a lot of work to show 30 grand for the year :) It takes one unexpectedly blown motor to gobble most of that up. My capital investment is probably 600k at this point -- so I'm making 5% while investing 1200 hours per year or so. I don't draw a salary from the FBO.

We're coming off of a very difficult 12 mo, of course, and I'm very positive about the next 5 years -- but let's be real. I would NEVER try to feed my family on such a precarious business. I have cash reserves in the bank and an entire other career to lean on.

==

I'm writing this out to illustrate a point -- there is a critical mass that you need to attain before any of this becomes "break even" -- and I think having your own maintenance and fuel are significant portions of that. Additionally, we're in the Los Angeles suburbs, so we have an affluent and active pool of students to draw from -- we do very little advertising, and we bought an existing (albeit crummy) operation to build from/revamp.

I see a lot of single-plane CFIs try to make a go of it, and it's a very tough road. They can do it for a little while -- usually by being sneaky on insurance, or playing games with the 100hr requirement. A C150 can very easily generate a $3500 100-hr when the shop knows you're training in the airplane. They're going to cover their posterior much more than if you were just sole pilot.

I think it's a great thing to run as a retirement vehicle. It's absolutely the most fun I have on any day, every day that I'm at the airport. ...but I never look at it and go "today, I get to live comfortably as a result of these labors" -- in fact, I'm usually just watching where the next $20k bite out of our accounts is going to come from next.

So... retirement hobby, you bet, the best there is I think. Retirement business? Not by the traditional yardstick. :D

$0.02 (@ 5% ROI)

- Mike
Click to expand...

Wow this post was started 6 years ago! I was looking around for operating expenses for flight schools/FBO's and found this post. Very interesting figures. Amazes me that even on the "small" level, how cash intensive aviation business's are.
 
Zeldman said:
Aren't all businesses cash intensive?
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And, even more important than the intensive part, is the timing part.

Lots of profitable businesses fail because of cashflow timing.

Sometimes the cashflow is more important than the profit.
 
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