On the surface, co-owning an aircraft just makes sense. Most airworthy privately-owned light singles fly less than 100 hours a year-in many cases far less. Regular use is better for the aircraft and better for amortizing the fixed costs (hangar, insurance, databases) per hour of flight. More users should mean more bang for everyones buck. Unfortunately, several owners also mean more opportunities for conflicts in time, resources, flying style, opinion and even personality. Being connected to anyone by your checkbook can put a strain on the best relationship. There’s no magic formula for creating the right partnership. But our survey results hit the same key points with metronome-like regularity: Good partnerships have clear expectations between partners of similar economic standing, and they have written rules or bylaws to settle disputes.
Equally Deep Pockets
The prevalence of comments like, “Our partnership has worked we’ll for so long because we have similar financial resources,” was a surprise to us at first, but it shouldnt have been. There are three big problems with unbalanced discretionary income among partners. The first is for maintenance and upgrades.
For example, if two partners are hard IFR fliers and want an approach-certified WAAS GPS and the third isn’t even instrument rated, there is often a conflict. Partnerships can weather such issues when the VFR pilot sees a payback. That might be as undefined as knowing the aircraft will be used more, or as concrete as a trade for the low-time pilots impact on the shared cost of insurance.
We saw several examples of upgrades where one or a few of the aircraft partners shouldered the whole cost because they felt passionate about the need. One of these was a $27,000 avionics upgrade-not exactly chump change. Other partnerships ended because of unresolved differences in what an airplane “needed.” Similar comments came up about maintenance-all members must have the same philosophy, be it “fix it now” or “shop on eBay.”
The second issue is that each partner must be able to comfortably afford the dues and fixed costs. “The most damaging thing would be a partner that is stretching himself to make the payments,” one respondent told us. “A bad partnership is one thing, but having to sell the plane or find another partner quickly is worse.”
The third facet to the economic resources issue is that few of the partnerships we heard about built a full reserve cost into the hourly rate for their airplane. While this may seem foolish, in a partnership of a few members, there’s a reasonable logic. Money put into a reserve fund typically wont make as much profit for the individuals and certainly isn’t available as liquid cash. The partnership may not last or may move to a different aircraft before a major engine or airframe bill comes in.
One part-owner in a late-model Seneca added this point about not collecting for an engine overhaul: “To do so would break a psychological barrier for us of paying more than $200 an hour for flying or more than $1000 per month in fixed expense.”
If that sounds like a bit of self-delusion to make flying seem cheaper, well, maybe it is. Few partnerships volunteered hard numbers for their real, per-hour costs and many admitted they didnt know and didnt want to. Of the few we did see, dividing their reported hours flown by their reported costs showed rates that might be higher than youd expect with a partnership: $230/hour for a Beech Bonanza, $170/hour for a Cirrus SR20, $150-$125/hour for an older Cessna 172. In none of these cases was there a set aside for engine replacement or major upgrades.
Of course, we did hear of some real deals, like the nine pilots in an Aeronca Champ who each chip in $25/month and $25/hour wet. A similar group, at a fly-in community, shares a Piper J3 who split insurance and other costs as they come up. The often