Tuesday, April 1, 2008
$1,000 Per Month Airplane
An affordable way to own
$500 Per Month?” article [October 2007] was so overwhelming, we decided to take the idea to the next level. " />
Someday, we’ll reach senior status. Will we really care about how much money we had in the bank years earlier? Or, will we lovingly remember being behind the controls of our very own airplane?
Every airplane owner will fondly tell you having your own plane pays dividends for the soul far beyond what you can get from a mutual fund.
$1,000 per month buys a very decent used cross-country machine that’s all yours. $1,000 per month with partners buys a brand-new airplane with supple leather upholstery and incredible state-of-the-art avionics that Walter Beech or Clyde Cessna could never have imagined.
You’ve seen them, you’ve read about them, you know you want one. New or used, with super-easy financing, all-time low interest rates, spectacular avionics packages and only $1,000 a month—what’s keeping you?
For more advice, tips and info about owning your own airplane, visit www.planeandpilotmag.com/aircraft/ownership.
|Meet Your Ownership Needs|
| Buying an airplane has never been easier. Credit is readily available, interest rates are low and terms are favorable. Obviously, a new airplane is different than a 20- or 30-year-old airplane, and there have never been so many options for a buyer on how to buy an airplane. There’s a new airplane, a great loan and an ownership program to fit any pilot’s needs. |
Fractional Ownership: The fractional idea first surfaced in the 1960s in small, regionalized programs for new corporate airplanes. It really took off in the early 1990s, bringing a whole new group of people into successful private-jet ownership. Following the model of the corporate-jet programs, several successful general aviation fractional-ownership programs have been introduced in recent years.
A few of the most popular fractional programs are AirShares Elite, OurPlane and PlaneSmart! In AirShares Elite (www.airshareselite.com) owners hold title to an eighth of a new or near-new Cirrus. Costs run about $51,250, with about $870 per month for management/maintenance fees and a $105 hourly fee. AirShares Elite offers financing for its SR22 ownership shares for about $580 per month, with 15% down (subject to approval of your credit).
OurPlane (www.ourplane.com) offers financing on a new Cirrus or Cessna 182. An eighth OurPlane share runs about $55,000 to $80,000 for a brand-new Cirrus or about $44,000 to $70,000 for a new Cessna 182. OurPlane also will be offering fractional shares in the new Eclipse 500 VLJ.
And with PlaneSmart! (www.planesmart.com), an eighth share in a new Cirrus SR22-G3 will cost $75,900, with an $897 monthly management fee and an hourly usage fee of $125.
The variable cost of each program depends on your location and how many annual hours you sign up for. These programs offer a high level of customer support, scheduling, aircraft handling and all maintenance, insurance and inspection costs.
For owners who hate maintenance surprises, dealing with hangar leases, FBOs and all the little details that sole ownership involve, fractional programs effectively streamline the ownership experience and provide a known cost structure for aircraft ownership.
Another innovative program is iFly (www.iflysmarter.com), available in Southern California. Its entry costs are the least expensive ($39,900 for five years access to a Columbia 350). The company provides the same concierge approach to aircraft operations and maintenance, but you don’t own anything. It’s more like a gym membership or a country-club social membership. It may be the least expensive way to get guaranteed access to a state-of-the-art, near-new airplane, but you have no residual value after five years.
Cirrus Shares: Cirrus Design (www.cirrusdesign.com) offers an innovative alternative to fractional ownership with its “Cirrus Shares” program. This program is ideal for owners who understand and enjoy the day-to-day handling and operation of the airplane. There’s no monthly management fee, but there are none of the concierge services provided by the fractional guys. Maintenance responsibility, hangar fees, scheduling and all other costs are totally up to the partners.
Cirrus will finance each share of the airplane and acts more as a “matchmaker” to help introduce prospective owners to each other. Cirrus uses its extensive marketing efforts and databases of prospective buyers to help bring potential partners together. If you’re in an outlying area without a fractional provider, Cirrus’ expertise and broad knowledge can help put together an ownership group in your area for a new SR20 or SR22.
Leasing: With general aviation airplanes, leasing has never really caught on. While there are numerous programs to lease corporate jets, most general aviation pilots prefer to actually purchase and receive the favorable tax treatment of owning versus leasing. For some risk-averse individuals, people who don’t want to have their name on the title of an airplane or pilots who only need a specific airplane for a specific period of time, leases can be custom-structured on most general aviation airplanes.
The best way to structure a lease is through the selling dealer or FBO. Unlike the automotive world, each general aviation lease customer will have unique expectations of use and maintenance responsibilities, so a “one-lease-fits-all” instrument doesn’t exist. If leasing is the best method of aircraft ownership for you, approach a knowledgeable FBO or dealer and spell out the terms you need. The risk of residual value will be retained by the FBO or dealer, so expect to pay a bit more for the extra work and risk that the dealer takes.
The Plane & Pilot Challenge: Do you want a new, state-of-the-art airplane, but not 100% of the costs? Investigate which of the many options are available and which ones fit your budget, your location and your annual flying needs.
Can’t find a fractional provider in your area? Be creative. Ask the different fractional services to help you create an ownership group in your town. Or, you can assemble a group of like-minded aviators, assign the duties among members of your group and your FBO, buy a great airplane and start flying.
At Plane & Pilot, we’d love to hear about new and innovative methods that are actually working and allow people to experience the joy of owning and flying their very own airplane. Log on to www.planeandpilotmag.com to share your thoughts.
Pick a program, or create a group and start flying the airplane of your dreams.
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