Tuesday, February 21, 2012
Co-Own A Plane!
With aircraft ownership costs skyrocketing, finding a partner could keep you flying
An LLC provides some liability protection. In an LLC scenario, an aircraft is owned by the company, and each member owns a share of the corporation. State fees and a tax return are due, but individual members report their share of profits or losses on their own tax returns. There also are requirements for annual meetings, complete with minutes and documentation. Individual members are usually named as officers in the company. LLCs are governed by state laws, as well, and should be researched carefully.
For most pilots without deep pockets, the simple co-ownership works best. These usually consist of 10 or less members and share one or more aircraft. The simplest scenario is co-ownership of a single aircraft with somewhere between two and eight pilots. These partnerships are easy to understand and run, and plainly show the advantages of owning an aircraft with several people.
There are so many beneficial aspects of co-ownership that it amazes me how all pilots aren't clamoring for a share in something that flies. Those, like myself, who are in partnerships feel they're one of aviation's best-kept secrets. We thought we'd tell you a little about actual partnerships and how they work in the real world.
Jessica Meredith has only been a private pilot for several months. With the ink on her certificate still wet and about 80 hours in her logbook, she discovered a low-key co-ownership deal on a 1979 Citabria. "I had gotten the flying bug and couldn't stop," laughs Meredith. "I thought the Citabria would be a great airplane to improve my flying skills."
The airplane was owned by four individuals who hardly flew the airplane. "Most of them had other airplanes," Meredith says, "so the Citabria sat for long periods." One of the owners had left, so the group was looking for a new fourth partner. Meredith stepped right in. An elementary-school teacher and a high-school rowing coach in her working life, Meredith was attracted by the idea of flying a more challenging aircraft than what was available at the local FBOs. She also wanted the chance to learn more about the airplane and the low cost of flying within a partnership. "It was much less expensive than renting," she adds.
The group is very low-tech, like many successful partnerships. For scheduling the Citabria, "We just text each other," Meredith laughs. She likes to fly on weekdays, which is the opposite of when the other members fly, if they fly it at all. Meredith has discovered that most of the time she has the airplane to herself.
Meredith enjoys working on the airplane with the mechanic—she's the only partner who does. In doing so, she has discovered one of the hidden benefits of helping to turn the wrenches on a co-owned airplane: You get to know the airplane better than anybody else. Pilots who help with maintenance know the condition of each screw, the location of each leak and the condition of all the parts under the cowling. Meredith agrees there's no better education in aviation. "I love to work on the plane! I really get to know it better," she says.
Of course, cost is the biggest benefit. Any aircraft owner can cut their costs by 50% by adding just one co-owner. And the savings go on from there depending on the number of partners. In both Meredith's and my case, that means huge savings when big maintenance bills come.
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Labels: Buyer's Guide, Features, People and Places, Pilot Guide, Pilot Resources, Fractional Ownership, Ownership, Best Buys, Aircraft Partnership, Partnership, Aircraft Ownership