Tuesday, November 3, 2009
LSA Ownership—Condo Style!
Low down payment, affordable monthly installments, zero hassle: sound familiar?
THE CO-OWNERSHIP EXPERIENCE. LetsFly takes care of all the hassles of ownership (such as maintenance, insurance and hangar fees) and helps set up pilots in aircraft cooperatives.
Kruger made a compelling case for shared ownership. While most pilots think they can’t own a plane due to the high initial cost, Kruger’s research shows that we should focus on total hourly cost of operation, which, at $50 to $150, is about the same as hourly costs for boats or other motorsport vehicles.
When you consider that most of us only do our boat/ski/plane thing on weekends and holidays, those very vehicles we’re obsessed with owning end up shivering in the boathouse/garage/hangar 98% of the time!
Partnerships can be challenging to get right, but what if you could co-own an airplane and have all the hassles—from initial purchase to final sale (including all the maintenance, insurance, hangar fees and whatnot)—managed by someone else? And what if you still got as much personal air time as if you owned the airplane all by yourself?
Eldon Corry bills LetsFly (www.letsfly.org) as an “international aircraft cooperative,” and he’s helping set up aircraft cooperatives with figures that will get your juices flowing:
• Initial investment: $2,900
• Flight time: $30 per hour
• Total monthly payment: $400
• All maintenance, storage, annuals and other fixed costs included
• Positive cash flow potential
Imagine: no insurance payments to remember, no maintenance scheduling, no inspections, no coughing up extra to pay for overhauls. This is a turnkey deal, like buying a condo in a quadplex. You make monthly payments, and the landlord takes care of everything, right down to edging the lawn. Dude...I’m in!
LetsFly started a decade ago. “I got out of general aviation for a while and flew for the airlines,” Corry says. “By the time my kids were ready to learn to fly, many flight schools had gone under in our area. I knew several people who wanted to learn to fly but lacked access to aircraft, so I shared out three airplanes.”
While fine-tuning the process, Corry asked himself: “Why not build a system for affordable flying that will work anywhere? Why can’t we put mom and pop back in the air?”
Using the three planes already in shared ownership as a test bed, he enlisted Mark Teal, a senior software engineer for NetJets, to develop a turnkey automated package that would run the entire program.
“We provide the tools and expertise for people to invest in and run their own cooperative,” explains Corry. “Additionally, we provide or facilitate financing to help cooperatives get started.”
LetsFly’s members have two prime ways to go: as owner/managers (i.e., landlords) of an airplane, or as co-op members (condo buyers) who own 1⁄4 shares in an airplane.
Corry has confidence in his brainchild: “We guarantee this—if anybody shows us a company with a more economical way to own and fly an airplane, we’ll give them $10,000! Banks are still stingy with money, so when we see a good area and investor to start a cooperative with, once they can qualify for the aircraft’s primary financing, we’ll come in with secondary financing.”
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Labels: Aircraft Bargains, Columns, Features, Journeys, LSAs, People and Places, Fractional Ownership, Ownership, Pilot Talk, Aircraft Partnership, Partnership