Tuesday, October 6, 2009
Light-Sport Chronicles: Matchmaking...For Pilots
The truth shall set you free: How to afford an LSA
The glitch lies in our old-fashioned perceptions. We believe we can’t afford to fly because we can’t afford to finance a plane on our own, though we still can afford power-sports vehicles, such as boats.
But Kruger’s research told him we can afford to own and fly. We’re just looking at it all cockeyed. In a “white paper,” he wrote: “The primary usage constraint on all types of recreation vehicles is available recreation time—not cost [my emphasis]. The vast majority of power-sports buyers are still in the workforce. Recreational usage is constrained to evenings, weekends, holidays and vacations....average annual hours of power-sports vehicles and personal use aircraft is equivalent—on average...about 50 to 100 hours per year.”
He reasoned that if folks could wrap their heads around hourly cost—not purchase price—as the true grail indicator of personal flight’s eminent affordability, then GA sales, and the flying community infrastructure, would resurge: “The U.S. power-sports market ($44 billion yearly) is...60 times the size of the U.S. piston-engine aircraft market. To make volume sales of aircraft to the power-sports market, the average purchase price must be reduced to a range of $5,000 to $50,000.”
Here’s a key point: “Aircraft mean ownership and operating costs, i.e., fuel, oil, maintenance, storage, finance and insurance...are remarkably similar to [those of] power sports...[which are also] $50 to $150 per hour.”
Consider this: Putting 50 to 100 hours per year on your boat/plane/Jet Ski means that vehicle remains unused for 8,650 hours! All that expense and hassle just to say, “It’s mine!” and your poor boat/bike/airplane sits alone in the dark most of the time? Gotta be a better way. And here’s Kruger’s: shared ownership.
He’s urging us to do what we do best: adapt—to get over our national addiction to personal ownership, exotic financing schemes and mostly unused vehicles.
Hasn’t the economic collapse this past year put the kibosh on the “have it your way” mentality? When did our once-great American sense of communal experience become so “last week”?
Taking action, Kruger created a kind of dating service for people willing to share an aircraft and have all the loose ends tied up for them. The result was The Aircraft Partnership Association (www.theapa.com), a web-based matchmaker service that’s sort of like eHarmony—for pilots.
“It’s a simple two-step approach,” says Kruger. “We help you find partners, then provide you the means to administer shared ownership. We designed in 29 dimensions of compatibility. We ask, ‘What would you like to own, what’s your budget, how many partners and what kind of maintenance setup do you want?’”
Members who join the (free) service can create private, limited, cooperative, fractional and equity flying clubs, and other partnership styles.
“APA is as applicable for a first-time LSA buyer as for a longtime owner who wants to trade up to a Cessna Mustang jet,” explains Kruger. He puts it simply: “We all need other people.”
Paradigm shifts come when enough people realize an idea’s time has come. Shared ownership, just like time-share real estate, could very well be the paradigm that revitalizes general aviation.
Homo aviens adaptavus, rise! Why not meet the challenge of mounting flight costs by gathering new flying friends and creating new communities? “Cultures change from the inside out,” asserts Kruger. “The more quickly the current GA community refines the means and methods of shared ownership, the sooner we can use the lessons learned to make sales to the untapped power-sports market.”
Capitalism, and the Internet, have taught us this: The more people get involved with something, the cheaper each unit of involvement gets. Sell more airplanes, share costs with partners and spend less all around.
And you don’t need to be Stephen Hawking to realize that when viable partnerships come to aircraft dealers with all the details worked out, then qualifying for loans will be no more challenging than it is for single buyers. Pooled resources equals legitimate buying power.
Kruger calls it network effect. “Metcalfe’s Law says, ‘The power of a network increases in proportion to the square of the number of nodes on the network.’” Nodes means pilots: The more pilots participating, the more sales potential increases—exponentially.
Also, according to Say’s Law, “Supply creates its own demand.”
Here’s Kruger’s “ah-ha!” moment in a nutshell: The supply commodity that’s been lacking for GA is therefore not low-cost aircraft, but rather the knowledge that shared aircraft ownership makes flying as affordable as other traditional power sports. “Once we educate the market, sales of aircraft will follow,” he notes.
Bill Boczany, an APA member, shared his ownership experience: “In January, I put up flyers at local airports for partners to buy an LSA. Not one bite! Then I saw APA’s ad, signed up online and soon heard from Jim Graham and Rob Dean, other members looking for an airplane. We put together a budget and operating rules for the partnership, and got a great deal on a Tecnam Sierra. The critical thing for success is partner, partner, partner. APA made it like finding a great date. Everything was worked out, from hangar logs to the right insurance.”
Folks, it’s time to dream again of owning an airplane. The culture of personal flight need not die out. Let’s get mom, pop and the kids back flying. Let’s join hands and make new flying communities across the land.
Next time, we’ll look at Eldon Corry’s Lets Fly (www.letsfly.org), an intriguing, completely turnkey approach that builds on proven real-estate models.
Page 2 of 2