Group Ownership

Many people think that group ownership of an aircraft is a panacea. They look at straight rental rates (say £GBP165 per hour for an Arrow) and compare it to rates for group ownership of £GBP70 – 75 per hour and decide ‘that’s a no-brainer’. Of course that is not the whole story by any means, and I don’t suppose anyone considering buying into a group thinks that is all there is to it either.

On top of the hourly charge, there is typically the fixed monthly charge per member (say £GBP130 for a six man group) and of course the up front buy-in costs (usually a proportion of the value of the aircraft plus money in the bank for the group for accruals for engine funds etc.). OK – most people reckon that between 25 and 35 hours per year is the ‘break-even’ point between renting and group ownership. That said, some may still buy into a group below these hours purely to escape the tyranny of rental timeslots and minimum hours per day.

On top of that of course are the unexpected bills that cannot easily be budgeted for, although you will only pay 1/n th of course, such as vacuum pump failures, replacement cylinders (ouch!) etc. Don't underestimate these or assume that they happen to someone else's plane but not yours!

But over and above all of this is the nature of the group itself. How is it structured? What is the method and proof of ownership? Do you all gel as a group? Are you all happy with the charging structure? What happens when some of the members interest in flying wanes and the monthlies become the significant charge?

The reason I mention this is because regardless of the hard money facts, the ‘soft stuff’ is as, if not more important.

I have recently experienced an example of the above, where I felt compelled to sell my share as the majority of the group were about to vote for an expansion of the group numbers – where I was outvoted. Let’s be very clear, I am not bitter, just disappointed. I really liked the Arrow and the group was going OK. Two of the member had shares for sale (which is a bit worrying and ‘de-stabilising’ in itself). Both for perfectly valid personal reasons - you know, just one of those coincidences.

The group was approached by three individuals who were looking to buy a share of their own at the same airfield, also in an Arrow or similar. Not unreasonably, they approached our group and asked if there may be a third share for sale now or in the near future and if so, they would be interested to buy in ‘en-bloc’. The caveat was that all three wanted to buy in at the same time or not at all. If there wasn’t a third share, then fair enough, they would continue to look their own aircraft.

Well, no one else wanted to sell, so we had a group meeting with a motion to expand the group from six to seven. Personally, I find 1/6th to be an ‘absolute maximum’ for me. I would happily vote for a reduction as I have some ambitious touring plans and am happy to ‘pay’ for good availability – after all, the plane is for fun, it is not a business asset which must be ‘sweated’. However, I was in a minority of one, so rather than agree to a reduced share, I offered my own share for sale as it was clear to me that the group were going in one direction and I was going in the other.

All very amicable, but as I say, disappointing. Now there may or may not be a huge difference between 6 and 7 members. I was simply going on my own instincts and ‘gut feel’ – which I have learned to trust over the years. Availability for our group of six has been excellent, but I feel this is only because the two members selling their shares flew it very little in one case and not at all in the other. It was going to be a bit of a ‘feeding frenzy’ with six active members, let alone a seventh – hence my rationale and my decision.

Anyway, I got a reasonable price (not what I paid, but not too far short) and the new members got a good deal.

I write this as an experience that other may read and understand that there is more to a group than simple financials.

Now on the look out for a group at or near Gloucester (maybe also Kemble, Croft Farm, Bidford?) with a decent touring aircraft and a group size of between 1/4 to 1/6 maximum.

If anyone knows of a group of 4 with a four seat touring aircraft that does 150 kts on Jet A1 at 25 litres per hour with a per hour charge of £GBP50 and monthlies of £GBP100 and endurance of 5 hours then I am your man – no aircraft around like that? What a surprise!! Guess I’ll have to compromise somewhere!!