For many years, calculating the cost of owning an aircraft is one of the most frequently asked questions. There are many different cost factors that go into owning an aircraft. The purchase price is only one part of the total cost of the cake owned by the aircraft. Other parts include taxes, hangars or cost reductions, fuel, oil, insurance, ramp fees, engine stocks, regular maintenance, inspection items and subscriptions. The following article will help you determine what costs are associated with owning an aircraft and how to properly plan your finances. Keep in mind that the following article offers an overall estimate of how to calculate the cost of owning most reciprocating aircraft.
We will first divide the total cost of ownership into two sections; the first section will be an indirect cost and the second section a direct cost.
Indirect costs are costs that you pay regardless of whether the plane is flying or not. These costs include the cost of purchasing the aircraft (or monthly payments), insurance, inclusion fee or hangar, subscription fees, taxes and tax breaks.
Let’s start with the first indirect value I mentioned, the purchase price, or the cost of capital. This is one of the simplest calculations. If you are financing the aircraft, get a bank quote about the required down payment and interest rate. Currently, tariffs are around 6% with a minimum of 15% reduction and 20-year funding. For example, if you reduced the new DA40XLS by 20% to $ 350,000, your monthly payment will be $ 20,000 per month for 20 years.
To calculate insurance premiums, call your insurance agent and get an offer for the aircraft you are considering purchasing, tailored to your level.
Honorary fees and ties are your own. Call the airport or FBO where you want to base your plane and ask what options are available. There are usually about four options: tether (leaving your plane outside in the elements), cover (the plane is outside in the elements but has a shade of coverage), a general hangar (the plane is constantly moving in a large hangar that separates several other planes) and finally an individual or T hangar. Many airports have little space for a hangar, so don’t be surprised if you find yourself on a waiting list. Prices for Hangar vary depending on your location. My hangar in Concord, North Korea, costs a little north of $ 300 a month, while the same hangar in Fort Lauderdale will cost well over $ 1,000 a month. If you keep the plane outside, make sure it at least covered it. It will protect the interior and avionics. Also, keep in mind that some insurance companies will lower your premium if you are able to hang your plane rather than keep it from falling.
Subscription services may not apply to you. If you own a J-3 baby, you can move on to the next item. Virtually all aircraft manufactured in the early 1990s have IGF GPS. If you have an IFR GPS, you will need to subscribe to a monthly update so that your database is legal to navigate exclusively by GPS and take GPS approaches. If you have weather on XM, you’ll pay about $ 30 a month for a basic subscription or $ 50 a month for a full package. The wind feature on the full package is more than worth the extra cost. XM radio is optional. If you own a plane with a glass panel, you can choose Garmin safe taxi cards and / or approach services. Visit http://www.mygarmin.com for cost information. Jeppesen also offers suitable plates for glass aircraft cabins. This service requires an initial installation cost and a higher monthly payment compared to Garmin plate services.
Unfortunately, taxes do not disappear from aircraft, except for corporations that are exempt from taxes (for more information, see an aviation tax consultant). Taxes vary from state to state. In Florida, it’s 6% of the purchase price. In North Carolina, this is the only tax of $ 1,500. However, North Carolina levies a property tax that depends on the county and city. Where I live in North Carolina, the plane’s real estate tax rate is about 63 cents per $ 100, and my city tax is 42 cents per $ 100. If you use an aircraft for business, you may be able to depreciate the use and cost of the aircraft, which benefits your estimated cost of ownership. Please consult a tax aviation specialist to determine your individual situation.
Direct operating costs
Calculating direct operating costs is a bit trickier. There are different ways to calculate what each hour of flight will cost. My method is just one method, but it works. Here you need to determine how many hours you plan to fly per year to set an annual base budget.
Let’s start with the basics. Most reciprocating engines will require an oil change every 50 hours. Depending on where you live, a regular oil change will cost $ 150 to $ 300. Call a local machine operator in the field and find out what he is charging. If you plan to fly 100 hours a year, the math is simple.
Fuel consumption varies by aircraft. You can usually go to the manufacturer’s website or contact the POH to get a cruise fuel. If you fly an aircraft with a worn out engine, consider that published fuel combustion is the best case scenario (which is often not the case). Find out how much augos cost at your local airport, and do some math. Keep in mind, gas prices are changing
Stocks of engines and propellers are taken into account in the equation, even if you own little time or a new aircraft that you plan to sell long before the overhaul. Normally you can get an offer from your local FAA engine repair station for an engine overhaul or for a factory-installed engine. Take this price and divide it by the hours left before TBO and you will get an idea of how much you need to set aside each hour. If you plan to buy twins, double the cost of fuel, engine and propeller.
Scheduled maintenance is another cost to plan. Every year your plane will come for inspection. Again, prices will vary depending on where you do the review. Store prices in South Florida average $ 95 / hour, while in North Carolina they are around $ 70 / hour. Call a service center familiar with your aircraft and see what they charge for a regular annual inspection. Keep in mind that the price they quote you does not include subcutaneous viewing items, suitability instructions, newsletters, or replacement adjustment items. This is an additional cost. If your plane is still under warranty, then don’t expect any repair bills if you lift the plane. A safe rate for budgeting additional aircraft costs outside the warranty is to double the cost of the annual inspection fee; this budgeting will cover almost all the unexpected surprises that can happen during the year. You can also consider a reserve for upgrading paint, interior and avionics, and in this case you will want to remove a little extra.
Finally, you will need to determine what the cost of your aircraft will be when and when it comes time to sell it. Usually aircraft stop depreciating after 5 years. As with machines, their depreciation varies. Companies like Vref and Aircraft Bluebook offer retail and trade prices.