Can you make money on a flight school leaseback? Use the airplane leaseback calculator/spreadsheet below to project what it takes for you to make money, break even or defray the cost of airplane ownership by putting your airplane to work. If you are not familiar with GA airplane leasebacks I recommend watching the video at the bottom of the page.
The spreadsheet below is an embedded XLS. Enter your costs of aircraft ownership and operation in the top section, light green. Enter your rental parameters in the dark green cells below. (Best viewed on a tablet or larger.)
2. I changed some terminology and formatting for clarity (definitions below).
3. Added a table comparing flight school, club and partnership use cases. Down the page.
Definitions
I go into much more detail about leaseback viability in the video but here’s a knee board version the basics.
Flight Days/Mo: The number of flyable rental days as a factor of weather, maintenance, and any other reasons the airplane is not available. This figure changes the Flt Hours/Day to give you an idea of the daily hours associated with X flyable (rentable) days. The editable Hours/Mo column drives the financial numbers on the spreadsheet.
Target Rental Hours: The online consensus seems to be that a typical training plane needs to fly 50 hours per month to break even. I called this “Base Hours” in the video and earlier version of the spreadsheet.
BE Gap (Called Owner Net/mo in the video): Your dollar distance from breakeven. For example, if it’s -$1,000 then you are not losing that amount per month; you are $1,000 from breaking even.
Tach/Hobbs: The ratio of engine time to clock time. Engine overhauls are based on tachometer hours, which are a factor of engine RPM. Billable flight hours are usually pegged to the Hobbs meter, which is just a clock. Because of idling, taxiing, cruise power, etc., the tachometer accrues time more slowly than the Hobbs.
Percentage versus Fixed Fee leaseback: Which model you and the flight school or club agree on is a matter of negotiation and market conditions. Owners do better with the fixed fee model.
Scenario: The breakeven rental rate when you opened this page was $148.79 using the percentage leaseback model. If your airplane rents for $160/hr and flew 50 hours you made $449. But you want a panel upgrade that will cost $25,000. Your CPA says you can write that off over 5 years (I am making that up, verify with your CPA). You enter $5,000 in the Upgrades field and see the BE rental rate is now $159.20.
Mindset map. My personal opinion as a former airplane owner. Defraying the cost of aircraft ownership.
| Flight School | Club | Partnership | |
|---|---|---|---|
| Wear and tear | Most – student pilots | Less. More rental driven than training driven. | Lowest. |
| Airplane emotional attachment | Just a business asset | I see her occasionally but… | Our baby |
| Benefits | Higher utilization – revenue | Better mix of pilots Set your own pilot standards Less wear and tear, depending on club size |
Airplane treated well Costs shared Probably hangared |
| Downsides | Wear and tear Highest operating costs Usually not hangared |
More involvement in managing the airplane Fewer clubs than there are schools Commercial insurance required |
Exiting the partnership Filling the vacancy Perhaps some partner friction on expensive upgrades |