Critical Mass for Small Airplane Shared Ownership?

As a born optimist and and early adopter, the idea of sharing small airplanes in innovative ways has been attractive to me since I started flying lessons back in the 70s. As it turned out, the idea had been around even longer than that. In the 60s, companies toyed with the idea of having fleets of identically equipped light singles scattered around the country for member pilots to use wherever they went.

It was an abject failure. And other, similarly styled plans have augered in in similarly spectacular ways.

There are other ways to share airplanes, including good old partnerships. The one I was in for two years was a train wreck. Not that the guys in the partnership were bad guys. It's just that together, we were bad partners. If I had to guess, I'd say that the odds of success in airplane partnerships are similar to teen weddings of pop singers. And there's about as much drama associated with them, too.

Over the past seven or eight years there have emerged a few small- airplane shared ownership programs that have given a certain class of would-be airplane owners a chance to get into a new airplane for pennies on the dollar.

The pioneers, Airshares Elite and OurPlane, styled their plans quite differerently, but the central ideas are the same: you buy or lease a part of an airplane and the company takes care of it for you. You fly it when you want, given the hourly limitations of your share size, of course--a one-eighth share typically gets you around 75 hours of flying time a year. You don't just pay for your share: you also pay a monthly fee for the company to do its thing (expensive but worth it) and an hourly fee for flying the airplane (adjusted for fuel prices and getting more expensive all the time).

I lease a share with a Texas based company, PlaneSmart, that operates late-model Cirrus airplanes, SR22 G3s Turbos and SR20s. It's a a top drawer operation and, like the others, the cost is not cheap. Though this is the important part: it's like flying for free compared to owning an entire airplane. 

And airplanes, in case you haven't noticed, are more expensive than ever. A top-end Cessna 400 goes for $620,000. The new Garmin flat-panel equipped Cirrus goes for nearly as much. And Beech isn't giving away A-36 Bonanzas last time I checked, either.

For would be pilot/owners of high-performance airplanes who have the cash it's an amazing amount of capability they get. For those whose budget is less, you're looking at buying used or downscaling your performance expectations.

It's for that kind of buyer exactly, the guy who wants a new high-performance airplane but who can't afford (or doesn't need the whole thing) that these plans make sense.

There are a number of legitimate and not-so-legitimate concerns that prospective buyers have--in fact, the shared ownership guys can probably recite these concerns in their sleep.

Here they are with my answers, based on my experience.

Concern: It costs too much.

Reality: Compared to what? Does it cost too much compared with buying a 30 year-old used airplane with a mid-time engine and outdated avionics? If you're comparing it to used, you're barking up the wrong tree. If you're comparing it to a new airplane, it doesn't cost too much. It costs very little. Moreover, you get the airplane taken care of for you! I can tell you from experience, that is huge.

Concern: I won't get to fly my airplane enough.

Reality: Well, that might be true, if you really do fly your airplane a lot. If you have a track record of flying more than a couple of hundred hours a year, you might want to get your own airplane. If you just think you're going to be flying it that much, you're probably being optimistic. Go with shared ownership and upgrade your share to a quarter if you really need to.

Concern: I live away from a place where they offer shared ownership.

Reality: Call them up and make a pitch. Maybe it's an area where they've been looking to expand. If not, you're probably out of luck. The current model only works for centralized operations.

Concern: The other pilots aren't going to take care of the airplane the way I do.

Reality: In my five years of flying with three different shared ownership operations, I've found that the pilot I most need to worry about is me. The airplanes stay in excellent condition.

Concern: I'll miss having my own airplane.

Reality: Make believe it is! Nobody will ever know.

Concern: How viable is the company I'm signing on with? If it goes belly up, what do I do?

Reality: Check things out and find out what your prospective company's track record is. Are the owners generally satisfied? Has there been a stable record of growth? What does your contact say about your share? Do you own it--if you do, you're probably protected should a bankruptcy occur, which, to our knowledge hasn't happened. Moreover, the shared ownership industry has gradually getting stronger and stronger.

Concern: I'm not a pilot yet.

Reality: Most of the shared ownership companies have programs designed to get low- or no-time pilots into the cockpit and get them up to speed with professional training and real world experience. Give them a call.

If I sould a little enthusiastic, you'll have to forgive me. The shared ownership experience has been almost without exception a very positive one for me. And looking down the airways a bit, we can all see that we need new and innovative ways to get more pilots into more new airplanes. Professionally managed shared ownership is the best approach out there for managing costs and maximizing utility, and it seems as though it might be finally coming of age. Which would be a good thing for everybody, pilots, airplane makers and the rest of the industry.

If you're interested, you can find out more information, including where these programs are offered, by checking out the companies websites.

For more info and perspective, check out some of my past articles in Flying.

Comments

[Jack]

So... how much does it actually cost? That info is remarkably absent from the websites you cited. (Clearly it depends, but a list of costs for one example would be enlightening.)

[Mark from Buy Used Airplanes]

Hi,

I think this is an really interesting and affordable way to own an aircraft. With rising fuel prices and the cost of aircraft growing fast, would be aircraft owners surely have to consider this as an option. There is a precedence in other industries, for example time sharing on holidays or pooling together to buy an investment property. Why not take the same principle to the ownership of aircraft? Thanks for a timely and thought provoking article.

[B. Schmidt, Ph.D.]

The sticky point for me, at least when I checked into Air Shares Elite (shared ownership of late model Cirrus) was that the planes get sold after 5 years (with an overhauled engine) and replaced with new ones. This guarantees that the owners will always be behind the depreciation curve, and every five years the cost is thus guaranteed to rise just based upon purchase price alone. When I asked why they simply didn't overhaul the engine and hold on to the plane long enough for inflation to "catch up" with depreciation, their answer as "our customers want new airplanes". Well, if you can afford that that is great, but I can't. It would be great to have a brand new Cirrus instead of my (wholly-owned) Cessna 172, but at that cost (and their inflated "management fee", on top of an hourly charge to fly my own (partially-own anyway) airplane) I would probably consider a traditional partnership before that type of fractional ownership.

[German]

I've dreamt of flying all my life but in my country the price of airplanes has been astronomic, at least it was. With the arrival of LSA and the possibility of buiding your own, things are looking brighter for me. I´ve talked to many of my friends about my project an they are amazed at the fact that with the money you buy a car you could be buying a personal airplane, not as comfortable and smart as the ones we are used to see (Cesna's, Piper's, etc) but still an airplane to go around on weekends and vacations.

Perhaps the thing is how and to whom are we selling the story, I like very much the promotion EAA is doing with kids.

[Mike d.]

While this idea is definitely cheaper than owning (depending upon the airplane,) the associated costs are still way out of reach for most GA pilots.

Also, the comments written by Dr. Schmidt are cogent and precise.
Fractional shares in GA is a last hurrah in a dying industry.

[Nick]

This type of ownership is a great concept, but I would like to see it applied to more affordable airframes. The cost of a Cirrus, for example, is far to great for most GA pilots to enjoy them. Bring out some used but rebuilt 172s. That would allow more people to get into flying. Everyone talks about finding more ways to get more people in the skies...that's easy, make it affordable!

[Kent]

GA truly is a dying industry. I grew up in and around airplanes, my father being a career flyer. I've had 'the bug' for my entire life, yet today I find it virtually impossible to afford traditional flying even at a club level since getting my private nearly 20 years ago. I'm a professional engineer, well to do by most standards, so I can't see how flying is even remotely possible for the masses.

My answer: build my own. Take a Vans RV-8 kit, add $50k over four or five years, throw in 1500-1800 hours of part time labour, and walk away with a 200mph 800sm-range aerobatic traveler. Cheap? Not remotely. Attainable? You bet, with some sacrifice and effort.

[Michael McMahon]

My father and I are almost finished building a Lancair ES, essentially a homebuilt Cessna 400. Similarly equipped, we should net out around $250,000 vs. over $600,000 for the Columbia. Although we're very excited about the new airplane, I guess I have commitment issues because I'm still interested in flying other airplanes too!

I have been thinking for a while of creating a shared ownership program consisting of homebuilts and rebuilts. This would be a way for members to fly a selection of interesting aircraft that suit the particular mission, so a couple LSAs, a 172/Archer, a fast glass plane like the Lancair, and perhaps a six-seater (which are impossible to find for renters.) Insurance and training would obviously be significant hurdles, but if they could be worked out, would other pilots find this type of program interesting?