Partners wanted for Flight Design CTLS partnership (FL)

Looking for a partner? No, we're not talking about dating. Partnerships are another way to bring down the cost of flying. Use this forum to find like-minded folks in your neighborhood.

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MyPlane
Posts: 2
Joined: Sat Jul 10, 2010 10:30 am
Location: Palm Beach Gardens FL

Partners wanted for Flight Design CTLS partnership (FL)

Postby MyPlane » Sat Jul 10, 2010 12:29 pm

I am looking for 2-3 partners to jointly search, purchase and operate a CTLS out of North Palm Beach County Airport (F45). I have put together my ideas on a little website. Check it out: http://www.myplane.us

I also welcome comments of LSA owners on my numbers in the cost calculator. Feedback from people who actually operate a LSA would be most appreciated.

Tom

Jim Stewart
Posts: 480
Joined: Thu Oct 12, 2006 6:49 pm

Postby Jim Stewart » Sat Jul 10, 2010 10:11 pm

Your annual cost seems high. I average about $400/year for my CTSW. I do assist which lowers the price if your A&P / LSRM allows it.

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rfane
Posts: 216
Joined: Wed Apr 26, 2006 3:19 pm
Location: Sunnyvale, CA

Postby rfane » Sat Jul 10, 2010 11:29 pm

The annual will usually be cheaper than what you are budgeting, but you also have 100 hour inspections, as well as other maintenance. Cost of tires and other stuff adds up. The first few years the costs will be lower than later when things start to need replacing, etc. After 5 years the costs start to go up quite a bit when things need to be mandatorily replaced, repacked, inspected, etc. For example, at 5 years all of the rubber on the engine needs to be replaced. This requires the engine to come off, and the carbs need to be rebuilt. At 6 years, the BRS needs to be repacked. At 1,000 hours, the prop and gearbox need to be sent off to be inspected. Sooner for the gearbox if you are burning leaded fuel. You also might have Service Bulletins from Flight Design, Rotax, BRS, etc. that must be complied with, and it's hard to plan for.

A few things not in your costs are Property Taxes and LLC Taxes. In this county, we also have to pay property tax on the hangar that we rent from the county. You also don't have anything for an XM subscription.

Your engine overhaul cost is a bit optimistic. I'd plan on the cost of bolting a new engine on, rather than overhauling the old one. You can likely overhaul the engine itself for fairly cheap, but the cost of all of the accessories will drive the price up to the point that a new engine, with new accessories makes more sense. Especially from a labor standpoint. If the timing is right, Rotax will offer a good trade in allowance on your old engine that will help on the cost, and by the time you need one, likely Rotax will have a fuel injected 912 that you could put on.

We charge ourselves $50 an hour wet. Half goes into maintenance and engine reserves, and the other half is for fuel. Most of the time fuel is less if we are filling up with Mogas, other times it is more at summer 100LL prices. It averages out. I will be a happy man when unleaded avgas is approved and available.
Roger Fane
Former owner of a 2006 Flight Design CTsw

MyPlane
Posts: 2
Joined: Sat Jul 10, 2010 10:30 am
Location: Palm Beach Gardens FL

Postby MyPlane » Sun Jul 11, 2010 1:45 pm

Thanks a lot for the valuable feedback, Jim and Roger. I incorporated your remarks into the calculator, and I see now where Roger's 50$/h are coming from.

Florida seems to have a very favorable tax climate for aircraft owners judging from what I have found so far. Aircraft are apparently exempt from property tax, and there is no state registration fee. But I'll need to get the advice of a specialized accountant on this subject anyway, and also to find out more on the pros and cons of co-ownership vs. forming a LLC. Forming a LLC is tempting to control liability issues, and it would be very easy and cheap in FL. But apparently there are pitfalls such as being considered an air transportation service by the IRS or a charter service by the FAA. Would be great to hear back of anyone who has experience with that in FL.

Thanks again for your remarks, Jim and Roger.

Jack Tyler
Posts: 1380
Joined: Tue Nov 30, 2010 5:49 pm
Location: Jacksonville, FL

Postby Jack Tyler » Wed Dec 01, 2010 10:20 pm

Tom, while not related to an LSA partnership specifically I think your choice to form a partnership can be the very best of your options if our experience is any indication. When our family (3 pilots) were moving out of General Aviation (to go sailing for two of us, off to fly for Navy for the third), we formed a partnership for our AA-5 several years before cutting the flying cord altogether. We used the AOPA partnership agreement and the advisory package they have available and the plane was in good condition as the partnership began, both of which were helpful to getting off on the right foot. But the key to the success story was picking the right folks, and just one at a time (so #2 gets a full say in who #3 is, and so forth).

Another thing that helped was to spell out some roles for the partnership upfront. In our case, we knew we needed a guy to do the financial side of things, someone to keep the charts, plates and other doc up to snuff, a third to be responsible the maintenance & repairs got done (both owner assisted and A&P work), and a fourth to handle the schedule (who flies when; balancing holiday & weekend issues, etc.). These roles were discussed during the 'getting acquainted' sessions and no sooner did we have 4th partner picked than we had 4 jobs assigned.

My biggest caution to you is where I've seen the biggest failures in partnerships (in boats as well as planes): the agreement's terms (the 'what ifs') are not fully spelled out up front and/or partners not held accountable to them. Talking to some others in partnerships will help you identify the issues that need to be addressed, and of course this is why the AOPA agreement gets very detailed about what should happen when a partner - thinking s/he's being treated unfairly - decides to withhold the monthly payment.

For us, using an agreement (vs. incorporating) was the right choice because it reinforced the interpersonal responsibility we all wanted to feel - for one another as much as our own individual rights - while an LLC approach would have given it an entirely different (and more impersonal) dimension. YMMV but I'd start with the Agreement approach and see how that feels to the other potential partners.

The partnership we started in 1995 is still working smoothly, altho' the size grew from 4 to 5 and most of the individuals have changed, and flies to this day out of St. Pete's downtown airport, SPG. In fact, I hope to be flying down to Sebring in 33R in January, the guest of the very first partner we picked...who was my CFII. I wish you as many good memories we have.
Jack
Flying in/out KBZN, Bozeman MT in a Grumman Tiger
Do you fly for recreational purposes? Please visit http://www.theraf.org


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