Light Sport Cross-Country Lease & Rental LLC :)

[tu16]

Hi, everybody!

Well. I've been happily busy since my first introduction here - with flight training for a fixed wing sport pilot with very good folks here in Western WA. All what's left before a checkride is to hope for a glimpse of VFR weater in the Pacific NW autumn's gray drizzling skies to fulfill a solo cross-country requirements... :)

This means that the question which every Sport Pilot in this country is facing - "Now what?" :) - is near. :)

Renting an LSA from school for a day, a weekend in hot VFR season for a fun weekend flight to neighboring state national park, lodge, beach etc. in PNW is unrealistic - the planes are very busy with training, and have only most basic equipment to serve as desirable xcountry weekend fun machine - and price structure with rental minimums per day would be prohibitive anyway.

So - "Light Sport Tango Uniform is staying in the pattern..." :)

This realization gets most SP thinking about actually buying an LSA they need/want. And I'm not an exception. Then there comes the whole "under-utilization" issue to consider and a desire to find some way to offset the cost of ownership and a dreaded "leaseback" as an option.

There's also an interesting fact that in WA the sales tax on the aircraft (or equal use fee) can be waived if the sole purpose of purchase is to lease the plane (then state tax is collected on lease payments). But not for flight training.

All this started me thinking about "second-tier" - "after flight school" business for SPs. The plane(s) there is purchased and equipped not for training - but specifically for renting/leasing to qualified SPs for a longer x-c trips. High-end avionics/weather/autopilot/safety etc. - everything you'd want for a comfortable VFR day of cruising.

It would not be a "flying club", or a "partnership" - it's more like a "bare-bone charter" in yachting : keep qualifications current and schedule the plane for any time you need one.

Where "leaseback" to a flight school opens up the door for "over-utilization" and accelerated depreciation - this structure could be used for cost offsets of ownerhip of LSA where use is only moderate with occasional off-base trips by qualified lessees. Then "leaseback" to such business by owners that wouldn't mind occasional lease to qualified pilots to offset costs, but dread a grueling regime of flight training in their higher-end planes - would make sense, too.

Relationship with flight school FBOs would be I think also very symbiotic. Newly minted Sport Pilots in the trainers would have these carbon-fiber beauties with a glass as something to look forward to fly and easily augment their life style with. The leasing company would provide business to flight school by refering qualified applicants and leasing their planes to flight school to conduct checkrides, glass training, make/model transition training by their qualified CFIs.

I think the price structure could be modified, say, by splitting costs into much lower dry Hobbs plus fixed per day/week charges - which should make a much more affordable week-long flying vacation ar weekend getaways. No minimums. Let's say daily dry $30/hr + $100/day would make weekend stay in a fly-in lodge within 2hr flight into $120+$200 = $320+$100 fuel which would be less than typical plane rental structure with 3-5hr min on weekends. Savings would be much bigger when considering a 2-week flying vacation. Scheduling might be a limitation - and would naturally keep the plane utilization at the moderate levels.

Theoretically such leasing companies in neighboring locations will likely overlap at their destinations (LSA "hubs") and can get into mutual sub-leasing agreements that could increase aircraft utilization and availability at off-base locations while its "parked"....

What do you think, guys - could something like this work, if not as a profitable business but a cost ofsetting tool for owners of x-country equipped LSAs? Would insurance companies go along with this, provided lessee qualifcations standards are reasonable?

Thanks for any feedback/thoughts/comments you may have on the subject!

-Alex

[AZPilot]

Hi Alex,
Are you thinking about this as you would like to be one of the renters, or that you would like to start up this biz with your own money?

There is a great difference between someone just wanting to cruise around and fly cheaply, and one that expects to make
a million in aviation (start with 2).

Having been in the GA biz for several decades, I can give you some insight, but certainly can't type that experience into this forum, unless I turn into a novelist.

The 3 real choices are partnership with 3-4 like minded souls, aero club, and finally full blown rental FBO.

Each has its pros and cons, and of course associated costs and regulations.

You are certainly welcome to PM me if you have specific questions.

[tu16]

Thanks, AZPilot!

I really appreciate your offer to answer my questions in PM - and I'll make sure to take advantage of it, once I collect my thoughts a little bit more on the subject.

Answering your question - I'd like to be a renter/lessee from such hypothetical company - and, since none is around, I'm thinking about pros and cons to create one - so I could rent/lease from it :)

Not looking for making profit here - just to maintain relative liquidity (not a parthership, shared ownership, club etc.), to have a moderate cost offsetting effect w/o incurring effects of a heavy use, and to avoid a sales tax on a new plane. :)

Thanks again!
Alex.

[lledsmar]

To make aviation affordable for all I might suggest a good old fashioned proven business structure... hi volume and efficiency gets a better rate?

Or how about rental algorithm based on your health/experience/endorsements/driving record or number of visits to an MD as a student/PIC. Kinda like your credit rating... the price you are charged to rent an airplane depends on how much of a risk you are. Maybe we would have an extremely low rental rate for 16yo as long as they have a flight instructor along. If you maintain a low risk factor you get the best rates and if you dont care about totalling an aircraft and you have a ton of money then you pay a premium! (provided you purchase insurance like car renters)

If you are of the stage to purchase an aircraft but cant afford it... you will probably pay a premium to have an aircraft for an extended time which would be far less than the payment every month to own your own.

The people that would definately grow the industry are just not being enticed to enter it in the right way.

[Mtaylor]

Hello. I think you maybe onto something. I live in Coos Bay OR, I have looked for a company to lease a Lightning with no results. I owned my own gas company for a number of years. PM me we can talk.