Getting ‘Aloft’—Syndicate Ownership

What do you do after you have gained your PPL?

In my case, the answer was “not a lot”—flying has always been an expensive business, the aircraft of successful clubs are rarely available at short notice and the club will usually insist that you undertake a ‘check ride’ if you haven’t flown for a while.

The upshot was that I flew sporadically for several years and then allowed my licence to lapse”—to get it back, I effectively completed the PPL course again (in about 18 hours) and was obliged to re-take the ground examinations.

For me, everything changed in 1986 when I was offered a one-sixth share in a Piper Cherokee 160 which had been operated on a ‘syndicate’ basis for many years—I wasn’t previously aware of aircraft syndicates though there are a quite a few operating in the UK.

Suddenly, I was able to fly whenever I wanted as the aircraft was hardly used in the week and any conflicts at the weekend were always resolved amicably—often, by the conflicted members flying together.

Taking the aircraft away for a few days was never an issue, even if I only put a few hours ‘on the clock’.

Being based at Redhill, the aircraft ‘knew it’s own way’ to Le Touquet and Deauville—try taking a busy club aircraft to France for the whole day for less than 2 hours-worth of billing.

And, the flying turned out to be a good deal cheaper.

In essence, I moved from flying little more than the bare minimum to maintain my licence (at the time, 5 hours every 13 months) to flying around 40 hours annually which is quite a lot for a Private Pilot.

I was also able to ‘park’ the aircraft at Southend for a couple of weeks while I completed my ‘IMC Rating’—I also completed the ’Night Rating’ over two evenings.

Of course, this sort of advanced training is a lot more effective in a familiar aircraft.

We had a ‘bit of a setback’ in September 1992 when the aircraft suffered an engine failure on final approach to Redhill at night—probably due to ‘carburettor icing’ which was a common problem with Lycoming engines.

With traditional courage and 'true grit', the pilot wrestled with the controls to steer the aircraft away from the M23 which was only half-a-mile away.

Fortunately, nobody was hurt and the insurance paid-out quickly so the group purchased a rare Fuji FA200-160—there were just 14 Fuji aircraft on the UK register at the time.

Although similar in performance to the Cherokee, the Fuji was stressed for basic aerobatics—with front-seat occupants only and within certain weight limits.

Additionally, you could batten-down all of your papers and fly with the canopy open—which never seemed terribly popular among non-pilots.

The Fuji gave us 11 years of good service though maintenance costs were mounting towards the end so we decided to disband the group and sold the aircraft to one of our engineering contacts who completely refurbished it.

I thoroughly enjoyed my time with the syndicate though there were some stressful periods, particularly when dealing with engineers—a definite case of, “you can’t live with them and you can’t live without them”.

Inevitably, members came and went with some ‘fitting-in’ better than others—after the Cherokee crash, the group seemed to become closer and members flew together more often.

It’s always good to fly with another pilot and share the duties—there was always some friendly banter over who flew the outward leg and got to drink wine with their lunch at Le Touquet.

Towards the end, I began to feel that I would like to fly something a bit more modern and ‘pokey’ so I was looking to move-on even before we decided to sell the aircraft.

Also, having run the administration (booking, accounts, log books, etc) for about 10 years, I was quite keen to fly an aircraft, pay the money and just walk away.

To some extent, I have achieved both objectives by flying with a club in France but I do miss the ability to drag the aircraft out and fly ‘on the spur of the moment’ when the weather looks nice.

I also miss my full involvement in the management of the group together with the fast, effective, considerate and democratic decision-making.

As far as I can see, flying syndicates are not so common in France but it would be good to hear from any who would like to make their presence felt.

Points to ponder

Is it cheaper to fly with a Syndicate?

Whatever the charging structure, the economics of a syndicate tend to depend on how much the aircraft is used.

Even if the aircraft never leaves the ground, costs such as hangarage, insurance and annual maintenance are incurred—you could postpone the annual maintenance or the Certificate of Airworthiness inspection (when due*) but you can’t fly without them.

* Maintenance requirements vary depending on the type of aircraft registration,

The principal advantage of group ownership is 'availability' rather than cost although significant savings can be made if the aircraft is flown frequently.

In our 7-strong syndicate (increased from 6), the economics worked well if the members flew at least 15-20 hours per year.

With those sort of numbers, there were few conflicts over availability.

Does a group share hold it’s value?

On our Fuji Group Website, we addressed this issue as follows:

The Group have no direct interest in the value of Group shares which may be sold for whatever the buyer can get.

Although well-maintained aircraft do tend to hold their value, new members are essentially buying the right to fly this aircraft on the stated terms.

The Group is run for the benefit of active members and should not be regarded as a form of investment.

I would mention here that it is essential to have a good 'group agreement' so that every member is aware of their rights and obligations while also having clear title to their share in the aircraft and group assets.

I notice that an increasing number of UK syndicates do admit members without any capital outlay—presumably, the capital cost of the aircraft is recovered in the other charges or perhaps there is a ‘majority’ owner simply recouping some of the running costs.

As UK-registered aircraft in the ‘Private’ category cannot be operated on a ‘hire and reward’ basis, anybody paying to fly them must be a part-owner.

Nothing to stop syndicates registering their aircraft in the ‘Public Transport’ category but insurance costs are higher and maintenance requirements more stringent.

What is the best charging structure?

This was a discussion which dominated most of our semi-annual group meetings where these sort of decisions were made on a democratic basis.

In common with many syndicates, we charged a fixed ‘monthly fee’ which was kept as low as possible in the hope that we would make a profit on the ‘hourly rate’ to cover some of the larger annual bills such as insurance and maintenance.

The trouble was that some members flew less than a dozen hours a year which inevitably led to regular ‘whip-rounds’ to make-up the shortfall.

From speaking to other syndicate members, I found that most group aircraft were underused and experienced similar problems.

After a few years of operating the Fuji, we had a clear idea of the normal running costs and agreed to fix the monthly standing charge at a level which would cover all predictable costs.

We then charged for flying hours at the cost of fuel/oil which, at 2009 prices, would be about £50 per hour in the UK (it was only £30 in 2002)—I had previously measured fuel consumption accurately, over the first year of operation.

We had an account with Redhill Aerodrome but the cost of any fuel uploaded elsewhere by individual members would simply be deducted from their flying charges—an arrangement which my present French flying club would do well to adopt.  

If travelling abroad, you can, of course, claim a fuel duty rebate which would significantly contribute towards the cost of a trip to Le Touquet—even better was a trip to the Channel Islands where you could claim the fuel duty rebate at the UK end and then fill-up with duty-free fuel when you got there.

The result of this change was that the ‘flyers’ were encouraged to do many more hours and the others sold their shares, without any great difficulty, to people attracted by the low flying rates.

The higher monthly charge worked better from the administrative point of view as the money was always there when the big bills came in.

It was also fairer for members joining or leaving the group—for example, you wouldn’t join to suddenly face a large maintenance bill or leave shortly after you had paid your share towards the annual insurance.

It would be interesting to learn how other groups structure their charges.

Comments

[Tim]

Hi Les, very interesting post.

I am trying to find out as much as I can about aircraft syndicates and your article was exactly what I was after.

Would there be any chance that I could contact you by email to ask some more questions about your experience, and dealings with tech logs, insurance, bookings etc.

Many thanks

Tim (tim.cuddy@btinternet.com)

[Les King]

Hi Tim

No problem, feel free to email me on lesking@eurofileit.co.uk

As you mention, there are a number of administrative issues which require businesslike management and I will be happy to offer the benefit of my experience.

Regards

Les

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[Gerrybolger]

A really interesting and thoughtful article. I thought I'd share my perspective.

I've tried syndicates and was with one at Elstree (yes not France) but one starts somewhere. I joined a non equity, non share group, which was approx 10% cheaper than clubs rates. I then discovered that the W&B was incorrect only when I went to a fly-in with other pilots, and was 'playing with the W&B app on my iPhone (sorry I like my gadgets!) I was horrified to find that although a 4-seater PA28, the aircraft could not take more then 2 with half tanks.

I pondered this and was OK until same a/c had an power failure on take-off. For those that know EGTR, it has a graveyard at the end of one runway coupled with electricity pylons. It has non-standard joins and is also a bit of a tricky landing in a cross wind.

This was enough for me not to continue in this syndicate. I have since started my IMC in a C172 and its good to have that skills now with EASA realignment happening.

I have since made a serious decision and have bought a Jabiru SK - its in excellent condition; Jabiru are Australian self-build which are treated as Groo-A on the register. This type of a/c needs looking after and regular flying and I went up in it yesterday and landed it on approx 300m if not less of grass in Norfolk. It banks beautifully and behaves similarity to the Robin Dr-400

I intend to bring it to Limoges in the summer where I come to my holiday home see www.maisonbojac.com. I can go to see friends in Annemasse (on the French Swiss border) and also fly don to Monaco and the coast.

I'm lucky enough to have the cash - not any more!! as I've very empty pockets - but have also found a network of people who will help me maintain and learn this aircraft. Forme the maths works; eith pay £130/hr from a school or £110 from a syndicate (although equity syndicates bring this rate down). My investment means I can fly from UK to Limoges for £90 with fuel at EGTR prices (and with VAT back this will probably be less than £70 at 95-100nm/hr

I am unsure of what the equivalent is of the LAA in France but having an aircraft that you maintain, and take pride in and manage is a major decision. I probably don;t understand how aircraft truly work; but I'm about to find-out.... so any Jabiru flyer near LFBL, let me know

[munchi choksey]

dEAR gERRYBOLGER,

i am planning a flight to Limoges on March 5th. Any particular tips regarding the airfield, fuel availability, paying for same, and the like?

Many thanks for your help.

Yours sincerely, munchi choksey

[Les King]

Hi Munchi

To get you started, here's where to get the official airfield information http://www.sia.aviation-civile.gouv.fr/html/frameset_aip_uk.htm

I haven't flown from there since June so other readers may have more useful info.

Regards

Les