As an airplane owner, I am often asked if an airplane can be a moneymaker. The question usually arrives as an assumed positive, as in, "Wow, you rent out your...
Is Your Airplane a Money-Maker or Money-Loser?
It's another year and people still often ask if an airplane can be a moneymaker. The question usually arrives as an assumed positive, as in, "Wow, you rent out your airplane... that's gotta be a moneymaker!" As with most things, reality may not always match expectations.
To illustrate, here is a recap of the "numbers" from 2022 for my favorite little airplane, my Aeroprakt A32 Vixxen. She's a beautiful 2-seat, 100 MPH, flyer with jaw-dropping visibility from her large glass door windows. She's the perfect low and slow or semi-fast and fun airplane, a capable long-flyer and a near-perfect airplane for training.
However, my accountant will rather sourly point out that while 2022 year's rental of the Vixxen brought in $35.1k on the revenue side of the ledger, the expenses tallied $44.6k on the other side meaning my "moneymaker" generated a not insignificant $9.5k loss instead of the hoped for profit.
On the revenue side, in 2022, the Vixxen rented out for 312 hours. Plus, I flew her for 16 more hours (mostly to and from scheduled maintenance, a flight review, and the start of my CFI-S training to become a Sport Pilot Instructor). All said the Vixxen flew for 328 hours. Thus, the rental hours alone produced an average $113 per flight hour in revenue. Don't get me wrong, there were also plenty of smiles generated throughout those hours and with 312 rental hours, lots of other people also got to enjoy the Vixxen, but it wasn't a "big moneymaker" by any stretch.
How did that happen you ask?
Well, over the course of the year, there's insurance, hangar, and maintenance expenses, let alone gas and such.
- $7,700 for Insurance fees
- $5,300 in Hangar fees
- $17,700 in Maintenance
- $6,800 in AVGAS
- $1,400 in Supplies
- $1,300 in Property Taxes
- $4,400 in Bank Fees, Subscriptions, etc.
Thus, total expenses tallied $44.6k.
Here's the view on a per flight-hour cost:
- $23 per flight hour for Insurance fees
- $16/hour in Hangar fees
- $54/hour in Maintenance
- $21/hour in AVGAS (I love the fuel efficiency of the ROTAX engine!)
- $18/hour in Supplies, Fees, & Subscriptions
- $4/hour in Property Taxes (the taxman gets you at every turn!)
All of the above means that every flight hour in 2022 cost $136 per hour versus revenue of just $113 per hour. Enough said? Every single flight hour generated a net negative loss of $23!
Note, the published rental rate for the Vixxen in 2022 ranged from $100 to $130 as it increased with the gas price increases we all experienced.
Want more of the details behind the costs?
- Those insurance fees took a big jump this year from an average of $5,500 the past 2 years to the 2002-23 rate of $7,700. Ouch! Why, well, "rates are just up across the board". You can't fly without insurance though. The airplane is a 2018 model so it being "newish" is part of it, as is the fact that it's a light sport airplane, but the biggest element in the insurance cost is that I choose to rent the airplane to others so they can experience and learn the wonders of flight. Sharing it in this way means higher insurance costs without a doubt.
- Insurance was certainly a surprise, but maintenance costs in 2022 was the really-big and unexpected surprise at about twice what I had budgeted. When the Vixxen went in for it's 600 hour service, it included pulling the prop and inspecting the Rotax gear box. We found wear that was more than we wanted to see and so new gears were placed on order. All proceeded smoothly enough but the plane was out of service for nearly two months throughout the process and of course, no one can rent a plane that's out of service! So, you're spending maintenance money and not earning rental income everytime service arises. Ouch.
The 600-hour gearbox inspection was required because this Vixxen drinks 100 octane, low-lead aviation fuel. The engine actually prefers to drink unleaded auto gas but San Diego County doesn't allow the pumping of low-lead auto gas at the Vixxen's home airport. So, the engine wears faster AND the environment suffers from the burning of leaded fuels.
As the old saying goes, it's just the Government and they are only here to help!
- The rest of the costs are pretty self-explanatory and range from gasoline to cleaning supplies and even the little website where we manage things for www.fly4fun.us.
So, what's a business to do?
At first glance, you might just say, "raise your rental rate and all will be good." I worry though that raising the rate may make it harder for some wanna-be flyers to afford the sport, and it may leave those who do fly, flying less hours so as to hold down their cost.
To me, it seems pretty clear, the answer to getting the Vixxen to being a positive moneymaker versus it's current loss-maker status, is simple... get more rental hours of flight, plus maybe a tiny rate bump this spring and voila, a small profit should emerge!
Yep, we just need to introduce more and more people to the thrill of flying in a small airplane through some of the prettiest scenery Southern California has to offer. How hard can that be?
Who do you know who wants to fly for fun with us?
PS The photo of the Vixxen glowing in the late afternoon sun, comes compliments of a good person who flies the plane regularly and was thoughtful enough to snap the shot as I returned to the hangar after a training flight. Many Thanks!
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