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Flying Club Notes

Here is where we can put some notes on our flying club. Please see AviationNotes for more useful links.

MeetingNotes

Structure:

First we need to decide what structure our flying club should have. The AOPA has some nice materials to guide us: Or do we want to be just a co-ownership arrangement?

StructureQA:

Sample Documents:

Draft Documents:

Home Base:

Here is a short list of nearby airports we could base out of. Eventually we will probably want a large enclosed hanger so it would be nice if those might be available.
Airport Code Tie Downs / Mo T-Hangers / Mo 100LL Mogas
Mahlon Sweet EUG $50 ?? - $200 $5.08  
Hobby Field 77S $30 $110 $5.35  
Cottage Grove 61S $17.50 $114.58 - $125 $5.25  
Daniels OR78        
Lebanon S30 $0   $5.39 $4.90

Planes:

Desirable Features:

These will change over time as pilots come and go, but for now here is roughly what we're looking for:
  • Tricycle gear
    • Insurance is higher for tail draggers.
  • Better performance and payload than the average 172
  • A useful load of around 250 lbs per seat.
    • This is difficult to do so it's not a hard requirement.
  • At least a 4 place or better.
  • Fixed gear is cheaper on maintenance and insurance.
  • An IFR panel would be preferred although not necessary
  • ADSB out. We prefer not to be limited by this.
  • Short and unimproved strip capable.
  • A preference for a Mogas STC
  • Insurance that allows off field landings.
    • This does not necessarily cost more.

Here is a list of researched planes by category.

Land:

Tricycle Gear:

Two Seaters:
Four Seaters:

Tail Draggers:

Two Seaters:
Four Seaters:

Amphibious:

Tricycle Gear:

Two Seaters:
Three Seaters:
Four Seaters:
Six Seaters:

Tail Draggers:

Two Seaters:
Three Seaters:
Four Seaters:

Engines:

Here are some notes on engines. Usually it will be a choice between Lycoming and Continental but there are others. You can find lots of opinions on which is better though different models are good or bad from both manufacturers. A popular size and type of engine is the IO-360, though the suffix letters say a lot about it's HP and how it's intended to be used, without them you are comparing apples to oranges. The Lycoming has four cylinders, and vibrates a bit more. The Continental has six, is smoother but then there are more to break and fix. Continentals are about 60lb heavier and have shorter TBOs. Here are some links: A Continental IO-360D will be about a $27,000 engine. The 'D' version has a heavy case. A flat rated HP engine means that after TO and climb out, somehow the throttle is allowed to open so that it maintains a constant power as it gains altitude.

Franklin Engines seem to still be in production, and have a lot of good qualities. Though the TBO is only 1500 hours, perhaps because most come without an oil filter, just a screen. Adding an oil filter seems to be a common upgrade.

Insurance:

  • http://insurance.aopa.org/Aviation/flying-clubs
    • AOPA's numbers are: 800-622-2672, and 316-942-2223
  • Renters vs Owners policies:
    • if you're a co-owner of 20% or less of the plane then you can get renters (maybe not for all scenarios), and renters insurance will cover you for other planes you rent.
  • Inexpensive and simpler planes are cheaper to insure.
    • You can insure for stated Hull value not actual, but you pay extra for higher values.
    • A plane is considered totaled at about 70% of insured value, or was that the repair cost?
  • Pilots with more ratings and experience are cheaper.
    • premiums will be set by least experienced pilot.
    • rates go down with logged hours.
  • A club with proficient and current members is cheaper to insure.
  • A small co-ownership is cheaper to insure than an actual club so start we might want to start out that way.
    • The estimated insurance premium for 4 or 5 owners of a 182 is around $600 total per year . For a club where members come and go over time its two or three times that. One of the reason is you add limited commercial activity, such as training.
    • It's felt that 10 members per plane is the sweet spot.
    • Once a club grows to more than 15 members per plane the insurance rate goes up even more / per member.
  • Who pays the deductible, pilot or club?
    • Probably the pilot
    • Deductibles range from $100 to $2500
    • However if you are an AOPA member and you take the forgiveness course then you get a zero deductible for free!
  • If you have no student pilots then your rates are cheaper, though you well still be covered for any Dual time you need or want.
    • Apparently the cost is very similar for students and low time pilots.
  • Accident history is a factor, and will drive costs up.
    • Though hanger rash is not a big deal.
  • What airports are nearby or if you're on a grass strip doesn't matter that much.
  • Tail dragger rates will be an additional 20% - 30%
  • Retract rates will be almost double if I heard correctly.
  • Some older planes say, 1950s might have higher rates, though a 60s Comanche would not be an issue.
  • Breaks for Hangared aircraft
    • It can range from 5% of hull value to 25% of premium
  • Are you an equity or non-equity club? Non-equity clubs have higher rates.
  • who can fly the plane? care custody and control. drives rates.
  • For Actual flying clubs there are things you can do to lower rates.
    • Properly run clubs have lower clams.
    • They want to see good organization, and management
    • A designated operations manager
    • A safety officer with great authority.
    • A good treasurer
    • A designated maintenance officer; toughest job to fill.
    • A reliable system for recording and addressing squawks.
    • Better (additional) currency requirements over what the FAA requires.
    • A good pilot check out program for each class of aircraft.
    • Be claim free and you get a 5% discount.
    • Have 2/3 of your members be AOPA members and you also get a 5% discount.
    • Good bylaws.
    • Keep accurate records.
    • Group responsibility.
  • Coverage limits:
    • Typical coverage is 1M total with 100k / passenger, though 2M and 250k per passenger is possible.
    • Higher limits are more expensive.
  • Never assume you are covered by someone else's insurance, that's why they have non-owners / renters insurance.
    • Are you an additional insured?
    • Is there a waver of subjugation? (They won't come after you)
    • Check the deductible.
  • AOPA insurance has three underwriters that do flying clubs, and 12-18ish that do most other types of owners or renters policies.
  • No charge for social or inactive members.
  • What other types of coverage are typical or important?
    • Liability coverage is the core.
    • They are working on a new option for individuals to buy additional coverage on the group policy just for them.
    • Cross liability insurance is very important. from other members.
    • Hull coverage, ground and in-flight full coverage. can keep costs down if a plane is in a shop or storage for many months. eg ground only coverage.
  • What activities are covered?
    • Flight instruction.
    • Primary student instruction.
    • First flights.
    • Normally you don't have open pilot warranty until you have more than say 10ish members.
    • you can cover events on the grounds, with food or alcohol etc...
  • Who is insured?
    • The Club, members, families of members, member CFIs.
    • Though non-owners are not usually insured.
    • Cross liability is very important.
    • How much is enough? up to 2M or 250k per passenger
    • Legal defense is included and very important the cost of defense does not count against your limits.
    • Anyone leasing to a club is also a named insured.
    • Premises liability, trips and falls, medical, even if you rent.
    • Search and rescue.
    • Serving liquor liability
    • Sales of aircraft to others liability coverage.
This might be dated but I read that most insurance companies consider aircraft ownership by more than three persons to be a flying club. New, recently developed, club programs can accommodate clubs from three, to a virtually unlimited number of pilots per plane in a smooth progression. Clubs should review the insurance needs of each member to arrive at a consensus of the limits required.

Scheduling Systems:

We'll need a convenient way to schedule the aircraft, track maintenance, do accounting, etc...

Considerations:

  • Type Of Legal Entity: The type of entity you join or create will impact your liability exposure, taxes and fiduciary responsibility. The limited liability company (LLC) has gained much popularity with aircraft-owner groups. Such an effort will cost more money and be slightly more complex to set up than a simple partnership, but the liability protection is well worth the added costs.
    • Co-Ownership and simple partnership is probably out because everyone is exposed.
    • Most aircraft co-ownership agreements are considered tenancy-in-common, meaning that ownership passes to the dead co-owner\x92s beneficiaries. If the agreement is a joint tenancy, the share goes to the co-owners. Some agreements include a life insurance policy on all co-owners.
  • Selecting Owners:The compatibility of the owners is paramount. Such elements as piloting experience, mission profile and overall financial standing are important to discuss openly.
    • Some clubs only allow certificated private pilots (or better) to join. No students (or sport pilots) are allowed. They may be missing out on much opportunity to expand the club with such a requirement, but it also means their aircraft don't take the beatings student pilots often give them.
    • "My advice to anybody looking to get into a partnership is to talk first," says Meredith. Like a marriage, owning an aircraft will be a relationship that must withstand good and bad. Interview prospective members and be candid about your requirements and personalities. Decide upfront what type of pilots you're willing to own with, and stick to those requirements."
  • Termination Procedure: If a member doesn't work out, or if a member chooses to leave the group, there needs to be an exit strategy. Events such as a member's loss of medical, divorce, sudden illness, bankruptcy or even death need to be addressed. Can a member sell his/her shares or does the company purchase them? What type of advanced notice is required? What if the aircraft loses some of its value?
  • Management And Administration: The partnership must stipulate whether members will manage the finances, maintenance, book-keeping and membership duties for the group, or whether these tasks will be hired out. The group must decide who will be authorized to handle the financial side of the co-ownership, who can write checks and who will authorize expenses.
  • Insurance: Insuring larger groups has become more difficult in today's litigious society, and the typical limits of liability per occurrence and per accident are hardly adequate. Insurance pricing can vary wildly, so various sources should be looked at.
  • Maintenance: Many partnerships require the members to get their hands dirty, especially at annual time. This keeps maintenance costs at a minimum and imbues each pilot with intimate knowledge of the mechanical condition of the airplane. Some groups can afford to simply farm out the maintenance to a local facility.
  • Resolution Of Disputes And Problems: Establishing documented resolution procedures will help keep you out of court. Remember that as soon as you begin talking with an attorney and start dealing with the court system, costs will mount quickly. Consider how disagreements between co-owners will be resolved, and what procedures will be followed (such as mediation) before resorting to the legal system.
  • Aircraft Management: Issues such as scheduling and squawk procedures will need to be specified. Several free and paid options exist, from simple to feature-rich. You must decide whether the aircraft will be allowed to be used for instruction, and what the check-out requirements will be for new members, as well as currency requirements for existing members. Such details as weather minimums and how minor maintenance will be handled should all be addressed.
    • You also need to spell out how the aircraft will be shared among the co-owners. Does someone with a larger share get priority? Do some co-owners get weekend priority? What if one of the co-owners takes the aircraft out of town for awhile? Will there be a flight log in the aircraft for recording flights? How will the questions about liability be resolved? These and many other questions need to be discussed and answered early in the relationship to ensure that the relationship will last.
    • What happens in the event of a maintenance problem away from your home airport?
    • Will hours be based on Tach or Hobbs?

Articles:

Checklists:

-- ClifCox - 27 Mar 2015
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