How to Compute Hourly Costs For Own Plane?

Customx

Customx

Well-Known Member
I'm trying to compare the costs of airplane ownership versus going to an FBO or academy. What is the easiest way to compute the hourly cost if I were to buy my own plane? Is there a formula that I can use to plug in different numbers for fuel costs, tie down fees, insurance, maintenance, instructor fees, etc.? Thanks!
 
No specific formula but I got this info from a recent thread...



mojo6911 said:
10% down plus about another 10% in acquisition costs. $300-400 a month for the bank note. You are looking at about $10-20 per hour in engine reserve money, depending on the engine time. You are looking at about $24/ hour in fuel. I would estimate about $5-10 an hour for mx. Tie-downs usually cost 20-50 bucks a month, hangars can easily cost 10x that. Insurance should be less than $1000 per year. Oil changes every 50 hours.
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I don't recall a formula, but here's how it worked for me. I owned a '79 Cessna 152 for a few years. It had been very well taken care of and when my dad and I purchased it, it was within 400 hours of TBO.

We purchased it for $17,500 and split about $300 per month for the note. Insurance was less for the 152 than for my dad's motorcycle, but I can't recall what it was. It was like $450/year or something. We had a car gas STC for it that I utilized. At the time, the highest octane available was about $1.75/gallon (wow!), but I thought that was expensive as it had recently been $1.30ish. I think I calculated cruise fuel burn as 5.5 gallons per hour.

During the 3 years, I had to change a couple muffler clamps and repack the nose strut. I think I also had to change the forward oil seal. I would say my situation was about as cheap as you can get it. You had an ATP with 6000+ hours and a commercial CFI with 1000+ hours. We're both mechanics and know an IA personally.

With joint ownership you have

$150 per month
$18 per hour with fuel and 50 hour oil change
100LL would work out to about $30 per hour with 50 hour oil change
 
Customx said:
I'm trying to compare the costs of airplane ownership versus going to an FBO or academy. What is the easiest way to compute the hourly cost if I were to buy my own plane? Is there a formula that I can use to plug in different numbers for fuel costs, tie down fees, insurance, maintenance, instructor fees, etc.? Thanks!
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There are two things you have to figure: Fixed Costs and Direct Operating Costs.

Fixed costs don't change month to month:
Hangar
Insurance
Payment on the airplane itself

Direct Operating Costs will change based on how much you fly the plane:
Fuel
Oil
Maintenance Costs (inspections, overhaul, reserves)

I'll keep the math simple here:

Say your total fixed costs are $5000 per year and your DOC works out to $50 per hour. You take your fixed costs, divide them by the total hours you plan to fly the airplane in a year (say 500 hours per year) and then add that cost to the DOC ($50).

So in this case: $5000/500 = $10+$50 = $60 per hour.

Now, if you fly less than 500 hours per year, your fixed cost per hour will go up. If you fly more than 500 hours per year, your fixed cost will go down. However, your DOC remains roughly the same.

Take the same costs, but this time you only fly 100 hours a year.

$5000/100 = $50 + $50 = $100 per hour.
 
I think this has been said before, but I'll try to boil it down and make it really simple.

Figure out how much money you're going to spend on the plane each year.
Divide that amount by the number of hours you plan to fly in the year.

Bingo! You just figured your hourly operating cost.

Here are the numbers on my Cessna 140:

Hangar -- $1000/year
Insurance -- $1000/year
Maintenance -- $1500/year
Gas (5 gph = $25/hr) for 100 hours -- $2500

Total cost if I fly it 100 hours per year = $6000
$6000/100 = $60/hour


HOWEVER, owning a plane is about a lot more than hourly operating costs. Honestly, if you're looking to save money, owning a plane is not the best way to do it. You'll probably come out about the same as renting, give or take a few bucks per hour, and you'll spend a lot of time cleaning and caring for your bird.

The beauty of owning a plane comes from the freedom it gives you. You can fly wherever you want, whenever you want, with whomever you want. You don't have to worry about being back in time for the next renter, or not getting to take a trip because somebody else already has the plane booked, you don't have to fly in a plane littered with other peoples' trash on the floor, you know exactly what maintenance has been done, you don't have to sign any stupid rental agreements promising not to land on grass strips, etc. It's YOUR plane and you can do what YOU want with it.

Think about this...how many people would ride Harleys or go boating if they had to rent the motorcycle or boat every time they wanted to go out? For many people, renting would be the cheaper option if they really broke down their costs and looked at how often they'd realistically use that vehicle.

The difference is renting simply isn't fun. There's too much hassle involved with dispatch procedures, rental checkouts, etc.

The hourly operating costs on my plane are in line with a lot of C-150 rental rates around the country. But I fly my plane literally ten times more often, and have ten times more fun, than I ever could if I was renting. It's not ultimately about price, it's about flexibility.

Hope this helps!
 
Take whatever you figure using the above formulas and double it. Seriously, it will always cost more!

Sarcasm....kind of
 
Does this sound about right for a Cherokee 140?

Hangar -- $1000/year
Insurance -- $1000/year
Maintenance (Annual)-- $2500/year (a little high, just to be safe)
Maintenance (Misc) -- $1,500
Maintenance (Overhaul) $12,000/2000 hours = $6/hr x 300 hours --$1,800
Gas (9 gph = $40.5/hr) for 300 hours -- $12,150

Total cost if I fly it 300 hours per year = $19,950
$19,950/300 = $66.50/hour

If I add in some multi time, dual time, books, fees, etc. to get from ppl-mei, it seems like it would still cost around $30-35,000. It's cheaper than an FBO, but I'm not sure if the risk is worth it.
 
Customx said:
Does this sound about right for a Cherokee 140?

Hangar -- $1000/year
Insurance -- $1000/year
Maintenance (Annual)-- $2500/year (a little high, just to be safe)
Maintenance (Misc) -- $1,500
Maintenance (Overhaul) $12,000/2000 hours = $6/hr x 300 hours --$1,800
Gas (9 gph = $40.5/hr) for 300 hours -- $12,150

Total cost if I fly it 300 hours per year = $19,950
$19,950/300 = $66.50/hour

If I add in some multi time, dual time, books, fees, etc. to get from ppl-mei, it seems like it would still cost around $30-35,000. It's cheaper than an FBO, but I'm not sure if the risk is worth it.
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Yep, sounds about right.

When you say risk, are you thinking risk of getting a lemon that requires expensive mx?

Because that's always possible, but as long as you do a very careful prepurchase inspection, it's not very likely.
 
jrh said:
Yep, sounds about right.

When you say risk, are you thinking risk of getting a lemon that requires expensive mx?

Because that's always possible, but as long as you do a very careful prepurchase inspection, it's not very likely.
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Of course I don't want a lemon, but it's always possible that something unforeseen could happen. I've been looking on controller.com and it looks possible to get an IFR Cherokee 140 for about $30-35K. Here's one I was looking at today: http://www.controller.com/listings/...601.htm?guid=FA3855C61E4247448E8CFFAF8CE9DDA8

I think 38bat got a Cherokee, and even though he thought he got a great deal on it, didn't he just drop $7,500 on an annual?
 
Two points to ponder in your analysis. The overhaul reserve is not an out of pocket expense until it occurs, so you may or may not end up paying it. If you don't pay for the overhaul, it will come out of you pocket in the form of depreciation, but you may not havve to absorb all of it.

Normally airplanes are pretty good about holding value (though you have to pour money in them like there is no tomorrow to preserve their value). However, long term trends are towards decreasing demand for most of the GA fleet. We are talking about airplanes pushing 30 y.o., a declining pilot population and young pilots being swept up by the airlines as fast as they are minted are some of the factors that point towards difficult times ahead for airplane sellers.

So, while you might come out ahead on comparison of direct costs, don't forget to factor in how you might "take it in the shorts" when it comes time to get out of your airplane.
 
I'd like to know where you guys are getting a hangar for $1000 /yr ?!?!!? Around here (?) hangars are $200+ per month. Forget the hangar, put it on a tie-down for $100/mo.

One thing that is not being factored so far is the return from selling the aircraft. Total cost of ownership will not be know until you sell it. If you are lucky, you will sell it more for what you paid for it. If not, you still offset some of the expense involved. We bought a C150 for $5000 in the mid '80s and sold it a few years later for $6500. The same plane today sells for over $20,000.

Unless you really purchase a "lemon," ownership will be far cheaper than a large flight school (academy).
 
NJA_Capt said:
I'd like to know where you guys are getting a hangar for $1000 /yr ?!?!!? Around here (?) hangars are $200+ per month. Forget the hangar, put it on a tie-down for $100/mo.

One thing that is not being factored so far is the return from selling the aircraft. Total cost of ownership will not be know until you sell it. If you are lucky, you will sell it more for what you paid for it. If not, you still offset some of the expense involved. We bought a C150 for $5000 in the mid '80s and sold it a few years later for $6500. The same plane today sells for over $20,000.

Unless you really purchase a "lemon," ownership will be far cheaper than a large flight school (academy).
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You can't compare what happen to airplane values in the 80's to the situation today. Yes, that same 152 sell for more today than it did in 1980 but only is a steady stream of money was poured into it since then and it will sell for less today that it would have 4 or 5 years ago.

I could possibly sell my airplane for about what I paid for it 8 years ago, however I have put about $15000 in avionics. Overall the price trend for SEL pistons is down.
 
Customx said:
I think 38bat got a Cherokee, and even though he thought he got a great deal on it, didn't he just drop $7,500 on an annual?
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He dropped $750 on an annual. The rest was maintenance he held off on performing until it went down for annual.

Expensive annuals usually come from doing a year's worth of maintenance all at once.
 
Customx said:
Does this sound about right for a Cherokee 140?

Hangar -- $1000/year
Insurance -- $1000/year
Maintenance (Annual)-- $2500/year (a little high, just to be safe)
Maintenance (Misc) -- $1,500
Maintenance (Overhaul) $12,000/2000 hours = $6/hr x 300 hours --$1,800
Gas (9 gph = $40.5/hr) for 300 hours -- $12,150

Total cost if I fly it 300 hours per year = $19,950
$19,950/300 = $66.50/hour

If I add in some multi time, dual time, books, fees, etc. to get from ppl-mei, it seems like it would still cost around $30-35,000. It's cheaper than an FBO, but I'm not sure if the risk is worth it.
Click to expand...

You should check out my "Ever changing Plan" thread in the Career Changer section for a comparison of how much it cost me at a small FBO.
I really don't think you are saving that much owning a plane. You get your very own plane yes, but the risk of possibly having to pay exorbitant amounts to maintain and fix, not for me! Just my .02 though. Plenty of folks on this board have done just fine owning a plane.
 
Customx said:
Does this sound about right for a Cherokee 140?

Hangar -- $1000/year
Insurance -- $1000/year
Maintenance (Annual)-- $2500/year (a little high, just to be safe)
Maintenance (Misc) -- $1,500
Maintenance (Overhaul) $12,000/2000 hours = $6/hr x 300 hours --$1,800
Gas (9 gph = $40.5/hr) for 300 hours -- $12,150

Total cost if I fly it 300 hours per year = $19,950
$19,950/300 = $66.50/hour

If I add in some multi time, dual time, books, fees, etc. to get from ppl-mei, it seems like it would still cost around $30-35,000. It's cheaper than an FBO, but I'm not sure if the risk is worth it.
Click to expand...


In the DFW area, if you can even find a hangar, it is usually $200+/month, so do some research by calling around. It may be better just to get a tie-down space and buy a fabric cover.
 
Tiger815 said:
You can't compare what happen to airplane values in the 80's to the situation today.
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That wasn't my intent. It was only an example. The point is, owning an airplane allows you to recover some of the cost incurred. As opposed to paying for a academy where none of the cost is recovered.

I hope you didn't put $15K into radios on a C150 :D
 
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