Family Member wants airplane buying advice, $750k budget

Alchemy

Alchemy

Well-Known Member
Hi,

I have a family member who has come to me for airplane buying advice, I guess because I'm a professional pilot and I'm supposed to know about these things. The problem is I fly them, not buy them. So I'm seeking advice on what to tell him.

He's a 50 year old man who owns a successful medium-to-large business based in the south central US. He has a wife, 4 children, and 2 stepchildren. He is not a pilot.

He has told me his budget for this airplane purchase is $750,000 max, but would really prefer to spend 400-500k total.

Most of his business is conducted along the gulf coast, within 1000NM of his home base, which will be a 5-6k ft paved airfield.

He wants the aircraft for both personal and business use and is looking to set up an LLC to facilitate this.

He has been seriously considering a King Air C90 that he found for $375,000. It has relatively low time engines and a pretty nice avionics package in my view. I told him that the King Air is probably a good choice but it sounds like he might want more airplane. I just know he wants something that can get his rather large family to a vacation someplace like the Caribbean while at the same time taking care of his business travel needs.

What would you do? I just want to steer him in the right direction, even if that's telling him to talk to someone who really knows what they're talking about. Otherwise, I will start doing some research for him myself, so any links you might have on this subject would be appreciated. What questions should I be asking him?

Thanks in advance.
 
When you say he's not a pilot does that mean he will hire one and have the plane professionally flown? That makes a big difference. Also what is he budgeting for operating costs? Many airplanes that are cheap to acquire can crush you in unforcasted operating costs down the road.

I don't know how much 750k is for your family member, if he is very cost sensitive, it's normally better to start off small and work your way up. Instead of jumping into a turbo prop, operate a Baron or something similar for a year or two. This can be eye opening for new owners that have never been invloved in aviation.

If these are not a factor for your family member then at that price and with that many people, I can really only think of a MU2 (if it is professionally flown). One of the long bodies, preferably a Marquise. Although if he's looking to move up again in a few years it might be harder to resell.

I can tell you a C90 is not going to fit that many people if he's trying to take them all in one trip.
 
Yes, he will have to hire a pilot. Whether or not the airplane would be flown enough to warrant someone full time, I don't know, but I kind of doubt it.

I don't know what he is budgeting for operating costs. That's a question I should ask him. 750k is probably about 9 months of income for him right now. Basically what I need at this point are a list of questions to ask him, so far I have:

1. What's the longest trip you see yourself wanting to routinely take in the airplane?
2. How many people do you need to carry regularly?
3. How many days per year do you envision the aircraft being used (away from home)?
4. How many dollars per hour are you willing to spend on operating costs in addition to acquistion costs?

I need more questions for this list.

Oh, and I just found out that the C90 he is looking at has "Walter" engines instead of PT6's? I assume that's a bad thing.
 
Those are good although in corporate aviation I've never heard anyone talk about days away for the aircraft, just the pilot. So a better question would be how many hours a year do you think it will operate.

1. What is the mission going to be 80% of the time? (Pretty much your first two questions)
2. Budget for fixed costs? (Different then variable hourly costs)
3. Resell value? For that budget you could pickup a Cessna 500 but you probably won't be selling it for much or anything when its time to move on.

You mention the C90 has low time engines, you also want to make sure the airframe doesn't have too much time on it.
 
He could look at the older (late seventies early eighties) King Air 200 series. Plus side to a King Air is that he could fly it forever, theoretically, as their air frames are not life limited. There are a few decent ones currently available in the $450-700K range. As member TrustMe said, the older King Air 90s don't have the legs or room to fly the mission he's looking at. Marquise would be a solid choice. I would also suggest looking at the Piper Cheyenne series - the III or IIIA would be in his price range, given it would be the higher end. For the mission he wants to fly, these are a few of the airplanes that could handle the mission profile day in day out. I also support the idea of him getting his feet wet before diving into turbine equipment. If he wanted to have a pressurized twin with four seats, the Cessna 414 and 421 would be worth taking a look. In the current market, you can get a lot of airplane for $400-500K.
 
He might not understand the full cost of aircraft ownership. Pilot training, maintenance, insurance, fuel, hangar. You might want to get some numbers together and sit down with him. He might be better off getting in a fractional.
 
One thing to add unless he has a full-time pilot he will have no one to look over the day to day care for the airplane. He'll need someone that will take ownership and will make sure nothing sneaks up on them. Expecting a part-time pilot to take ownership is a crap shoot. Once you start getting into turbine equipment there are a lot of unique inspections that can crop up that needs someone to look into and manage.
 
Your family member needs a professional consultant to help him in person. In my business, we call this "acquisition services." Basically, we assist in every aspect of buying an aircraft...budgets, performance capabilities, training, insurance, negotiating the purchase, drawing up contracts, setting up an LLC, discussing tax deductions, you name it, in exchange for a commission when the deal is complete. It's a surprisingly big job.

Frankly, this job is too big for a professional pilot with no aircraft sales or management experience to take on. It's kind of like asking on the internet for help buying a house. Honestly, I'd love to help, but I only work with owner-flown aircraft. You need to find someone like me in the turbine world.
 
jrh said:
Your family member needs a professional consultant to help him in person. In my business, we call this "acquisition services." Basically, we assist in every aspect of buying an aircraft...budgets, performance capabilities, training, insurance, negotiating the purchase, drawing up contracts, setting up an LLC, discussing tax deductions, you name it, in exchange for a commission when the deal is complete. It's a surprisingly big job.

Frankly, this job is too big for a professional pilot with no aircraft sales or management experience to take on. It's kind of like asking on the internet for help buying a house. Honestly, I'd love to help, but I only work with owner-flown aircraft. You need to find someone like me in the turbine world.
Click to expand...

I disagree, a competent professional pilot should be able to handle all of things you listed above, especially on a small twin turbine. Although, I agree that it's a much bigger job than most owners understand.
 
jrh said:
Your family member needs a professional consultant to help him in person. In my business, we call this "acquisition services." Basically, we assist in every aspect of buying an aircraft...budgets, performance capabilities, training, insurance, negotiating the purchase, drawing up contracts, setting up an LLC, discussing tax deductions, you name it, in exchange for a commission when the deal is complete. It's a surprisingly big job.

Frankly, this job is too big for a professional pilot with no aircraft sales or management experience to take on. It's kind of like asking on the internet for help buying a house. Honestly, I'd love to help, but I only work with owner-flown aircraft. You need to find someone like me in the turbine world.
Click to expand...
What he said.

You guys have no idea. Lots of things to be covered including:

-shade tree king air contract pilots vs. salaried professionals.
-shade tree king air AMT's and associated 'shops' vs. a salaried DOM with years of turbine experience.
-shade tree 'airplane manager/pilots vs. real management or contract management.
-realistic maintenance budget of a Jurassic airframe.
-realistic insurance numbers.

This is just the beginning.

Whatever you do, don't get an MU-2. NOT for beginners. Period.
 
cezzna said:
What he said.

You guys have no idea. Lots of things to be covered including:

-shade tree king air contract pilots vs. salaried professionals.
-shade tree king air AMT's and associated 'shops' vs. a salaried DOM with years of turbine experience.
-shade tree 'airplane manager/pilots vs. real management or contract management.
-realistic maintenance budget of a Jurassic airframe.
-realistic insurance numbers.

This is just the beginning.

Whatever you do, don't get an MU-2. NOT for beginners. Period.
Click to expand...

What do you mean we have no idea, all of those have already been listed. You don't need a DOM on a single aircraft department to have good maintenance.

MU-2 is a perfectly fine aircraft operated by a professional pilot, don't listen to pilot wives tales.

mikecweb said:
There are a lot of things to be covered but its not that hard either. Just a lot of diligence and time.
Click to expand...

Exactly, your family member definitely should not go about it by himself, but if he hires a competent professional pilot, he should be able to guide him. I don't think he needs to go with a 3rd party unless he doesn't want to bring on a pilot.
 
While I could not recommend specific numbers, your friend should probably be considering one of the following three options:
1. If his trips are infrequent or erratic: Part 135 On Demand
2. If his trips are more frequent: Fractional (e.g. NetJets)
3. If he flies a lot: Purchasing his own aircraft
Like others have already mentioned, owning your own aircraft is expensive and complicated. If you've never done it before, there are a lot of pitfalls and unknown expenses. Charter/fractional take away a lot of the risk and are a good way to get your feet wet.
 
Don't forget the Twin Commander 1000. (AC95) You can get them pretty cheap and they'll outrun every king air ever built, have more range(6 hours) and use less fuel doing it. Seating for 8 very comfortably. I think you can stuff like 14 in them though.
You can get the commander 690's even cheaper and while it's still faster than a king air 200, it doesn't have seats for as many people.

Best idea in all of this might be to talk to a management company. Have someone else manage it and supply the pilots, then let them put it on their charter certificate to make back some of the cost. That's what our company does with a few owners.

I'd also look into a Cessna Conquest II before a King Air, but that's just me. In the end it would come down to a list of airplanes that can do 80% of the missions and then have their fixed and variable costs next to each other, the cheapest winning.
 
z987k said:
I'd also look into a Cessna Conquest II before a King Air, but that's just me. In the end it would come down to a list of airplanes that can do 80% of the missions and then have their fixed and variable costs next to each other, the cheapest winning.
Click to expand...
Most Conquest IIs on the market are a million and up. The low end will get you a 10K+ cycle maintenance pig for 800K. But for the money, you can't find a better turboprop IMHO.
 
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