Airplane Ownership Costs
Is owning a airplane cheaper than renting one? After the first year of ownership,
I would say no, the cost is about the same, but I won't have a definite answer until
I sell the airplane and add up what I spent. I tried to calculate ownership costs
months before buying, but didn't have enough information. (The formula is
pretty simple; just divide the total amount spent by the number of hours flown
to get the cost per hour. Then compare that to the rental rate.) The expenses
can be divided into four categories:
- Variable expenses directly related to the hours flown, such as fuel,
oil changes, etc. These can be easily determined.
- Fixed expenses which occur regardless of how much the airplane is
flown, such as insurance, hangar rental, loan interest, state taxes/fees, etc. These
usually are paid on a monthly or yearly basis, and are also easy to calculate.
- Maintenance expenses, which are difficult to estimate because nobody
knows in advance what will need to be done. Annuals vary widely in price, even
for the same model and year, because the amount of work done (and the cost)
will not be the same each time. You can find a cost range for a particular airplane
and use the high end of it for an estimate.
- One-time expenses, other than maintenance, such as
upgrades (paint, interior, avionics), sales tax, license fees, and the gain or loss
on the eventual sale of the airplane.
We can these categories to derive the following formulas:
- Total ownership cost = (variable * hours) + (YearlyFixed * YearsOwned) +
(MonthlyFixed * MonthsOwned) + maintenance + OneTime
- Yearly cost = TotalCost / YearsOwned
- Hourly cost = TotalCost / HoursFlown
It's clear that the more hours flown, the lower the hourly cost, since the
non-variable expenses will be spread over more hours. For example, if a hangar
costs $150/month, a 5 hour/month pilot will spend $30/hour for the hangar, but
the same hangar will cost only $7.50/hour for someone flying 20 hours a month.
I made a spreadsheet for my airplane and came up with a break-even point (where the
costs of owning and renting meet) of 100 hours per year. That amount will vary widely,
but is probably at least that high for most airplanes. Unless you fly much more than
that, it would be hard to justify buying on economics alone. For me it's the
intangible benefits that make the difference. (See Pros and Cons for details.)
Continue to High-Wing vs. Low-Wing.
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