Joining a group
Introduction
There are advantages and disadvantages to owning an aircraft, either outright or as part of a group. Renting allows you to book, turn up, and fly, with no other responsibilities, and allows you to use a number of different aircraft.With ownership, you get to use one aircraft and therefore learn its character. You usually get to fly a much nicer aeroplane than the club hacks.
Owning is generally cheaper than renting if you do enough hours, but "do the numbers" to see if the group will really save you money. Don’t assume you’ll fly twice as many hours in a group as you did before!
This article mostly poses questions: things to think about before making the commitment to buy into a group. Aircraft ownership can be very rewarding, but it is not without its pitfalls.
The aircraft
Is the aircraft suitable for your intended use? Enough seats, enough payload? Aerobatic? Can it operate from a short grass strip? For long-distance touring, fast retractables have their advantages, but can be more costly to operate and may not be suitable for grass operation.Will you be able to fly it? If it has retractable gear, variable pitch prop, turbocharging, pressurisation, or tail wheel then you will need to have had some "differences training" to fly it.
How about the particular aircraft's condition, equipment, and value? The better the equipment, and the better the condition, the higher the likely value and the higher the cost of the share. Is it suitably equipped - for IMC for example? Adding equipment is expensive, and the cost will not necessarily be reflected in the aircraft's value; conversely, having equipment you don't need and won't use adds cost, and of course, weight. If you plan to fly in IMC in controlled airspace, is the navigation equipment FM immune?
If the share value isn't high, you may be happy looking round the aircraft yourself and checking the maintenance records. Otherwise you may want to get a professional opinion of its condition.
How much has the aircraft flown in the last year? How many days did it fly, how many did it stay on the ground? Sitting on the ground for several weeks is not good for aircraft.
Does it have a Private or Public Transport C of A? The CAA rules have changed recently, but basically you cannot pay an instructor to teach you towards a rating on a Private Cat aircraft. You can pay him to take you for a renewal flight test in one. On a public C of A, almost all the maintenance has to be done (or at least signed off) by a licensed engineer. If it's on a Private C of A, who does the maintenance? If the members, do they have experience or qualifications that will give you confidence in the quality of the work?
When is the next Star Annual due (every three years) - potentially expensive. Are there any recent Airworthiness Directives (ADs) on the type which could cost a lot?
The members
Does each member have an equal share in the aircraft, or does one have a controlling interest of some sort? Or is it a rental arrangement? There can be advantages with this, but you should be clear before joining.How many members? If there are many, availability may be poor. For example, ten active members means only three days a month each, and only one Saturday or Sunday every five weeks. However, if some members fly infrequently, or who work weekends and fly during the week, then availability might still be good. Are there limits on weekend use or hours per month; could you take the aircraft for a fortnight (or conversely, might you find the aircraft away for a fortnight at a time?).
What sort of flying do they do? If everyone likes to just fly locally for an hour or two at a time, then several can use the aircraft in one day. If people like to go for day trips, can you share flights - if two of you go, you effectively get to do the trip for half price.
Will you get on with them? Some suggest that you should meet the whole group socially before making a decision. Would you trust them with a large chunk of your money? If not, walk away!
The costs
What is the purchase price for the share? In general, the share represents a fraction of the value of the aircraft, so do the sums. If a one tenth share (ie nine other members) is 5k, is the aircraft worth about 50k? You may be able to buy into a group for less than the share value, but this usually means that the seller needs the cash. You should also assess the impact on your personal finances - you may not be able to sell the share at short notice if you needed to.How are the rates worked out? They should consist of a "fixed monthly rate" for the costs that are independent of flying hours such as parking, annual and C of A inspections, insurance, and an "hourly rate" for the flying-hours-related costs such as fuel, oil, 50 and 150-hour checks. Are the hourly rates wet or dry? Dry rates are lower than wet rates, but that's because they exclude fuel which you pay for. If your circumstances change and you need to sell the share but can't find a buyer, you will still be responsible for the monthly charges.
How is flying time charged? The least contentious is by tacho hour – there is no argument about how much engine time you have used. Hobbs meters encourage fast taxying and abbreviated checks, which is not safe or good for the aircraft. Logged times allow an unscrupulous group member to cheat.
The group is responsible for unexpected costs (such as new avionics, or major mechanical work). You could be asked for several thousand pounds at some future date, and need to find it within a week.
Look at the group accounts and the aircraft logbook. The accounts should show income about matching expenditure in the long term, and a surplus in reserve to meet things like servicing/inspection costs. There should also be a separate engine fund. The closer it is to being replaced, the larger the fund should be.
The admin
How is the group run (or to be run)? Is it "democratic", or is one person in charge? One "gaffer" can be good, but like all dictatorships it may be stable for many years, or suffer from permanent civil war. Limited Company groups have advantages in this respect, because they are forced by Company law to run properly.Is the group heading for trouble? For example, the CAA requires the logbooks to be written up no later than seven days after a flight. If the "log book keeper" lives a long way away, that may not be happening. This could cause problems in the future.
Do the members share duties? Is there a clear responsibility for organising tasks such as maintenance, insurance, hangarage etc? If one person does everything, will the group collapse if that person leaves?
Cleaning is the most likely cause of group warfare. A rota will lead to complaints by the perfectionist that another cleaner didn’t do the job properly. One resolution of this is to pay someone capable and meticulous to clean the aircraft. This is likely to cost £60 – 100 a time, and will need to be done about ten times a year.
Ask to see a copy of the group rules. Do they have a policy on disagreements? If they don't, walk away!
How easy is it to book the aircraft? Internet booking systems are available and are popular with groups whose members are all on the Internet.
What are the currency and experience requirements? Typically there will be a rule that says you can't fly the aircraft solo if you haven't flown it or another of the same or similar type in the last so many days. If you are out of currency, what are the arrangements? Typically this will require a checkout with another group member. Some restrictions may be imposed by the insurance company, and a common requirement is for 100 hours total time and an IMC rating.
What if you want or need to get out. Does the group buy the share back? Does the group advertise the share. If so who pays? Or is it all down to you?
Are there any arrangements for "temporary difficulties" - lost job, that sort of thing? What if a bank or other creditor insists on the aircraft being sold - perhaps a group member has got into financial difficulties?
The insurance
Be sure to know what the terms are, and what exclusions apply. Some airfields require significant third party cover on any aircraft using them, not all policies provide the level of cover required at some fields.Premiums vary wildly. It is vital to get several quotations before deciding which the group should take. Typically, a group of six pilots with more than 150 hours on a typical single-engined aircraft should be paying around £1,500 per annum. Complex types (eg Arrows) will pay a little more.
You also need to consider the situation if the insurance company won't pay up (someone breached a restriction in the policy for example, or flew illegally), or the value isn't sufficient to cover a claim. Typically all the group members will be jointly and severally liable - which means that someone may sue the entire group, or just pick out the one that seems to have the most money. This isn't something that is 100% avoidable, nor is it likely, but it is wise to know what the potential risks are. Limited companies give the directors some protection, but again this isn't 100% safe.
The material in this article is based largely on a post from Simon Hobson in May 2001. Additional material from Keith Jillings.
