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Opening up a flight school vs buying one?

Old 05-11-2015, 08:07 PM
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Default Opening up a flight school vs buying one?

Hey everyone,

So currently in a situation where a private investor is interested in either buying a flight school or opening up one. Just wanted to know if anyone had any background in this and what would be easier, money isn’t a big deal and also how would we go about doing this? Yes we are both pilots.

Thanks.
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Old 05-11-2015, 10:55 PM
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Originally Posted by Ryanthepilot View Post
Hey everyone,

So currently in a situation where a private investor is interested in either buying a flight school or opening up one. Just wanted to know if anyone had any background in this and what would be easier, money isn’t a big deal and also how would we go about doing this? Yes we are both pilots.

Thanks.
Unless you are both mechanics I wouldn't do it. Maintenance will eat up your profit. I'm an independent instructor and some of my students rent from a small mom and pop (7 planes including a twin). The school flys about 400hrs a month or on average. He makes his money off maintenance (his own planes and other people). I've seen the books and you are lucky to make $25/hr after subtracting all costs (fuel, oil, insurance, engine reserve, depreciation, etc). Once you subtract fixed costs like a building/hangar, utilities and insurance there isn't much left. Also, expect the unexpected. It's hard to budget for things like when an engine develops a crack in the case after a few hundred hours and requires an overhaul to the tune of $15-18000 on a little 172. This happened to the owner a few weeks ago. Students/renters are HARD on planes. You go through tires like chewing gum and things break constantly. In my area a good IA charges $90+/ hr for labor.

Also, it's inevitable that eventually someone will bend a prop or God forbid have a serious accident then turn around and sue you. The insurance will pay out then turn around and jack up your premiums.

The only other schools that make money are large and have tied up millions of dollars that train foreign pilots.

I've kicked this idea around many times but the reward isn't worth the risk IMHO. If you had say $600K to invest and just invested in a conservative stock/bond for the next 20 years that yielded a 7% return it would grow to over 2.3 million dollars.

Sadly, general aviation is a slow death in the US. Costs are going up but the rental rates are not accordingly. It's just becoming too expensive. If you want to make money in GA move overseas (China) and set up shop. Just look at Cessna and Cirrus.
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Old 05-12-2015, 04:26 AM
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If you're looking at Part 141, there's value in the certification that maybe worth something. Part 61, just open it yourself.

If your investor is you or your dad, listen to the first responder. Flight schools can make money, in the right market, in the right time, for a certain period of time. Only two schools during my entire 30 years of aviation are still in business in Southern California.

It's a tough business and most people lose money and at best, break even.
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Old 05-14-2015, 05:33 PM
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I'd say that buying one may be worth the trouble of going through all of the motions and jumping through the hoops to get your 141 setup. It really would depend on the price I guess. Definitely have all of your ducks in a row before pulling the trigger. I lease my airplane to a busy and profitable school. They have about 13 planes and the school only owns two of them. They have their own maintenance and also run the FBO so that could be the reason but they have been around 20 years or so and doing well. With that said when I was looking for someplace to lease my plane I also saw a lot of schools that were struggling. I think a school is only as good as their Chief and Marketing Department.
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Old 05-25-2015, 09:32 AM
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Never ceases to amaze me how pilots love to make bad investments.

Take it from someone who was in the business - not a good money maker.
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Old 05-27-2015, 03:37 PM
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As a captain with Fedex my copilot and I were operating a flight for our company from Narita, Japan to Shanghai and then back over to Osaka, Japan. Someone had left a copy of Proffessional Pilot on board. After level off I began to scan through the magazine and noticed a quick article of how one older gentleman financed his grandson's private pilot license. Don't recall if it was part 141 or 61 but blew my mind was that the total cost for the PPL was $15,000 dollars. I think he did it with somewhere between 60 to 70 hours. Average cost per hour was over $200 dollars in a older C172.

When I was learning to fly out of Houston Hobby back in 1972 my PPL cost me about 3 to 3.5K, and I paid for it myself working construction on the Houston ship channel. I realize inflation counts but one factor I always use as a comparison is that I was able to finance my own flying (PPL, Commercial, instrument, and Multi) all on my own without outside finance of any kind from anywhere. Nowadays that is not so for many kids trying to join the ranks of airmen.

IMHO general Aviation is in a slow death and has about 30 years left. After that it will be just a rich mans game like Europe. I own a Comanche 250 and fly it for fun and travel. My airplane was built in 1963. As the fleet of GA gets older and older these airplanes will eventually drop out of service. Add the lost of Avgas or swapping your airplane over to a diesel will only accelerate this problem. Oh there will still be private planes like your half a million dollar Cirrus and 200K Cessna Skyhawks but the bulk of GA will be gone. Sad.
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Old 05-28-2015, 02:57 AM
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Originally Posted by JetJocF14 View Post
As a captain with Fedex my copilot and I were operating a flight for our company from Narita, Japan to Shanghai and then back over to Osaka, Japan. Someone had left a copy of Proffessional Pilot on board. After level off I began to scan through the magazine and noticed a quick article of how one older gentleman financed his grandson's private pilot license. Don't recall if it was part 141 or 61 but blew my mind was that the total cost for the PPL was $15,000 dollars. I think he did it with somewhere between 60 to 70 hours. Average cost per hour was over $200 dollars in a older C172.

When I was learning to fly out of Houston Hobby back in 1972 my PPL cost me about 3 to 3.5K, and I paid for it myself working construction on the Houston ship channel. I realize inflation counts but one factor I always use as a comparison is that I was able to finance my own flying (PPL, Commercial, instrument, and Multi) all on my own without outside finance of any kind from anywhere. Nowadays that is not so for many kids trying to join the ranks of airmen.

IMHO general Aviation is in a slow death and has about 30 years left. After that it will be just a rich mans game like Europe. I own a Comanche 250 and fly it for fun and travel. My airplane was built in 1963. As the fleet of GA gets older and older these airplanes will eventually drop out of service. Add the lost of Avgas or swapping your airplane over to a diesel will only accelerate this problem. Oh there will still be private planes like your half a million dollar Cirrus and 200K Cessna Skyhawks but the bulk of GA will be gone. Sad.
Based on the cost you paid back in 1972, a $15,000 PPL would be considered a good deal. $3,500 in 1972 would be nearly $20k in todays money.
The real problem with GA as I see it is two fold. The middle class has lost a lot of it's spending money and there are more hobbies affordable hobbies available to people today that compete for attention.
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Old 05-29-2015, 09:30 AM
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The GA cost go out of hand so that's why light-sport was born.

Perhaps with avgas so high maybe gliders will become popular.
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Old 05-29-2015, 06:24 PM
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Originally Posted by Flyhayes View Post
Based on the cost you paid back in 1972, a $15,000 PPL would be considered a good deal. $3,500 in 1972 would be nearly $20k in todays money.
The real problem with GA as I see it is two fold. The middle class has lost a lot of it's spending money and there are more hobbies affordable hobbies available to people today that compete for attention.
Your premise may be real when adjusting for inflation, however one thing stands out, is it that a high schooler earned enough money to earns his PPL in six months back in 1972 and today how is that same kid going to earn between 15-20K in six months. Illegal activity not included.
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