Most Profitable Charter Aircraft
#21
If you were going to start a charter company from scratch, what would be the top 2-3 airplanes you would want to use? I currently manage a King Air C90 that I could lease at a very reasonable price. Is this usually a profitable charter plane? What are a few others you guys would recommend?
I won't go into more tedious detail, but there's a lot of it, and the FAA isn't impressed if details slip through the cracks.
From a business standpoint, it is very difficult to generate a steady cash flow sufficient to pay operating expenses with a little profit, with one airplane -- unless you have some contract that guarantees sufficient flying to crack the nut. And then, what if the airplane sticks its tongue out at you, and you have to charter out to serve your contract customer? It ain't easy, it takes a good-size capital reserve when you start, and you may wind up losing your . . . uhh . . . assets if fortune doesn't smile on you.
If you're going to do it, develop a comprehensive business plan, including contingency options, have it reviewed by someone who knows what they're doing, and then . . . good luck!
#24
As was said earlier....
Why would someone pay $2400 an hour for an airplane when they can get the same exact airplane for $2100 an hour who has a corporate owner who can afford the cost of the airplane?
There are thousands of airplanes owned by a guy that uses them one day per week. The other six days, he finds a management company who HAS a 135 ticket, leases it to them at DOC plus 10-20%. The management company charters it out at 80% of the break even point of a company owned aircraft. The owner cuts his costs (the 10-20%) offsets his fixed costs. The Management company makes money off the owner because they ARE part of the airplane's fixed costs.
I knew an guy (A&P, Comm ASEL/MEL) who EVENTUALLY made a little money starting his own 135 gig. He started out by buying a 310 (similar to this C310 for Sale: $52K) that was out of annual and had a couple issues. He did the annual himself, fixed the issues, pulled out the seats, and did hot-shot cargo. It took him about 18 months to get the 135 ticket and a few regular customers. About that time he was breaking even. A year or so later, he had several customers and was making some money. Keep in mind, his mx labor cost was zero (he did it in his off time), and he flew the plane himself.
BUT... now he can work on finding an owner who needs to offset the ownership costs, and offer to put the owner's plane on HIS 135 ticket. Or, when he finds the next run out 310, he can buy it, fix it up, and add it to his fleet.... but then he would need a second pilot (and the costs rise). Or, he could sell his first plane for a profit since it is 135 "certified".
Why would someone pay $2400 an hour for an airplane when they can get the same exact airplane for $2100 an hour who has a corporate owner who can afford the cost of the airplane?
There are thousands of airplanes owned by a guy that uses them one day per week. The other six days, he finds a management company who HAS a 135 ticket, leases it to them at DOC plus 10-20%. The management company charters it out at 80% of the break even point of a company owned aircraft. The owner cuts his costs (the 10-20%) offsets his fixed costs. The Management company makes money off the owner because they ARE part of the airplane's fixed costs.
I knew an guy (A&P, Comm ASEL/MEL) who EVENTUALLY made a little money starting his own 135 gig. He started out by buying a 310 (similar to this C310 for Sale: $52K) that was out of annual and had a couple issues. He did the annual himself, fixed the issues, pulled out the seats, and did hot-shot cargo. It took him about 18 months to get the 135 ticket and a few regular customers. About that time he was breaking even. A year or so later, he had several customers and was making some money. Keep in mind, his mx labor cost was zero (he did it in his off time), and he flew the plane himself.
BUT... now he can work on finding an owner who needs to offset the ownership costs, and offer to put the owner's plane on HIS 135 ticket. Or, when he finds the next run out 310, he can buy it, fix it up, and add it to his fleet.... but then he would need a second pilot (and the costs rise). Or, he could sell his first plane for a profit since it is 135 "certified".
#25
Gets Weekends Off
Joined APC: Jan 2009
Position: 737 Left
Posts: 1,824
The only aircraft that I have seen that have made a profit are the ones that are paid for. Otherwise, the bank always gets the profit you would have made in the form of interest. The bank will charge you 6 to 12 percent. In aviation, that is a pretty good profit margin.
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