Pony Express

Hello all,
I have a "pipe dream" of starting my own part 135 operation. Nothing too fancy just maybe a navajo and a seneca or two. I'm just curious, what factors go into the cost structure of operating a 135. Obviously there's the fixed costs: hangar/facility fees, lease/loan on aircraft, insurance etc. And the variable costs: fuel, maintenance (which could be considered fixed for a few things). Is there anything else?

I figure that maintenance, lets say for a Navajo is roughly $62 ($22/hr for overhaul-$40,000/1800hrs, $3000/100 for 100hr +$10/hr reserve)
Fuel is 24gals avg @ ~$5.25= $126

Then your fixed costs get distributed depending on how much you fly. How many charter operations can fly a piston twin 50 hours a month?
If that's attainable, then 50 hours a month at ~$600/month hangar rental (just a guess) ends up being $12/hr

My question is, for those who have been inside a small part 135, what does insurance end up being? And financing? I realize this may be an impossible question because of the many factors that affect it, but I have nothing to even base a guess off of.

Would a rough estimate of operating costs (Fixed+variable) be around $500-600/hr? That leaves razor thin margins for the administrative costs, pilot pay, etc. How to charter ops. do it?

Thanks for reading

chazbird

Outside of the aircraft operating costs you'll need to budget a lot of time and money upfront. Getting a 135 certificate was never especially easy but now days it'll take at least a year. And that was before the recent sequester - who knows how long it'll take now. Maybe you're better off buying a operator with a certificate.

From my recent exposure to start-up 135's and other 135 small scale charter places (IE piston places) is that some of them sort of don't know how wealthy the wealthy are these days. The potential clients have the $$$, and its for them to charter a King Air vs a Navajo - the money they'd save is a case of really fancy wine, or several bottles of the same at a dinner, well, its nothing to them. And, they know the difference in the airplanes, some of them know what TAWS and other modern safety advancements are.

Pony Express

Thanks for the reply.

So if cost isn't really a bottom-line consideration, I would imagine equipment and location are? It must be hard for a 135 startup to build a clientele.

tiredcfi

You also have to be good at quoting trips on top of everything else listed. You can easily blow all profit out of the water with a bad quote.

Systemized

Don't forget about training costs.

I don't think you could make enough money to justify an operation with just a couple Navajos.

Are you interested in cargo or charter?

Grumble

Buddy of mine owns a single engine 135 operation. Took him a year and a half to get the certificate. When he first approached the FSDO they sat him down for about 2 hours, and basically tried to talk him out of it. After he said he was still in, they were helpful but it still was incredibly difficult.

Read through 135 and look at how much harder multi engine vs single engine is from an operation standpoint. Maint cost per the regs alone are significantly higher than single engine operation. Annual W&B, 100 hour, 50 hour, etc. Direct operating cost is only part of the story. Local operation here has a Seneca II that they have to bill out at over $500/hour. I rarely see that airplane move.

BRUCE FANZ

A few more thoughts,

You will need to own the airplane first,then get it approved.

Wher are you located? Here in the NE the charter biz is seasonal.

Brokers bring business, but for a piston, I would think not much.

Training is a big expense for our Part 135.

Find some op specs and GOM's and read them too.

Pony Express

Either really, although I suppose cargo might be a little bit more consistent right?

Would the same be true for a turboprop such as a PC-12 vs a King Air? Also what happens if you are based near water and want to fly beyond the gliding distance with a single engine (turbine or piston)? For example in south Florida or maybe New England? I would have thought that (potentially) lower insurance costs on a multi might offset the maintenance savings on a single.

Where in the NE are you located? I learned to fly at a small flight school (based in central CT) that did a lot of charters to Martha's Vineyard, Nantucket, Long Island, etc.

I can imagine that training expenses would add up, but for lets say a 2-3 aircraft/ 4-5 pilot operation with low turnover would it still be as substantial?

Thanks everybody this is a great conversation.

Grumble

eCFR — Code of Federal Regulations

xcop

The 24gal. figure are you thinking that is the total fuel burn on a PA-31 or a Pa-34 per hour?