Flat Rate flying: Is it feasible? seeking the community feedback for help

The discussion is as follows:

 

The issue of  dues to include flight hours has been raised and contemplated by 9 of our members.  The issue is almost split with 5 for the amendment or at least talking about a rate change and 4 who want our dues and rates to remain the same. 

 

About a month ago, I met with Clark and we looked at PGAA expenses and maintenance costs.  Clark came up with a model that I disagreed with so we agreed to poll our group for comments.  I sent out a 10 question survey and 9 members responded.  It turns out our members are split nearly right down the middle; 5 members for a change and 4 members want the status quo.  We are asking for your input on 2 concerns: 

 

1.       Do you think “Our current due structure is adequate and fair.” (4 members do)

2.       Do you think our club could lower the cost of flying by changing our fee structure?  5 members say they would like to have flight hours “of some amount” added to our dues if we raised our monthly dues nominally. 

 

Here is PGAA’s current due structure and the true cost to fly per hour (at our club average).

 

We average, as a club, 2 hours per member of flight per month:  Based on this two hour average, it costs our members $192.00 per hour wet (archers) to fly:

$185 dues

$50 hour plane time

$50 hour fuel

 

2 hours of flight costs: $185.00 dues + $100 plane time + $100 fuel = $385.00 /2 = $192.5 per hour Wet. 

 

Executive flyers rates http://learntoflysacramento.com/aircraft-rental-rates-executive-fly...  wet rates –Cessna 172 - $115 hour wet, Cessna 172SPG (G1000) $189 Wet

 

Now let’s double the amount of flying in this model to 4 hours a month in order to see how our costs go down.  Here is the math.

 

$185 dues

$50 hour plane time

$50 hour fuel

 

Four hours of flight time (Nearly double the club average) $185 club dues + $200 in flight time+ $200 in fuel = $585 for four hours of flight.  $585/4 =$146.00 hour.  This means if you fly 4 hours a month your hourly rate just went down.  Interesting right? 

 

Now consider this.  What happens to this model when you don’t fly for a month?

 

If you don’t fly for a month your cost to fly just jumped to $285 per hour wet for the archer for the first 2 hours and to nearly $200 per hour wet for the archer, if you fly four hours. 

 

Now what happens if you don’t fly for 2 months?  Your two hours of flight just cost you $400 per hour wet!  How is this fair?  It’s not and we need to seriously look at fixing this. 

 

Especially when a simple plan of $295 a month would bring in 60K in income per year and far surpass our current revenue model, while at the same time lower the overall cost to fly. 

 

Here are the real numbers (I have attached them for your viewing pleasure).    Our TOTAL cost last year for all of our planes was $30,288 and we brought in around $37,000 in total billings for the group.  This means that even at our current rates we are all going to get assessed when one of these planes needs an engine overhaul, contrary to what’s being touted now.  Please do the math on your own, how long is it going to take to save $20,000 for a major overhaul at $7,000 per year.  It will take the same three years to have enough money to overhaul ALL three planes engines without an assessment.  If we increase our dues only $110.00 a month while including a minimum of 4 hours of flight thrown in we raise enough money to be comfortable when the time to overhaul is upon us.   

 

Don’t think for one second $7K is enough to pay for an overhaul without an assessment, but $30K a year is.  And the argument, “well we won’t need one for nearly twice as long,” is equally as unsound.   

 

 

Here is the kicker, we each average 2 hours of flight time per member per month.  This equates to 17 * 2 = 34 hours a month divided by 3 planes = or about 11.3 hours per month in each plane.  This is excruciatingly low and all of our planes are all underutilized.  Why?   I have already sent a link from the AOPA website that shows the cost of flying goes down to almost $11.00 per hour when you fly a 1970 Cessna 172 for 300 hours per year.  Compared against, if you fly it 100 hours the cost goes up to $25.00 an hour.  You got the math right the cost goes Down not up the more you fly them. 

 

It has been suggested that our members will get assessed with the proposed model.  The problem is, we are ALL going to get assessed with the current model.  We need more money coming in to pay for the replacement of these engines in 3-5 years.  $7K a year won’t cut it(our current model), but $30,000 more a year will (proposed model). 

 

Here is the sell:

 

If we raise our dues to $295.00 month and at the very least include 4 hours of flight time included in those dues and then charge $11.00 per hour thereafter, we would be doing our entire club a huge service in three distinct areas:

1.       Get the full utility out of our planes – which will lower maintenance costs.

2.       Competitive with other clubs at $123 per hour (wet) for 4 hours

3.       And raise over $60,000 in annual dues which would adequately cover engine replacements without member assessments. 

 

 

Please take the survey, which is for 10 hours.  We are now contemplating 4 hours at the very very least.  I am proposing to our members that we raise our dues to $295.00 a month, include 4 hours of flight time and charge a nominal $11.00 per hour to fly thereafter for ALL of our planes.

 

I am looking for support of this plan and I would like to ask each of our members to consider this change.  All we need to change our fee structure is to have a majority vote by our members.  There is nothing in our corporation that says we have to wait.  Please look at the numbers and then ask yourself are the current dues fair or can we do better? 

Views: 49

Reply to This

Advertise Here

Advertisers

SUPPORT OUR ADVERTISERS:

© 2017                                                                                                             HangarChat  |  About  |  Advertising  |   Powered by

Promote  |  Help & Support  |  Terms of Service