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Biography

Paul B. Bartlett is a private pilot, AOPA member, aviation historian, and Internet marketing consultant. Senior producer of award-winning websites for Chevrolet and Buick, he also writes articles for Entrepreneurial magazines, and contributes to many marketing, internet, and aviation forums on Compuserve's online service.

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     Aircraft Ownership for
   mid-level income pilots

     By Paul B Bartlett

I would like to present a new concept that could get thousands of "everyday" pilots into shiny, new aircraft. First of all, let me get past the discussions about outdated technology, "price per pound", and other premises on the value/price of a brand-new aircraft. Price and perceived value can very much be a function of the marketplace, not the physical "cost" of the item for sale. Does a Rolls-Royce automobile contain TEN TIMES the content and skilled labor of a Honda? No. Are there people willing to PAY ten times more for the Rolls? Yes. Therefore the new aircraft market at present is fixed to a small group of buyers who either need or desire the functionality of a new product regardless of price.

The new aircraft market has never been as widespread (which could drive down product price) as the automotive market, due to this small pool of available purchasers. It has also never been as opportune as the housing market, because there is no long-term, low-interest financing available similar to mortgages. 10 year/10% loans are nowhere near the same as 30 year/7% mortgages. I'm not sure why there AREN'T any aircraft "mortgages", as we have all seen that used aircraft appreciate much like homes do.

What this means in the near-term is that aircraft manufacturers pretty much have all the market they're going to get. New aircraft buyers have usually fallen into one of three major groups: Corporations, Professionals with generous amounts of disposable income, and "blue-collar" individuals who sacrifice their lifestyle to purchase and maintain an aircraft. Note that used aircraft are excluded here, because there are endless variations on the owners and aircraft in that market.

The new aircraft market will grow slightly as the world population and economy grow, but it will always leave behind the vast majority of licensed pilots who cannot afford the outright purchase of a new aircraft. This leaves manufacturers preying on each other to gain market "share", I.E. grabbing each other's existing customers, rather than gaining any new ones. So if you are like me, and cannot buy something expensive just because you want it, yet as a pilot you would prefer a newer aircraft for the safety, comfort, and functionality, I would like to propose an alternative method of getting behind that brand-new yoke.

This new program would be a combination leasing/club program. I will outline some of the details, but first realize that the aircraft manufacturers have no motivation to provide such a program -- they have their market, and are supplying it. Us "Middle-Class" pilots will have to look to a new company, something like a financial services company, or an existing leasing company to provide this concept for us.

Most of us are familiar with leasing automobiles, office equipment, or other machinery. Leases basically allow us to pay only for the use we get out of something, rather than investing in the physical value of an item. Many pilots are also familiar with the partial ownership programs that exist for business jets. A very expensive jet is split up between various owners who sign up for a percentage of the aircraft's cost, and subscribe to a usage schedule. A combination of the two for general aviation aircraft would allow thousands of pilots to experience affordable aircraft usage, not as individuals, but as close as the market is going to allow.

This is different than the old scheme of purchasing an aircraft, and leasing it back to an FBO for training or rentals. That was always a limited opportunity, with a lot of problems in under or over-utilization and other problems of the economics getting in the way of using one's aircraft. A modern leasing program would be managed by a leasing company, not the pilot/owners. The leasing company would purchase a fleet of aircraft, basing them at appropriate airports, perhaps even having ferry pilots to make the aircraft more accessible on occasion to more airports, allowing pilots to lease usage of these aircraft on a yearly basis. If a pilot was based at a large enough facility, he might even have a certain amount of exclusivity to a particular airplane.

In order to attract leasing companies to this program, they could include scheduled maintenance into the lease price, and possibly even roll special rates for insurance and annual inspections into the lease price. The general idea is to get costs allocated toward a fleet of aircraft for "bulk" discounting purposes (further lowering monthly pilot costs), then lowering the monthly lease payment for individuals by splitting it among multiple pilots.

Further services for lessees from the leasing company could include aircraft cleaning, travel planning, and pilot/aircraft accessories. In order for this to be an attractive proposition for the financiers of such a program, it must be pointed out that they would be building their own built-in market -- those pilots who now are a kind of lost sheep, renting, borrowing, or owning used aircraft. By providing a new aircraft, they will instill a pride of "ownership" that will encourage pilots to purchase further goods and services. Many businesses, such as car dealers, gun dealers, and other retailers make a large share of their profits from accessory goods and services, rather than the sale of their "main" item, yet general aviation seems to be missing businesses in this model.

What will be needed from prospective pilot/lessees is a "businessman's " attitude toward aviation: Yes, "your" aircraft will be used by other pilots, and may not be available every single time you need it, but there is really no other way that the mid-level income pilot is ever going to get into a new aircraft. The "bizjet-share" owners do the same thing with bigger toys.

This is far from the "perfect" solution, but my research into the future of general aviation aircraft shows that they are only going to get more expensive, with new "glass cockpits", small turbine engines, and other costly advancements.

I for one, am tired of waiting to hit the lottery to fly a nice airplane. I want to work hard, earn a good living, and fly an aircraft that isn't older than I am. And with the right business model, it's entirely possible, we just have to get together as fellow pilots, figure out the details, and demand it.
 

Paul B. Bartlett

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