Put your plane to work for you.
American Flight Schools is expanding and always interested in adding great new aircraft to our rental fleet. Every month we’re adding new club members, creating more and more demand for our aircraft. If you have an airplane and you’d like to start making money with it, we’d like to talk leasebacks.
What is a Leaseback?
A leaseback is basically a marketing agreement. Under this agreement, American Flight Schools serves in the role of asset manager. The aircraft is owned by the individual, while American Flight Schools is responsible for marketing the aircraft, introducing qualified, well trained pilots, managing all financial transactions, coordinating maintenance, and ensuring the aircraft meets all regulatory requirements.
Why leaseback with American Flight Schools?
American Flight Schools is a seasoned flight school and rental club with a well established customer base and reach across a wide demographic. American Flight Schools’ philosophy revolves around a basic commitment to excellence. This applies not only to flight instruction but also to all aspects of our business, including our aircraft fleet.
If you’ve done any research into aircraft leasebacks, then you’ve probably heard some horror stories about unscrupulous FBOs, airplanes sitting idle, or outrageous maintenance charges. American Flight Schools is quite different in all three of these areas. We have a well-established reputation for operating with the highest standard of integrity; we have our own in-house parts and maintenance department that not only ensures a high standard of aircraft maintenance, but also offers the lowest costs around.
When does a leaseback make sense?
While everyone’s personal situation is different, here are just some of the reasons to consider putting an airplane on leaseback.
- You want to own an airplane, but you can’t afford to own it outright.
- You are in a position to take advantage of the tax advantages of owning an airplane.
- You own an airplane, but it is not flying enough. Airplanes should be flown regularly to keep them healthy.
- You want to make your aircraft an asset instead of a liability.
- You would like to reduce your flying costs.
- You have some specific training objectives, and would rather pay yourself for training, rather than someone else.
- You have multiple family members that want to learn to fly .
- You want to be in the Aviation Business.
How does a leaseback work?
Again, the leaseback is basically a management agreement involving an aircraft you own. You provide us with your airplane. We collect all the revenue. We pay all the expenses. At the end of each month we cut you a check if revenue exceeds expenses. If expenses exceed revenue, we send you a bill. We take care of everything for you; so don’t have to worry about all the tedious details of aircraft ownership. In exchange for our services, we charge a modest management fee. Of course, just like all other expenses, the management fee is deducted from the revenue.
While results vary, it is fairly typical for our aircraft owners to receive checks in the range of $1,500 each month. Some aircraft owners are regularly receiving twice or even three times that. Of course there are exceptions. Some airplanes just do not fly as much as others, and some are plagued with maintenance issues that lead to extended down times and unusually high maintenance bills. Additionally, aircraft owners should set aside part of their profits to cover unexpected maintenance “surprises”, as well as the more predictable maintenance expenses such as engine overhauls.
What are the pros and cons of aircraft leaseback?
- Your fixed costs (tie down, insurance) are typically paid for.
- You may use the aircraft for the cost of fuel alone (typically around $50-75/hr).
- You will gain equity in an aircraft as it works, often paying for an aircraft completely in 4-5 years of service.
- Potential for excellent positive cash flow.
- Significant accelerated depreciation tax credits. (up to $500,000 in the first year, exceeding your actual outlay by a factor of 10)
- Poor airframes may generate maintenance “surprises” to the tune of many thousands of dollars to repair.
- Flight Training service is rigorous and will accelerate wear on the aircraft. Many of our planes fly 500 hours per year or more. Our most popular airplane flew 650 hours last year! The fleet average is just about 350 hours per year.
- You’ll have to schedule your flights in the aircraft just like any other renter. You’ll lose the flexibility of flying your airplane whenever you want.
Leasebacks are highly variable investments and are not for everyone. The decision to put an aircraft into a leaseback should be considered carefully. We track the financial performance of all our aircraft, and have detailed historical data to help make informed decisions. If you think a leaseback is something you might consider, please contact us for more details. We’ll be happy to work with you to predict the revenue, expense, and overall performance of your aircraft in our fleet. We can also help you purchase the right aircraft and to set your aircraft’s rental rate to maximize your profits. After all… we cannot be successful as a flying club unless our aircraft owners are successful.