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From: djmolny@wnuxb.UUCP (DJ Molny)
Newsgroups: net.aviation
Subject: Re: Costs of Ownership:  A Case History
Message-ID: <480@wnuxb.UUCP>
Date: Thu, 11-Apr-85 14:07:46 EST
Article-I.D.: wnuxb.480
Posted: Thu Apr 11 14:07:46 1985
Date-Received: Sat, 13-Apr-85 03:18:08 EST
References: <595@ssc-vax.UUCP> <173@azure.UUCP>
Reply-To: djmolny@wnuxb.UUCP (DJ Molny)
Distribution: net
Organization: AT&T - Something or Other (Ex-CSD), IL
Lines: 43
Summary: 


The enjoyment I get from flying is enough to justify the costs to me,
but banks and spouses often demand a more detailed accounting.

As Aaron Friend suggests, it is important to consider the opportunity cost
and variable maintenance costs to derive the true price of flying.  I ran a
similar set of calculations while daydreaming about owning a Piper Arrow.

The real killers are the fixed costs, including tie-down, insurance,
annual maintenance, and opportunity cost.  The cost of fuel, engine
overhaul, and 50- or 100-hour inspections pale by comparison.  The real
trick is to amortize these costs over more flying hours.

I've been using the following model:

	cost/hr. = fixed costs / hours flown  +  variable costs
	fixed costs = maintenance + tie-down + opportunity cost/person
		      + insurance * people
	variable costs = fuel + engine overhaul

I glossed over the issue of variable maintenance costs, and decided to
lump it in with the overhaul reserve.  I also made the glib assumption that
insurance costs were $400/person/yr., regardless of the number of partners.
I'd like to hear more realistic numbers from aircraft owners in the audience.

Using the data: overhaul = $5.63/hr.
		tie-down = $480/yr. (Aurora Muni., IL)
		maintenance = $1000/yr. (taken from Aviation Consumer Magazine)
		opportunity cost = $35000 * 8%
		fuel = $18.50 (10 gal./hr. * $1.85/gal.)

With these numbers, I figure a cost of $82.17/hr. for 1 person flying 80 hours,
which drops to $30.98/hr. for 3 people flying 240 hours!  You can't rent a
beat-up 172 for that!

Moral of the story: GET PARTNERS! Obviously, there is a trade-off in
availability, but it shouldn't be too bad with 3 congenial co-owners.

I invite comments on this formula, either by mail or to the net,
since it's a subject near and dear to my heart.

						Regards,
						DJ Molny