Aircraft management/return on asset?

[SLIPANDSKID]

Hi Everyone,

I have a hypothetical situation on which I would like to hear your opinions and advice.

A company has a gulfstream IV which is not being used. They want to sell the aircraft,however, they can and will hold out till the market becomes more favourable.

What would you do with the aircraft,what would be the most effective way to have the aircraft work for the company?
If an aircraft management agreement was signed with an operator to charter the aircraft.
What sort of usage could be expected in the world market today?
What % return on asset could possibly be retrieved?
What region in the world would you send it to keep it busiest?


Im not in this business,I just want to learn more about it from some guys in the know.

Many thanks
S&S

[No RYR for me]

Answer in the current market: park the airplane as there is no way that you can make money. To have it managed and available in the EU will set you back appr. 900K per annum for a long range aircraft if you do it on the cheap, before you have even flown it! The current charter rates will barely cover the variabel cost and contibute only a little to the management cost and nothing to interest and deprciation cost.

By parking it you will have no risk for large unscheduled maintenance cost, no management fees and only the depreciation and interest cost. Might change in a years time but now just rent a hangar and a good engenireer to look after it in storage

[SLIPANDSKID]

Hi,

Thanks for response.

I assume by the lack of other responses most people agree with you.

What typical costs make up the 900k? What would you expect to get from a management company for this?

Many thanks
S&S

[Miles Magister]

The only way to get a known return is to lease it out in the same style as airliners, however lease rates are likely to be low in terms of a return on capital value.

You may wish to contact GS to see if they have any customers with a short term lease requirement.

MM

[No RYR for me]

900 K covers basic insurance, hangarage, AOC, crewing, crew training and fixed maintenance cost (NOT unscheduled and variabel mx cost)

Again 900K is if basic, you can do it cheaper but would not recommend it.

[hawker750]

Slip and Skid, I think No RYR is way off the mark with 900K.
I assume you have the aircraft anyway, then I assume you have crews. Putting the aircraft with an AOC company would not earn you any return on investment but say 200 hours of charter revenue would probably earn the owner in the region of £400,000 pounds contribution out of which AOC cover and hangarage would be around £150,000. Better than laying the plane up. I have a world wide AOC and a hangar, I would love to operate a G4.

[G-SPOTs Lost]

Did think 900k was on face value a little bit excessive as well... albeit with no experience of the type. Close to a million quid before you go flying......??

Not being arsey just cant get my head around it.

Crew 210K (90+45+35+15% (NI +Pension) Bupa/Lol
Hangarage 80k
Subscriptions 20k
Insurance 60k
Crew Renewals 60k

Leaves 470K for everything else???? and thats on the cheap you reckon

Couldnt really be too bothered digging out my budget to see what categorys Ive missed but think Ive got the major culprits covered

excluding management fees and ops of course thats maybe where the rest went

[No RYR for me]

H750, is the figure from a well known G5 operator that I used to fly for in GVA/ZRH. Includes all fixed mx cost etc as well and a proper double crew plus hosties... That alone set you back more than 210K on crew cost alone. Will dig up the rest of the figures.

[hawker750]

No RYR
I do not think that is what he wants. He just wants it to keep flying instead of it getting mouldy. 1 Captain 1 co-pilot and a couple of freelance hosties. should keep the crew costs down to anout £150K. I have an ace in house engineer to keep the mx costs down To park it in a hangar is expensive, better to get 2-300 hours revenue and perhaps that way he could justify a few trips for himself. We are not talkin about a gold plate operation.

SLIP AND SKID
PM me if you want to talk

[Bruce Wayne]

That's all just wild speculation without knowing at least some of the specifics behind the asset and the asset owner.

[asdf1234]

I think you are all missing a trick here. You need to sell the aircraft NOW and lease it back with a future option to buy-out the lease. The cashflow argument is crystal clear and despite what the doom merchants are saying, banks are lending and are still entering into deals. PM me if you need our help.

[SLIPANDSKID]

Hi,

Thanks for all the responses.

Cash flow isnt a problem for these owners. They bought something bigger and shinier, then pushed the GIV to the back of the toy box.

I wanted some ideas to convince them that they could make money and keep the machine flying while the market recovers for sales prices. However, they are not going to spend 900k or anywhere near it to get it working for them.

Thanks
S&S