Economic crisis - flying and plane ownership

[vanHorck]

Of course we had the fuel going sky high
Then there was the credit crunch in the USA and Northern Rock in the UK
This weekend we had the B&B a well as the Fortis collapses with governments stepping in left right and centre to try and prevent a meltdown

How does it affect you?

Are you a SE owner?
Are you a ME owner?
Are you a private pilot?

What are you thoughts?

I am a ME owner and although I've not put a stop to my flying, it seems much more often than before when I think of flying, the money side comes into my mind and I end up not flying.....

Any comments?

[Rod1]

I moved from an airways equipped 1978 AA5B to a glass cockpit brand new MCR01 I built myself. I am saving £10,000 plus a year and travel faster, short strips etc. Had I not jumped I would be restricted in my hours as I would be struggling to afford it. As it is I have no problems and the market for VLA type aircraft is very strong.

Rod1

[IO540]

I would hope that the fuel price rises have caused at least some pilots to take a second look at that strange red lever which their last instructor told them to never touch otherwise they will fry the engine

That one move is worth about 30% off one's fuel bill. The problem is that some decent instrumentation may have to be fitted: an EDM700 or similar, and a fuel flowmeter. That's a few k.

Flying a little slower also helps, disproportionately.

Personally I carry on as before, while squeezing every last drop out of my engine by very very carefully setting it to 25F LOP for each different stage of flight.

[scooter boy]

running LOP

IO540, I echo your sentiments re leaning. I did Plymouth to Gloucester this morning and ran at 65% LOP best economy cruise as opposed to 75% ROP best power cruise. The trip took me 3 minutes longer and I saved between 3 and 4 usg.

I also buy pretty much all the avgas I burn in my Mooney in the channel islands - saves approx 30% of cost.

My Robinson 44 burns expensive mainland avgas but Plymouth has always been keenly priced for fuel and I am lucky to have them close by.

About the best decision I ever made was getting Monroy long range tanks installed in my Ovation. I can tanker 10h or so endurance with me if I run economically. The CI trips are also very worthwhile for maintaining currency.

The credit crunch has not hit my business (except in the increasing cost of moving around by car, helicopter or plane) and although the bank are encouraging me to sell my Mooney to lift a bit of my debt burden I will only do so if I get offered the asking price.

Rod1 - I had a Europa which like your permit aircraft was fast and economical. It was wonderful cheap flying and although I miss it I could not have used it for much of the fixed wing flying I currently do (night/IFR/v long range). Great fun though if you can pick when to travel.

SB still smiling (through gritted teeth)

[Squeegee Longtail]

"I am a ME owner and although I've not put a stop to my flying, it seems much more often than before when I think of flying, the money side comes into my mind and I end up not flying..... "

That's because you're Dutch!! (ie. Toight)

[Shunter]

Couldn't give a toss about the credit crunch because I don't need credit. Spending more on flying than I ever have and loving every minute of it.

[IO540]

Yes I must agree that this "credit crunch" business is massively over-egged. How many people are taking out an overdraft to pay for their flying, and then have the bank call it in?

[robin]

Well, I've told Mrs Robin that because of the credit crunch, there is no point in selling the toy. We have to hold on to her until the financial climate improves sufficiently for buyers to start crawling out of the woodwork.......

Mind you Mrs Robin might have a bit of value if I could find the right Internet Dating website......

[IO540]

If she is attractive, Mr Robin, then any dating website will do just fine

[Gertrude the Wombat]

Hire charges are going up ...

... must have a word with my clients and put my rate up

[Fuji Abound]

The credit crunch has not hit my business (except in the increasing cost of moving around by car, helicopter or plane) and although the bank are encouraging me to sell my Mooney to lift a bit of my debt burden I will only do so if I get offered the asking price.

Do not under estimate the impact.

It is early days.

However the fallout from the financial sector will appear in terms of mortguages costing significantly more as peoples fixed rate deals expire, employment within the sector will be hard hit causing an increase in unemployment and taxes will rise to meet central government costs. Worse, much worse is to follow. I hope the worst effects of what is taking place never come to pass but do not under estimate how tenious we are.

The barometer is slowly falling. Most were saying a few weeks ago, things dont seem too bad. John Lewis, a long time sound barometer of the retail sector, have for the first time reported the sector is getting tough. Finishing trades in the building industry are still busy as projects complete over the next few months, but the ground workers are already reporting work is short.

Keep a close eye on the barometer, it is falling, you might not yet have noticed, but watch out the pace doesnt gather.

[eharding]

Credit crunch...housing crash...nightmare.

At the start of last year, having been lucky enough to celebrate my 40th year spending 12 months (and all my cash) at the airfield doing nothing but flying, I was strongly tempted to sell the house, buy a Sukhoi and a caravan, park both at the airfield, and continue to live the dream for another couple of years.

As it happens, I went back to an office job, and try to feed the flying habit out of a salary...but after 18 months in an office, I'm convinced I made the wrong decision....you only live once, and what with the housing price collapse and the price of avgas, it's going to have to be the Pitts and a tent rather than the Su26 and a caravan.

Anyone got a tent they can lend me?

[IO540]

I don't think the house price collapse affects anybody who bought a house to actually live in, and can afford to pay the mortgage (if they have one). And if one is moving up in the housing market, one benefits from any price collapse. It just feels psychologically unattractive....

A lot of people over-stretched themselves. The mandatory Mitsubishi Shogun (or whatever its present-day version) and the corresponding lifestyle, financed by a 2nd mortgage.

[wsmempson]

In terms of central London housing in the nice (expensive) bits of town, the price adjustment is happening pretty fast and promises to be brutal. Below £12 miliion (above which is the province of the uber-rich, and life continues as before) prices are down by 15-20% and promise to continue south. By the end of the year, house prices look likely to have fallen as much, in percentage terms, as they did in the three years of 1990-93.

However, given how steeply prices rose between 2005 and the end of 2007, even if prices fall by 50% from the peak of the market, this will simply put prices back to where they were in 2005. Thus, the people who will actually be in risk of negative equity will be those who bought with huge mortgages post summer 2005.

If I look at the demographics of the three flying clubs of which I am a member, I don't see many aircraft owned by under 50's or people who might have bought 'starter-homes' recently so, in a weird sort of way, I reckon the GA scene is curiously insulated from the current economic downturn.

More of a threat to the values of Cessna/Piper/Socata, 30 year old VFR tourers is the arrival of the modern generation of LSA from eastern Europe, which are nicer to fly and cheaper to run.

4 Seat IFR tourers are perhaps likely to remain a bit more robust, subjetc to the residual values and longevity of Cirrus's products.

[Pace]

10540

>I don't think the house price collapse affects anybody who bought a house to actually live in, and can afford to pay the mortgage (if they have one). And if one is moving up in the housing market, one benefits from any price collapse. It just feels psychologically unattractive....<

A big problem has been with "buy to let" where loads of people bought on borrowed money thinking that letting and the forever increasing house prices would allow them to build a portfolio of houses on borrowed money.
Spending more than you have got and encouraged by the financial institutes.

I am lucky I get other people to pay for me to fly their lovely machines well at least I think they are paying me until I dont get paid ;-( as has happened a few times.

I feel sorry for PPLs who have to dig into their pockets at a rate of £120 per hour and it is getting worse. More regulations more costs and fuel which is like liquid gold.

Gliding is sounding more attractive especially as I can fly IFR in them. (only joking) Maybe a little engine for when theres no lift?

But then who knows as governments are prepared to pay billions to support the financial industries they may do the same with aviation.
Think of it no more landing fees, subsidised aviation fuel. Tax free aviation training ..........................

Pace

[PompeyPaul]

I don't need credit

I'm affected by the "credit crunch" though. I hold savings in shares and have effectively seen them wiped out over the last couple of months.

I now fund everything from wages. Thus I have less cash to go around. Don't have a loan, a credit card, or even want any of that stuff. Still feel much poorer though. Although I'd probably go without luxuries like food before I stopped flying

[IO540]

More of a threat to the values of Cessna/Piper/Socata, 30 year old VFR tourers is the arrival of the modern generation of LSA from eastern Europe, which are nicer to fly and cheaper to run.

4 Seat IFR tourers are perhaps likely to remain a bit more robust, subjetc to the residual values and longevity of Cirrus's products.

A little contradiction in the above, as Socata haven't done any VFR-only planes, that I know of, for decades. And the values of used IFR tourers are plummetting anyway.

An interesting question would be to survey how many instrument capable owners of IFR machinery who actually use itare willing to make a permanent move to VFR-only, mainly to save money. I have so far not come across a single one. There are many pilots who could not keep their medicals and went to the NPPL or whatever, but that could happen to any of us and money is irrelevant to that one. There are also many pilots who stopped flying altogether - often because they climbed a long way up the mission capability ladder and eventually ended up with something too big, too complex, too full of hassle and downtime. A vital trick in the ownership game is to stick to a machine which is easily affordable and which is a good match for one's mission requirement.

[Pace]

10540

>An interesting question would be to survey how many instrument capable owners of IFR machinery who actually use itare willing to make a permanent move to VFR-only, mainly to save money. <

This really depends on what you use an aircraft for? If you are a guy/gal who purely wants to nip up for an hour on a sunny day then thats one thing.

If you like going places especially further afield then chances are that the weather is unlikely to be constant the whole route there and back. There is a chance you maybe stuck.

If you fly as a means of transport for business or pleasure then you have to build in a certain degree of reliability. The old saying " time to spare go by air".
You have to reduce the likelyhood of that phrase.

You need to look at IFR capability in both aircraft and pilot. Make flight more reliable still and you have to look at deice/anti ice and multiple systems.

When the Diesel engines came out they seemed to offer the way ahead for cheap flying with amazing range for both singles and twins but suffered with reliability issues.

I felt then that the way forward had to be in low cost, low power, throw away turbines I see the equivalent to 300 hp petrol engine turbine is being developed for the Mooney. Why not 100 hp or 200 hp equivalents in turboprops?

But it is not only the cost of aircraft but all the other costs which go with it that are crippling. At the end of the day an aircraft is a mode of transport like any other. It has to compete on reliability of achieving the journey and the costs have to make sense in comparison to other modes of transport for the same journey.

Otherwise they become extravagant toys which have little practical use and which pilots will get their fix from for as long as they can afford to which will become less and less as costs esculate.

Pace

[Rod1]

“An interesting question would be to survey how many instrument capable owners of IFR machinery who actually use it are willing to make a permanent move to VFR-only, mainly to save money. I have so far not come across a single one.”

The problem with the above statement is the “mainly to save money”. There are 4 IMC (one ex IR) rated pilots at my strip (including me) who have moved to fast modern homebuilt aircraft with Rotax power from fully equipped spam cans (AA5B in my case). We all do long distance touring, including Europe. We all wanted to get more “bang for the buck” which is not quite the same as saving money. Our new aircraft are;

1 New! The aircraft they replaced were all 1970’s so 35 years old.

2 Faster! In every case we now travel significantly faster. My Old AA5, at 75% (lots of fuel even leaned off) would do 125kn, new machine 138kn at 15lph. The others are similar differences. Speed is the biggest restriction in my there and back fun trips.

3 More mission capable. All the new machines have much better STOL, so can operate from a much larger number of strips at MAUW. The aircraft can also operate on Mogas, so not restricted to airfields with expensive Avgas. A man with a can is available at almost any micro strip, anyware.

4 Less formal regulation (at lower cost) We all maintain our own aircraft, which is fun and adds to flight safety (3 of us built our own). We operate from a strip with zero formality and hangar our aircraft at less than 1/3rd of the cost of the local licensed airfield (which has no approach aids)

5 Equipment. We now have a mixture of state of the art glass and various toys which would have cost us £20,000 to £30,000 to retrofit into our old aircraft.

We have all given up;

1 Night flight, but none of us used it much anyway.

2 IFR. 15 years ago I would have balked at this. However, if you tour Europe in an IFR capable aircraft, but with only an IMC, then you are restricted to VFR. Two things fall out of this. Firstly, you manage to tour VFR with few problems and realize you can apply this in the UK. The VFR rules are very flexible and an IMC rated pilot in a well equipped hombuilt can operate in poor VFR conditions quite safely. Secondly, in Europe, if you replace the IFR tourer with a well equipped hombuilt it makes no difference unless you have an IR, which almost nobody has.

3 Money. In all cases our new aircraft cost us more than our old aircraft were worth. OK we are saving £10,000 a year plus, but we had to make the investment.

4 We have gone from 4 seats to 2. I keep a record of passengers carried and this has never been an issue. I originally intended to hire a local DR400 if I needed 4 seats, but I have never needed to do this.

I would however point out that we are all fun flyers, who almost never use our aircraft for work purposes. All the aircraft fall into the VLA category, so not Micros.

Rod1

[Pace]

Rod1

What do you fly? I take your point if you hold a UK IMC rating and tour abroad, but yours is fun flying rather than have to be there flying.

Do not see why the CAA cannot allow VLAs and homebuilts to fly in IMC as they let gliders do that ? Double standards.

Pace