Offsetting Aircraft Ownership Expenses Essay

712 words - 3 pages

If you only fly once or twice a year, Schubach Aviation owns and manages an extensive fleet of aircraft for on-demand charter services. When you’re in the air and on the move more frequently, full ownership makes more sense from a fiscal perspective. The Sherpa Report recommends that anyone flying more than 400 hours per year consider whole ownership over fractional ownership or on-demand services.

The sticker shock of buying your first plane can be mind-numbing. However, the initial acquisition cost is closely followed by ongoing expenditures for hangaring, routine maintenance, crew training and certification, salary and benefits for flight crews and maintenance technicians, insurance, inspections and a host of other necessary expenses to keep your aircraft operating in peak performance.

At first glance, shared-ownership (fractional ownership) might seem financially appealing. But when you consider the initial capital investment -- which can range from a few hundred thousand to more than a million dollars – plus inflight catering, pilot fees, fuel and maintenance, for essentially a rental agreement with availability constraints and limited ROI, private ownership with charter management services has a plethora of benefits.

Personal aircraft require routine maintenance and upkeep in the same way that a luxury automobile requires frequent washing and waxing to protect it from the elements and scheduled inspections to maintain the operating integrity. Even when a plane is housed in a controlled environment, exposure to weather on the tarmac and in flight exposes the craft to potentially harmful elements. The biggest cost of ownership is asset maintenance.

One of the most advantageous strategies to offset costs associated with aircraft ownership is to place the management and operation of the vehicle in the hands of a professional management team.

Filing for Part 135 Certification with a professional management company like Schubach Aviation alleviates many of the maintenance headaches and operational expenses normally assumed by private aircraft owners. Part 135 Certification, issued under Federal Aviation Regulations, allows owners to make their aircraft available for hire when not in use for personal activities.

Standards for operation, maintenance and training are higher under Part 135 than traditional standards. Just one...

Find Another Essay On Offsetting Aircraft Ownership Expenses

MRM: Maintenance Resource Management Essay

3315 words - 13 pages released by the FAA."II.StatisticsAircraft maintenance errors have been reported as a contributing factor in approximately 15% of major aircraft accidents from 1982 to 1991, at a cost of over 1400 lives (Boeing/ATA 1995). In addition to lives lost, maintenance errors can also contribute significantly to operational expenses. For example, Rankin et al. (1995) states that 50% of flight delays due to engine problems are maintenance error related and

Key issue analysis

697 words - 3 pages they had degrees of differentiation. Adding extra aircraft to this company causes another problem to rise, problems with CO2 injections into the atmosphere, this is not only an issue from an environmental standpoint but also causes the company to pay extra for the carbon tax in turn potentially raising all ticket prices for the airline. Australian Air Navigation Act requires local carriers flying internationally to be majority owned locally to

Boeing Case Analysis including SWOT Analysis, Internal External Matrix, and much more

9465 words - 38 pages witnessing the Wright brother's creation and further advances. Their first plane was a twin-float seaplane, aptly named the B & W, after their initials. Boeing's company had its big break when the United States joined World War II. His company became one of the main manufacturer's for the military's aircraft division. The Boeing Company continued to be a major military plane supplier and then went into the civilian aircraft division. Through

010101

8927 words - 36 pages , excerpts or summary of the General Conditions and the Regulations Carriage and notices. "Regulations" has the meaning given in Clause 17 (Applicable Regulations) of the General Conditions and "Regulation" means any provision of the Regulations. "Seat" means a seat in our aircraft "Sector" means the flight from the airport at the point of origin to the airport at the point of destination "Tariff" means Cebu Pacific Air's published fares and charges. "Travel Fund" means the fund created for the Passenger's convenience which can be used to offset the expenses of future bookings.

550/Lawrence Sport Working Capital Strategies

6440 words - 26 pages aircraft fleet costs. We recognize that, to succeed, we must maintain the competitive unit cost structure that we developed through our restructuring efforts" (Market Line, 2008).Delta Air Lines must continue to lower the overall labor cost as a percentage of revenue and operating expenses. During 2006, the percentage of revenue was 24% and operating expense was also 24% as compared to 31.2% and 27.8% in 2005 (reductions year over year). Despite

PIA project report

5874 words - 23 pages current situation of the organization. Fact and figures Major facts and figure that causing loss to Pakistan International airlines are ageing fleets, Overage employees, high increase in fuel and insurance expenses, high salary of staff, political element, overstaffing. 6 Causes of loss to PIA Executive Summary: Pakistan International Airlines is the national flag carrier and was established in 1955. It not only provides transportation services, but

Reinventing the airline business: no-frills ailines

7910 words - 32 pages %)*Promotion/Sales - including advertising, reservations, and travel agent commissions (18%)*Passenger Service - mostly in-flight service (9%)*Administrative (12%);*Depreciation - of equipment and plants (6%)Labour costs are common to nearly all of those categories (totalling 35% of an airlines operating expenses and 75% of it's variable costs under direct control of management, unlike fuel costs, landing charges, aircraft costs, etc.) and since

Six Formd of Business Organizations

2846 words - 12 pages manager in all aspects of the business, but may employee others to run the business. Due to its single owner nature, agreements and formalities are not necessary. A sole proprietorship is simple to set up and affords the owner a high degree of autonomy, certain tax benefits and full ownership of profits. These benefits are balanced against the fact that the sole proprietor's financial resources are limited to the owners savings and credit. There

The Current Financial State and Appraisal of Barra Airways

2146 words - 9 pages financials of the company and advice on the new expansion plans. The new expansion plans are to expand into the Eastern European market, with 20 routes to still be established. Barra already offers cheap flight within Western Europe. The airliner does not offer other service such as meals during the journey; this is one way Barra make revenue. Barra has recently outgrown their aircraft and have decided to replace the old aircrafts with 20 larger

British Airways VS Ryanair

3210 words - 13 pages . Discount carriers are growing rapidly, offsetting capacity cuts by the incumbent carriers in niche markets.Competitive pressures. Airlines compete in both, service and price. Because airlines have high fixed costs relative to marginal costs, fare wars are common when capacity exceeds demand. Overcapacity is putting pressure on prices since 2001, and low- cost carriers are thriving in this challenging environment. United Airlines and US airways

Qantas Training Centre Development in India

4002 words - 16 pages IntroductionThis report to the Board of Qantas explores the relative costs and benefits of establishing a training centre in Mumbai, India. The centre will train both pilots and cabin crews, with a specific focus on security training. Due to foreign ownership restrictions limiting investment to 74% of any airline venture, a joint venture arrangement would be appropriate. A joint venture with a domestic carrier will also provide the project with

Similar Essays

General Aviation Marketing And Management Summary Chapter 8

548 words - 2 pages interior desired, and the avionics equipment chosen. The status of production must be examined relative to cost also. Reliability and maintainability must be investigated with regard to cost. Tax considerations also exist. The cost of use includes two types of expenses: fixed costs and direct operating expenses. Cash flow analysis includes company owned with operations contracted to another company, wet or dry lease, and fractional ownership. Regarding

Case Study Analysis Of Harley Davidson Inc

2427 words - 10 pages first employee profit sharing airline program in 1974 generating approximately 10% ownership of the common stock by the employees. Southwest also has earned numerous consumer awards for best services year after year, including the only major airline to win a Triple Crown by being first in all categories of service for an annual period. And was the only major airline to earn a profit after the terrorist attack on 9/11/01. Southwest Airlines has

This Article Compares Southwest Airlines With Another Competitor

2109 words - 8 pages bookingTicketlessWebsite bookingMost60+ %Most30+ %Passenger services:*free snacks, drinksX*mealsXX*seat assignmentsXX*baggage transfersXX*frequent flyer programmeX*conveniently located airportsXOperations*frequent departuressome routes*point-to-point routes*connections with other airlinesXX*punctuality?*standardised fleet*secondary airports*aircraft utilisation- daily flight utilisation X-seat capacity- turnaround time(25 minutes)(15 minutes)*outsourced servicesmanyX*load factor67 %70.5 %*operating expenses/capacity .092/ASM$.077/ASM*average journey382 miles663 milesEmployees*flexible employees*share ownership*unionisedX*culture of commitment?Corporate reputation?

Boeing: The Future Of Flight Essay

1431 words - 6 pages – The Company has strong international operations with customers in around 145 countries, employees in more than 60 countries and operations in 26 states. Worldwide, Boeing and its subsidiaries employ close to 188,000 people with major operations in Washington State; Southern California; Wichita, Kansas; and St. Louis, Missouri. Boeing enjoys the ownership of a brand with good and far reaching awareness on a global scale (US History, 2009