Aircraft Sales - Loutzavia Aircraft Sale - Buying your First Aircraft - Buying an Aircraft

The idea here is to guide you through the process of acquiring your very own aircraft. We hope to give you detailed information as to how and what to expect as well as what to do. We will do it by asking some questions and answering them as we progress:

This is the first question to ask. This is probably the question most people would ask first and foremost and it is rightly so. The easy answer to this is that if you regularly fly hired aircraft for somewhere between 150 and 200 hours per year it is probably going to mean that you can start looking at buying your own.

The way to determine this is to do some very interesting maths by first and foremost determining what ownership would cost. Now there are a few pointers here: Direct and Indirect costs are involved. Lets start with the indirect costs these are costs related to the aircraft ownership whether it flies or not. It is the repayment of the mortage loan if it was purchased through a loan, the insurance, hangarage, the mandatory annual maintenance regardless of the fact that an aircraft is flown or not, airworthiness currency fees, annual radio license fees and avionics maintenance. All these are fixed costs in a sense whether or not the aircraft has flown a single hour or not? The direct costs are the costs involved in actually keeping the aircraft in the air while flying. This include Fuel, Oil, Landing fees, ATNS fees, and if you are a diligent owner also provision for the overhauls of both the engine and the propeller.

If we are looking at a Piper Cherokee 160/161 with half life Factory Reman engine and Half life since new prop and a decent King digital avionics stack (it has 2 X Nav/Com 1 with GS and an ADF & DME with a VFR GPS) and the interior and exterior is recently been done. All the other Airworthy directives are up to date and the aircraft is perfect for you. The asking price is ZAR400 000-00 and if one has ZAR100 000 as a deposit but will have to find finance for the rest. We have spoken to the bank and they like our face and have pre-approved an amount to enable us to purchase the aircraft. CAN YOU AFFORD IT?

Aircraft Purchase Cost Breakdown
Indirect Costs	Per Annum	Direct Costs	Per Hour you Fly
Interest on the Mortage payment	ZAR72300	Fuel burn	ZAR 252
Insurance	ZAR11000	Oil	ZAR10
Hangerage	ZAR18000	Provision Engine O/H	ZAR120
CAA & ICASA annual fees	ZAR750	Provision Propeller O/H	ZAR20
Avionics repairs etc	ZAR5000	Provision MPI	ZAR75
Total Annual Costs	ZAR107050	Total Hourly Costs	ZAR487

Now that we have set this on paper lets look at the rest of the details your intention is to use the aircraft for your trips to your own farm 2 hours flying time from your home base airport and it will be 2 trips every month totalling 8 hours per month, and then your visits to you other farm in another part of the country at least 4 hours flying time each direction this will be at least once a month but you suspect it to be 15 such flights per year. Lets calculate your expected utilization looks like 200 250 hours.

Lets take the indirect costs R107050 and divide it by 250 : it comes to R480-00 now add to that the R487 we calculated as direct and we end up with R960-00 per hour now this is expensive but and it is a huge BUT it includes the interest on the mortage that amounts to R300-00 per hour for the 5 years you are paying on the mortage thereafter it will be considerably less. I suggest you speak to a bookkeeper to assist you in calculating the real effect of the mortage interest. If you buy cash it is a total different ball game all together as the total will be something like R660 per hour that includes virtually everything including provisions for the maintenance.

The cost will be relative high but one very important factor is that the aircraft is yours and you have control over it. You can decide when to fly and not to fly no one is going to book it when you want to use it. Another advantage is that it will not loose its value. It will at the very least retain its value but probably increase in value especially if it is properly cared for.

Well it should be very easy to answer when you started flying you learned to fly in a basic uncomplicated aircraft that allowed you to learn the basics in stead of battling with the advanced systems. Therefore our suggestion to you would be that you follow the same route when looking at buying an aircraft especially if it were a tough decision Remember the saying Got time to spare go by air! well it is for good reason most second hand aircraft have a history. By this we mean some snags and snags cost money. That seal on the retractable undercarriage hydraulic actuator could cost about the same as the MPI on the fixed gear aircraft. If you are wondering if you would be able to afford the cost stay away from complex aircraft for a start learn the ropes of ownership with a basic low-cost aircraft.

We can always help you to up-grade later but to have a fancy aircraft stand in the hangar because you cant afford to maintain it is much more expensive than buying now learning the ropes and selling after some time to get the more complex aircraft.

Stay away from aircraft that is not very popular they may be very cheap and their deal might look all that attractive until you need to get an instructor that is rated on the aircraft to do the conversion oops he is out of town or country and will only be back in 3 months time and sorry he is the only one rated on the aircraft in the country Oh yes and sorry the only workshop that is rated to work on the aircraft is in Put-sonder-water and yes he is not all that keen to work on this type as the spare parts are hardly available and require special import. Now the aircraft cost you nothing but the maintenance is KILLING you. After the costs of ownership for the first year is calculated you are at 1.5 times the amount you would have paid for an aircraft like a Piper Cherokee or Cessna 172 that are very popular aircraft and almost every maintenance shop and instructor can help you with the conversion to type.

If you add the added costs of unpopular aircrafts maintenance and other fees to the purchase price they will cost what the more popular ones do and you cant get rid of it at nearly the same amount of money that you paid for it? Sorry some in aviation circles say: You have married the aircraft! Not even a divorce will get you out of it?

- Most important of all most of them are going to be much easier to sell when the time come to upgrade or if you want to bail out you will probably get your investment back less some costs but you are not married to the aircraft?

The next option is a Partnership this is basically a group of pilots co-owning an aircraft and each has limited utilisation, and limited responsibility in terms of the aircraft. In aviation this has been very successful and very un-successful all depends on the relationships in the partnerships. The biggest advantage is the sharing of costs.

Another option that is somewhat of a large partnership is a flying club. Here it is often the scheduling that has the biggest headache while the aircraft is actually rented to club members at a reduced cost. The aircraft is not really owned.

A new concept that is making some ground is the fractional ownership model of ownership. In this there is a management company that will keep the administration and scheduling running. The owner buys shares in an aircraft that is available to them with relation to the number of shares owned and also at a preferential condition if it is required. The company takes care of the rest. This makes it possible to fly newer, more complex aircraft at a fraction of the cost of complete ownership and with much less headache.

Take some time and get more information. Go through the advertisements of the aircraft in the market. Very few owners are prepared to give sales companies a sole mandate so you will probably find that the guys are all advertising the same aircraft with different prices. But check out the info you will at least need the following info to start considering an aircraft:

The total time the aircraft has flown since it was manufactured. This is shown with the acronym TTAF in advertisements. It is usually considered that the lifespan of a light general aviation aircraft is around 10 000 to 15 000 hours it will depend on the regular or irregularity of its utilisation but that is somewhat of a rule of thumb. You can therefore determine how much of the useful life is left by looking at the TTAF in the ad. This will probably also indicate if the aircraft is due for X-rays to determine metal fatigue or other underlying problems with the airframe.

The next important factor is the condition of the engine/s and propeller/s on the aircraft. The engine hours will show the number of hours flown since new or since the last overhaul. It is also important to get the Time between Overhauls for the particular aircraft. It varies within the same model and has to be checked. (The Cessna 400 and Piper Seneca ranges have different TBOs within the same range of aircraft) Advertisements will show SMOH or TSOH to show time since overhaul, sometimes it will show TBO for time between overhauls. TSN or SNEW is used to show time since new on engines and Propellers (see below).

The information on mandatory maintenance like Airworthy directives from the manufacturers are also very important some time back all Cessna light twins in the 400 series had to undergo changes to the wings that were very expensive. If it was not known and the unsuspecting buyer bought an aircraft without ensuring compliance it could lead to a nasty surprise a whole half a million Rand of it in South Africa.

The Question about damage history is another important factor. Some AMOs are able to repair an aircraft after an accident or incident and hide the details in the log book (they will declare that a new avionic system was installed) This require a re-weighing of the aircraft that is almost always done after installation and also after hull repairs therefore it is necessary to do some homework and determine if the aircraft has a history? It is good to know and it should at least be known that the repairs were done by a reputable guy and that it was indeed properly done.

The condition of the interior and exterior are also important it will give you an idea if the aircraft was hangared and if it was properly cared for or not. Remember however that the cost of re-painting and re-doing the inside is relatively low compared to the overhaul of an engine. If need be you can do the paint and interior on an aircraft that does not look that good if the engine and propeller is in a good condition you can fly the aircraft. Lastly the price is important.

So you have received the spec sheets from the sellers and you are going through them and you have found 4 possible candidates. Phone the owners or sellers and go look at them! While looking look for the following:

- The classic walk around check the fuselage, wings & tail, windows. As one would for a proper pre-flight inspection. But make it more thorough: Look for damage & hanger rash. If you can see damage enquire about it. You want to determine the history of something you are going to spend a considerable amount of your hard earned capital on. Who is maintaining and was any damage there were properly repaired?

Once you are happy it is time to make an offer to purchase. The offer to purchase is usually the buyer making his intentions known to the seller. The Buyer will the make an offer for a price, and the price will usually include an amount of commission to be paid to the sales company, and the buyer will usually also protect him/her self by asking for time to arrange finance and usually the offer will be subject to the successful pre-purchase inspection at an AMO of the buyers choice. The buyer is usually responsible for the cost of the inspection.

If the pre-purchase and application for finance is successful the transaction will be done. The change of ownership will be affected. You have to arrange insurance and the check ride or conversion to type with your favourite instructor can be done.