Skymaster ownership costs: 2015 edition

[edasmus]

My opinion on financing (which I stress is just my opinion) is simply in today's used airplane market, financing an old airplane simply guarantees you are going to pay more for it. In the old days, financing actually made sense because for a lot of years, airplanes actually appreciated in value. You could finance a plane, fly it awhile, sell it for equal or more likely more than you bought it for all the while gaining equity.

Now days, old airplanes are not worth much to start with and are only going down. The older they get, the more people are going to drop out of the market. I paid $90,000 cash for my 337G in 2002 with 400 hour Reman engines and 1800TT. The airplane is a little over 1500 on the engines now and 2900TT and Vrefed the other day at $20,000 retail which means maybe I'd get $15,000 for it and it's a nice well cared for airplane. At least that's Vref's opinion. In other words, the best approach in my opinion is to go into it knowing the buy in is gone forever. Plan on never seeing that money again. If that statement is true, the goal on the buy in is to keep that number as small as possible because the maintenance is where the real money goes.

About the only way financing makes sense, is if you are truly a wise active investor and keeping your cash allows you to put it to work and have it earn more than the cost of financing. Otherwise you are simply increasing the cost of the purchase price. And I agree with a previous post in that if you "need" to finance to buy the airplane, you can't afford it!

Ed

[JAG]

Not sure how I ended up with $3.50 a gallon, that should have been $4.50 a gallon. While we have some places around Houston with prices around 3.80, I am not confident that will hold true elsewhere.
Jeff

[YankeeClipper]

Not sure how I ended up with $3.50 a gallon, that should have been $4.50 a gallon

Damn--was just about to start packing...

Again, this isn't a question of affordability, but of writing a budget out. Regardless of income, you still need to lay it out on the books if you want know what's left for other stuff.

With respect to investment, yes, I was thinking that if a loan was available below 5-5.5 then we might be able to 1) outpace it and also, 2) reduce our financial risk. My profession is information security, so I get a little obsessive about risk as a general topic. Perhaps this is what insurance is for, but insurers often surprise us with coverage gaps that are clearly stated between the lines.

On a separate line item: so, is 70k now the going rate to get remanufactured engines? Is that removed and installed or just for the engines themselves?

Thanks again for the wealth of information here.

[JAG]

For my budget of $70k reserves for engines, I am basing this on a hybrid cost, as I have not yet decided on overhaul versus reman. $70k would just (may a little short) buy two remans (no R&R cost), but would certainly give me a comfortable budget for two good overhauls, and a little extra for extra stuff that comes up when changing out an engine (exhaust, baffles, engine mount recondition, etc). Like the last engine overhaul I just did on my Stinson - I almost spent 50% of my overhaul cost on new exhaust, baffles and the like on making the installation perfect.
Jeff

[edasmus]

I have looked back at my Excel spreadsheets and I can give you some idea of my numbers over the last several years. I cannot go all the way back to 2002 as that would require digging out an old computer but this should give you an idea anyway.

These numbers are total dollars spent on my 1973 C337G (non-turbo) per year. They include hanger, insurance, 100LL, and maintenance all combined in one number. The airplane has been paid for since 2002. I own the hanger and it's operating cost is about $2000/year. My insurance runs about $2300/year for $90,000 hull, $1,000,000 liability and $100,000/passenger (pretty standard policy). I burn 17 gal/hour (hobbs). If we pick about $5.50/gallon of 100LL and multiply by 17, we get $93.50/hour on average for gas. Anyway, subtract all this from the total dollars spent in any one year and you will be left with a pretty good approximation of the maintenance dollars spent in any particular year. Hope this helps....

2015: $18,688.59, 57.9 hours (hobbs), derived maintenance $8,974.94
2014: $16,299.93, 32.9 hours (hobbs), derived maintenance $8,923.78
2013: $18,817.52, 54.0 hours (hobbs), derived maintenance $9,468.52
2012: $25,011.97, 76.3 hours (hobbs), derived maintenance $13,577.92
2011: $13,407.81, 83.6 hours (hobbs), derived maintenance $1,291.21
2010: $23,997.47, 86.4 hours (hobbs), derived maintenance $11,619.07
2009: $32,270.33, 79.3 hours (hobbs), derived maintenance $20,555.78
2008: $34,665.76, 96.4 hours (hobbs), derived maintenance $21,352.36
2007: $24,132.48, 89.3 hours (hobbs), derived maintenance $11,482.93


The year 2011 is low because there was no annual inspection that calendar year. My annual inspection cycles are 13 months (always signed off on the 1st and then I go to the last day of that month a year later) and then the plane is always down for at least a month during the annual inspection.

The years 2002 thru 2006, I owned the plane with partners and we had a system set up to charge hourly with assessments to cover the inevitable short falls. (The hourly rate was always way too low.) The first two annual inspections were large. Going on memory here, $21,000 the first year (mentioned in a previous post) and I believe $14,000 to $15,000 the second year but not certain on that one.

I have always told folks the airplane is about a $300 to $350 per hour airplane depending on whether it was a good or bad year. These numbers average about $315/hobbs-hour if you do the math.

I am not a mechanic. I read and study maintenance like crazy (big Mike Busch fan) and always have my nose stuck in the airplane during maintenance events, however I pay Lumanair Aviation Services at the Aurora Airport in Sugar Grove, IL to do 99% of the maintenance. They are an FAA and Cessna certified repair station and this is Chicago, IL prices. In other words, "high." My IA has been there 45+ years and he remembers when Skymasters were new. I feel good when he works on my plane. They have had some retirements there in the last year or two with the young ones replacing the old guys. I'm a little nervous about this but so far the supervision seems adequate and in all the years I have been flying the plane, I have never had a serious in flight issue so I seem to be getting what I pay for.

Also, I do not save for engine or prop reserves. I just pay as I go. If you are mechanically inclined and can perform the maintenance yourself under supervision of your IA, you can save big bucks. Parts can be expensive but the labor is way more expensive.

In my opinion, storing an airplane outside is a mistake and possibly a safety issue. These airplanes will leak water into places you don't want, critters are numerous, ultraviolet light, hot, and cold cycles are simply brutal on airplanes. I would strongly encourage a hanger. I'm done preaching on that.

Looking ahead in the future for this plane, the engines are now about 40 hours beyond factory TBO. My intention is to continue as long as I feel I can safely do so, provided I don't lose faith in the engines. So far so good. I figure to keep this airplane going for the long term will require someone (maybe me, maybe not) to invest at least $100,000. I'm guessing factory reman engines installed with props and ADS-B plus "odds & ends" will cost all that. My paint and interior are good but far from perfect. The panel is all King digital stuff with a GPS that couples reasonably well to the old Century III auto-pilot. Everything works (including the ADF) and I certainly do my best to keep it that way. I'm an old school guy. The G1000 panels are pretty but I don't want or need to fly behind one.

These airplanes, as mentioned in a previous post, are truly wonderful machines. Cessna had a great idea and executed it quite well in my opinion. They are however, an enormous commitment in time and money. If one is willing to put forth the resources, they will be rewarded with an outstanding airplane!

If you have anymore questions, I'll do my best to answer and hopefully I haven't screwed up any math too bad.

Take Care,

Ed Asmus N1873M

[YankeeClipper]

Ed,

Wow ... what an incredibly honest and detailed post. One rarely sees that much effort and openness on an internet forum. Thanks. Very helpful to say the least.

If I may ask, how much from those numbers do you (or does anyone else for that matter) suppose goes into landing gear maintenance?

[edasmus]

You're welcome! )

Actually the landing gear has been perfectly dependable and relatively painless. New rotors were pricey a few years back. I have not had any issues with the power-pack so its probably due for an issue. When we first bought the airplane, we replaced every fluid carrying line and that may have included the landing gear but I would have to check on that. All in all though (knocking vigorously on wood) the landing gear has been, relatively low maintenance.