Cost of Convenience: Breaking Down the Financial Impact of Aircraft Ownership
Sticker price aside, your hourly expense might not be your biggest.
Owning an aircraft is a symbol of ultimate convenience, speed, and freedom. As an aircraft owner, you have the power to transcend typical travel boundaries, customizing your own schedules and reaching locations often untouched by commercial airlines. However, the glamor of private aviation also comes paired with a multitude of costs that can sometimes remain hidden beneath the surface of the initial purchase. It's important to understand that the total cost of aircraft ownership isn't just about the upfront purchase price. In reality, it involves a host of additional fixed and variable costs that can notably influence your financial commitments.
In this article, we'll focus on the popular Cessna 172, a common choice in the general aviation world, as our example. This aircraft is a favorite among pilots for its reliability, ease of handling, and affordability, making it an ideal model to illustrate the true costs of aircraft ownership. By providing an in-depth cost analysis, we aim to help potential owners gain a comprehensive understanding of these expenses. This understanding is not just beneficial; it's crucial for making informed and judicious decisions about entering the world of private aircraft ownership.
Fixed Costs, Rain or Shine
Fixed costs are consistent expenses incurred regardless of your flight hours. They form the backbone of your annual aircraft expenses and must be accounted for even if your aircraft remains grounded for the entire year. Let's examine some common fixed costs using an example:
Annual Inspection: This mandatory check is vital for maintaining the safety and efficiency of your aircraft and may cost around $1,020.00.
Storage: Whether you rent a hangar or tie down your aircraft at an airport, you’ll be looking at costs in the ballpark of $840.00 annually.
Weather Service: Services providing real-time weather updates, necessary for safe flying, can cost upwards of $604.89 annually.
Insurance: Similar to car or home insurance, aircraft insurance is a non-negotiable expense that can run up to $1,171.55 per year.
Refurbishing and Modernization: Keeping your aircraft modern and comfortable is part of owning an aircraft and may cost about $220.44 annually.
Depreciation: Depreciation is a unique fixed cost as it represents the loss in value of your aircraft over time. In our example, depreciation is $1,049.73. However, it's important to note that depreciation is optional and can often be a negative number, especially in a market where aircraft values are appreciating. In such scenarios, owners might see their aircraft's value increase over time, rather than decrease.
Variable Costs, By The Hour
Variable costs fluctuate based on your usage of the aircraft. They encompass expenses such as fuel, oil, maintenance, and other flight-related costs. Using our example, here's a breakdown of variable costs for 100 hours of flying:
Fuel: Consuming fuel at $43.20 per flight hour can be one of your major variable expenses, this example using 8.0 gallons/hr @ $5.40/gal.
Oil: The engine oil necessary to keep your aircraft running smoothly can cost around $3.10 per flight hour.
Overhaul Reserves: Setting aside funds for future engine overhauls is a smart practice, costing approximately $9.57 per flight hour.
Hourly Maintenance: Regular upkeep beyond annual inspections can run up to $15.30 per flight hour, depending on make and model.
Misc: Miscellaneous costs add to your variable expenses, amounting to around $7.83 per flight hour. These include, but are not limited to landing, parking, supplies, catering, etc, as applicable.
This translates to a total of $78.99 per hour of flight, or $7,899.50 for 100 hours of flight annually. Further broken down, it equates to a cost of $0.73 per mile flown.
The Total Cost of Ownership
Summing up the fixed and variable costs, the total cost of ownership in our example would be $12,806.12 annually for 100 hours of flying. This estimate underscores the importance of understanding that the true cost of owning an aircraft extends far beyond the initial purchase price.
A comprehensive understanding of ownership costs is vital for any prospective aircraft owner. Aircraft ownership is a substantial investment, requiring thorough research and comprehensive financial planning. With a clear understanding of these costs, you're better equipped to make informed decisions and to enjoy the incredible benefits and freedom that come with private aviation. If you'd like to research ownership costs about a specific aircraft, search our database by make and model.