Aircraft Purchase Proposal

The following is a report based on executive committee discussions regarding the Salmon Arm Flying Club's plans to upgrade its aircraft.

Summary

Criteria for the new aircraft:

• Four seat
• Fixed Gear
• Extensive equipment panel, including 2 nav/coms and a class C transponder
• Strongly consider a Cessna
• Prefer a 160HP engine or more
• Prefer long range fuel
• Less than 1000 Hrs AE, 5000 Hrs AF
• Locate aircraft south of the boarder if necessary
• Purchase price goal of between 50K to 60K

Requirements to be met by club members prior to purchase effort:

• Move towards primarily selling block time 10 hours per year minimum @ approximately $100/hr
• Members currently flying each make their intentions known for the next season, and purchase the block time
• Minimum number of members previously not flying club plane, to purchase block time
• A portion of the proceeds from the block time sales go towards purchase, the remaining be placed in club account to cover operating costs
• After purchasing the minimum 10 hour block time, blocks can be purchased in 5 or 10 hour blocks for 100/hr or single hours and pay full retail @ approximately $120/hr
• All required purchase equity will be met through a membership loan agreement and repaid over two years or less or immediately after the sale of the 150. The membership loan agreement will address purchase loans of approximately $2,000 from members on low or no interest to cover purchase costs
• Existing Club C150 will be placed for sale ASAP

Discussion

Criteria:

The criteria developed for the new aircraft is based on presumptions that the current aircraft, a C150, is being underutilized because of its inherent limitations in payload, speed and range. The current aircraft has some characteristics that are excellent for a small club like ours. It has excellent and forgiving flight characteristics for low time and infrequent users and is very economical to maintain. However, its limitations are extensive and not in keeping with the emerging demographics of Salmon Arm and the Flying Club. A more suitable aircraft would carry two or three adults, four hours fuel, and all necessary baggage while still have the capability to perform safely in our mountainous terrain and poor weather conditions. The key to utilizing a club aircraft will be to find the correct balance between the existing practical characteristics of the C150 and increase the performance to appeal to a broader range of fliers.

The criteria summarized above are intended to address all these concerns. The Cessna series of aircraft are designed with low maintenance and appeal to pilots with a broad range of skills. Although pilots with high skill levels may find a C172 a little slow and dull for their skill level, they will still have a vehicle to access their travel needs while very low time pilots will have access to a great training-level aircraft.

With four Class C control zone centers within two hours flight time, a new aircraft should have all the capability in equipment and avionics to operate in those zones. For those who have not had recent experience entering Vancouver's control space, this area presents all the challenges and responsibilities of any area in North America. When entering this airspace complete knowledge of location and situational awareness is absolutely necessary. Pilots with extensive experience are at ease in this airspace when they have all the instrumentation and avionics available, pilots with low levels of experience require these tools even more than they may realize.

If the aircraft were IFR capable, pilots with those qualifications could utilize it for those purposes, while pilots with VFR training could utilize extra instrumentation for flying VFR in low conditions. For those pilots who fly the new aircraft who are not familiar with the use of VOR, GPS, multi channel radios and the like, training seminars could be arranged.

The options presented for 160hp and long range fuel are not absolutely necessary, however in our mountainous terrain, and in an area known for marginal weather, these options could be valuable in a wide range of situations. Air and engine times are less important than actual condition of the aircraft but the new aircraft should have AF and AE times that won't leave the club in a situation of unpredictable maintenance costs immediately following the purchase or AF times that would make it difficult to sell the aircraft quickly if and when it becomes an issue.

It may not become necessary to shop south of the boarder but considering the current exchange rate finding a bargain in the US is a valid option. Browsing for aircraft that meets the description summarized in the range of 50K to 60K presents many options. It seems to be a buyers' market.

Member Requirements:

Facing a major investment decision for our club requires overwhelming support from our members, not just in spirit but in a “put your money where your mouth is” way. The current situation is that only a small number of members are currently flying the existing club aircraft, of these few people, even fewer are active inside the club and they don’t regularly show up for aircraft maintenance or cleaning. In addition to that, the condition of the hanger is not the best. One might wonder if the members who fly the plane are taking this privilege for granted or are unrealistic about the actual cost of flying. One of the obstacles facing the club is to have a renewed interest and commitment from the current users of the club plane. In addition, some new members with a need for the club plane will have to come forward.

That commitment can be met by those flying members to pre-purchase airtime for next season at the new rates and terms listed below. To increase the time flown on the new aircraft a new minimum time per year will be set at 10 hours.

Flight time purchases will be set at $100.00 /hour wet sold in 10 hour parcels. The first 10 hours will expire after 1 calendar year, non- refundable. After the minimum time has been met, time packages could be in as little as 5 hours or could extend until used. An hourly rate of $120.00 /hr wet could be used for members who choose to not purchase block time, after the minimum time has been met. In addition to the block and hourly times, the current member dues and insurance waiver will apply.

In addition to the existing people flying the aircraft, having a larger more versatile aircraft should bring new members to the club to fly. This should be evidence prior to decision for purchase by new members coming forward to pre-purchase flight time at the same terms as existing fliers.

The club currently has equity in cash and value of the current aircraft to purchase an aircraft of the values previously discussed. However, additional money may be needed from the members in the form of loans to either top up the purchase or to bridge the purchase prior to the sale of the current aircraft. If the loan is gathered from a number of different members in amounts of around $1,500 to $2,500, we will have another way to confirm wide support for the purchase. The loans will be interest-free, payable when the new aircraft is sold, with any outstanding balance paid within two years.

Obstacles / New Rules and Procedures:

If any obstacle exists, it may be to sell the current aircraft. Although there is no reason to be discouraged due to the aircraft itself, as previously mentioned, it may be a buyers' market and a lower price might be gained from the sale than what we would expect. However, it is an excellent aircraft in its type and we should get near $25,000 for it. But it should be advertised immediately.

Inquiries show that insurance costs will rise. Although we expect that the cost will be lower, estimates run as high as $5,000 /year. This will be a challenge to the Club that will be met solely by the fliers. A likely solution will be a minimum time per year that the aircraft is flown. The actual flight time charged to members can be prorated to cover the actual costs of insurance, retroactively.

A concern raised is that the aircraft could become popular to the extent that conflicts arise regarding more than one person wanting the aircraft for the same time slot. Another possibility is that a flier may want the aircraft for an extended period of time for a multi-day cross-country trip leaving local fliers without an aircraft. In short, other clubs have dealt with these concerns and we can adopted these solutions at our Club. An example would be that during the peak season, any flier taking the aircraft overnight would be charged a minimum number of hours ( e.g. 3 hour/day ).

Misuse of the Aircraft crossing the US boarder can create serious consequences for Club. Until such time that a resolution to this issue presents itself, crossing the US boarder would be prohibited. Another concern is the possibility that a flier attempts to use the aircraft for commercial activity, this also would be strictly prohibited.

Prior to the new aircraft being put into service, a committee will be formed to examine these issues in more detail and to rewrite the aircraft Rules and Procedures to accommodate any new issues arising out of the different type of aircraft. This committee will also be charged to restructure the finance issues including insurance and engine fund.