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Top 10 Essential Considerations to Structure a Profitable Ai.


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by: Pat Redmond

Leasing your airplane to a flight school or other business CAN be done successfully for PROFIT! Learn the essential considerations of a
Leasing your airplane to a flight school or other business CAN be done successfully for PROFIT! Learn the essential considerations of a "win-win" arrangement before you lease.

1. Am I "O.K." with the idea of other people flying my airplane?

Are you really? Regardless of the revenue generated from the leaseback, the arrangement is not successful if you're constantly worried about who's flying your airplane and how well they're taking care of it. Sure, you need to be concerned about these things, but if you can't see your airplane as a "tool" you need to reconsider. NOW

2. Do I know what I want out of this leaseback?

Decide what you need to achieve with the arrangement. Are you looking for a

tax shelter?

way to reduce the cost of flying?

profitable business?

Start with the end in mind and make sure you keep your eye on the ball. All other considerations depend on your objective.

3. Have I done my "due diligence" when choosing a flight school with whom to partner?

How do you know if you've made a good choice? A good flight school will have the right number of airplanes (to best utilize each one), the planes on the line will be well maintained and clean, and the flight school procedures will be well defined. Ask for references, and determine how the current fleet is cared for. Remember, you're not only choosing a business, you're choosing a business partner! www.airplanenoise.com/answers_to_why.htm

4. Have I chosen the right aircraft?

Of course, this depends on your objective(See Point 2). For maximum revenue, choose a 4 place IFR airplane. A Skyhawk is probably accepted as the best renting airplane. You should also consider the age of the aircraft. While an older aircraft may cost less up front, the advantages of the new aircraft's warranty may far outweigh the purchase price. You can view a spreadsheet and create your own scenarios by clicking: www.airplanenoise.com

5. Is my lease agreement properly written to address both FAA and IRS issues?

Don't try to save pennies here! Go to a specialist and have an agreement drawn up that will protect you and your purchase. In the long run, you'll save!

www.advocatetax.com

6. Do I have a plan for flying my own aircraft?

Remember, the more your airplane flies, the more money you make. And,the more money you're making, the less available your aircraft is for you! Try to strike a balance, schedule well in advance or set aside times to fly your airplane when the school is closed or business is slower. Sunday became my "flying" day and the airplane was scheduled out for me each week. Another benefit. . . I felt compelled to fly when I had scheduled the airplane and was forced to find new and exciting places to fly each week. Click on the link for a few suggestions: www.airplanenoise.com/great_trips.htm

7. Is my aircraft properly insured?

Insurance will cost you more when your airplane is leased so the airplane must fly enough to compensate for the added expense. The insurance company has added risk when many different people are flying an airplane and this risk is reflected in the premium. Learn more by downloading the FREE TeleClass, "Navigating the Aircraft Insurance Maze" by clicking the link below: www.airplanenoise.com/teleclass_schedule.htm

8. Do I have a realistic expectation for the cleaning and maintaining of my aircraft?

The way the other airplanes on the flight line look now is the way yours will look. Are you "O.K." with that? If not, don't expect the flight school to change their behavior just because you write something into the lease agreement. It just won't happen! It's time to look for an alternative.

9. Do I have an exit strategy?

Getting out is as important as getting in! Consider your exit now and make sure you can achieve your objectives in that time frame. Is your plan to move up, add additional aircraft to the flight line, earn enough revenue coming in to keep the aircraft indefinitely? Map out your plan and set goals. Sounds like running a business. .. doesn't it?

10. Do I really have what it takes to be in the aircraft leasing business?

The biggie! Remember,this is a business and should be treated as such. The successful leaseback business owners pay their aircraft down quickly with the generated revenue and take their profit at the time of sale. Those who spend the big summer checks find themselves in trouble. Learn more about leasebacks at:

www.airplanenoise.com/answers_to_why.htm

About the Author

Pat Redmond, helps business owners who are tired of long lines and baggage claims, fly their way to freedom! Enjoy dinner with your family tonight! To learn more about the General Aviation Business, sign up for more FREE tips like these, visit her site at http://www.airplanenoise.com

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