Are you interested in flying Cirrus aircraft but you’d like more information on operating costs? Then this upcoming series “Cost of Ownership” should help you out. I’m writing from the perspective of aircraft shared ownership.
I’ve found that a one-quarter (1/4) share in a Cirrus SR22 is about the same cost as owning a Piper Archer by yourself. As a budget estimate, expect $12,900 for flying about sixty (60) hours per year in a Cirrus. A significant part of that budget would be for fixed costs, such as, hangar space; which at metro rates are above $5,000 per year.
What are the ownership costs for a Cirrus SR22 aircraft?
Because there are many aircraft operating costs we need a logical structure and common terminology for discussion. Let’s start by saying – aircraft operating expenses can be divided into two categories: Variable and Fixed.
Variable expenses increase with the number of hours flown; such as, fuel, oil, tires, brakes and magnetos. We’ll separate variable expense into “direct” and “indirect” sub-categories. Direct variable expense items are closely related to flight hours; some such as, fuel and oil are usually paid near the time of use, i.e. same month. Other direct variable expense items are also tied closely to operating hours but are paid months or years later; such as, magnetos mandatory IRAN every 500 hours.
Indirect variable expense includes items, such as, pre-TBO cylinder overhauls and TBO engine reserve. These costs are related to hours of use, but can vary greatly based on how the airplane is operated and maintained. These are usually long-term costs paid after many years of operation.
Fixed expenses are costs incurred whether you fly or not; such as, hangar, insurance, subscriptions, loan payments and Life Limited Components; such as, Cirrus Aircraft Parachute System, reefing line cutters, electronic CO detector, AmSafe EMA airbag controller, oxygen regulator, and more.
Expense categories allow us to apply accounting principles, such as, matching. A shared ownership should want to match variable expenses with member use of the plane. But fixed costs should be divided equally among members because they are not related to usage.
Discussing costs helps members set reasonable expense estimates. Continuing discussions over time combined with your experience allows for adjustments, which improve planning and budgeting. Understanding aircraft expense reduces the chance of financial surprises among owners sharing an airplane. A financially healthy co-ownership creates value for all members, and supports the fun and adventure found in general aviation flying.
For a general overview of how variable and fixed costs are organized you can read my post from last year – PA28 Piper Archer Flight Expense Calculator. I owned and operated a Piper Archer for eight years before purchasing a Cirrus SR22.
Toward the end of this series we’ll look at shared ownership Income Statement and Balance Sheet presentations. Including how to organize a shared-ownership Income Statement and why it has a zero profit. And, we’ll go over a shared-ownership Balance Sheet with Assets and Liabilities and Membership Equity.
In the coming weeks, we’ll get into the details of co-ownership operating costs with a Cirrus SR22. I’m excited about this new series and hope you are too! Let’s get started.
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