Combination of 91/135????

[CarjCapt]

There is a possibility that the aircraft purchase (Hawker 800A) may include having it on a 135 certificate. The owner plans 200 hrs a year.

What are the benefits? (other than some offset of costs)

What are the downsides?

Anyone that is in this situation please PM me.

Thanks to all.

 

[400A]

It depends greatly on your owners expectations and the certificate you operate on. We do 150 #91 and 150 #135.

We are picky about trips and pretty much only fly scheduled trips, but most owners dont allow that. Our owner just treats us that well.

PM me for details. I also know several certificates that wont try to put you out of work (you must be VERY careful here) and some to stay away from.

 

[HMR]

What are the benefits? (other than some offset of costs)

I can't think of a single benefit to 135 other than the offset of some costs.

 

[400A]

I can't think of a single benefit to 135 other than the offset of some costs.

There are Tax advantages as well.

Some of the discounts we get from our certificate holder are nice as well.

 

[HMR]

There are Tax advantages as well.

I was referring to the tax advantages.

I've only worked for 4 charter companies so my experience is limited. I now fly PT91. My CP and I took over management of our current jet from a 135 operator. By cutting out the middle-man and negotiating our own fuel, mx and hangar fees we're saving well over $100K/yr. This year the savings will be $200K+. Not bad considering it requires about 5hrs per week of "office" work. We fly approx. 200hrs/yr. and the boss is very happy.

I know the tax advantages can be huge when purchasing something like a GV, but CarjCapt is looking for a Hawker.

 

[400A]

I was referring to the tax advantages.

I've only worked for 4 charter companies so my experience is limited. I now fly PT91. My CP and I took over management of our current jet from a 135 operator. By cutting out the middle-man and negotiating our own fuel, mx and hangar fees we're saving well over $100K/yr. This year the savings will be $200K+. Not bad considering it requires about 5hrs per week of "office" work. We fly approx. 200hrs/yr. and the boss is very happy.

I know the tax advantages can be huge when purchasing something like a GV, but CarjCapt is looking for a Hawker.

Every CP is supposed to make sure all of that happens. In addition to that We added an additional $127,500 profit to the operational till as well. By the way, that figue is after the "middle man" was paid.

The tax savings were fairly large on our $4.5M Beechjet.

 

[h25b]

There are tax advantages for the owner(s) of the aircraft in certain situations depending on how it's set-up. Some companies will set-up the aircraft ops. under a separate LLC and wet-lease the a/c to the management company. Then they will simply charter the aircraft like anyone else.

And yes, it can be a great deal for all of those involved depending on the situation and what EVERYONE's expectations are going in. Simply saying, "I can't think of a single benefit to 135 other than the offset of some costs" is painting with too wide a brush...

It seems the situations where a person/company that really can't afford a jet in the first place is sold on this idea is where things start to go south.

 

[400A]

I agree

There are tax advantages for the owner(s) of the aircraft in certain situations depending on how it's set-up. Some companies will set-up the aircraft ops. under a separate LLC and wet-lease the a/c to the management company. Then they will simply charter the aircraft like anyone else.

And yes, it can be a great deal for all of those involved depending on the situation and what EVERYONE's expectations are going in. Simply saying, "I can't think of a single benefit to 135 other than the offset of some costs" is painting with too wide a brush...

It seems the situations where a person/company that really can't afford a jet in the first place is sold on this idea is where things start to go south.

Well said, but in rare cases like ours there is no issue of affording the plane. Ours is paid for. We do the charter as much to keep the plane and crew current as it is to offset some cost. Our owner uses the aircraft about 10 hours per month. We have found that at 25 hous per month the crew is current and proficient and the aircraft is very reliable and does not get ragged out.

We tried the 40 hour per month of charter thing and it was our finding that while 2 years we posted a cash flow profit, it was not worth the additional employee overhead, and demished value of the aircraft when we went to sell it.

Our owner is very happy with the current arrangement.

 

[h25b]

Well said, but in rare cases like ours there is no issue of affording the plane. Ours is paid for. We do the charter as much to keep the plane and crew current as it is to offset some cost.

This is our situation as well. The numbers work A LOT better when the aircraft is paid for. We're still tweeking things to find the happy medium of charter utilization. So far 25-30 hrs. seems to be where everything's happy. We just increased our fuel surcharge by 75.00/hr. which will bring us to where we want to be...

 

[HMR]

And yes, it can be a great deal for all of those involved depending on the situation and what EVERYONE's expectations are going in. Simply saying, "I can't think of a single benefit to 135 other than the offset of some costs" is painting with too wide a brush...

I'm still not clear on what the benefits are other than the offset of some costs. I'm not aware of many A/C owners who are netting substantial amounts of money from charter ops. I understand the huge tax advantages available in certain situations but that's still an offset of ownership costs not a source of revenue. You sound like you have experience in this area so I'd like to know some of the other benefits. Just remember, I majored in Anthropology and minored in Surfing so please type slow.

400A- Sounds like you're in a good situation and doing a great job. Adding "an additional $127,500 profit to the operational till" after expenses is very impressive. My circle of pilot-buddies includes a few dozen guys/gals flying 135. I know of only two 135 operators who are able to pick and choose trips and set their own schedule. In both cases the A/C is owned by the Capt's father.

If CarjCapt's boss will allow them the same freedom and see a profit, it makes sense to go 135. You mentioned above that your situation is "rare" and "most owners don't allow that". I agree.