How Much Will It Cost to Fly?
When scanning the pages of Trade-A-Plane looking for an airplane to buy, don't be seduced by the seemingly bargain prices on older-model aircraft, particularly twins and high-performance singles. The purchase price doesn't matter if you can't afford to fly the thing. Gene Unterman — who has bought and sold thousands of aircraft — offers an easy rule-of-thumb for estimating operating cost based on just two variables: fuel burn and age. It might help you to avoid buying a money pit.
After you've decided on type, size, seating capacity, engine, airframe, mission, performance, and so forth, ad infinitum, you eventually get to the two final considerations: How much will it cost to buy and how much will it cost to operate?
The first part of this question is beyond the scope of this article, but here's a good way to figure out the answer to the second: Start with the fuel burn per hour, then double the cost of that fuel. For a relatively new airplane, this should be a quick way to approximately figure the hourly operating cost and should include fuel, oil, tie-down, 100-hour or annual inspection, reserve for overhaul and routine replacement of parts. (We'll talk about older airplanes in a moment.)
For instance, if you're looking at a late-model Cessna 182 or a Piper Dakota that burns 13 gallons per hour, and if fuel costs $2.00 a gallon, the operating cost should be pretty close to $52 per hour. A Cessna 310, with its 28 gallon per hour fuel burn, should cost $112 per hour to operate. ($2.00/gallon X 28 gallons X 2 = $112.)
This figure must then be adjusted in consideration of the plane's age. My rule of thumb here is to increase the cost figure by 25% for each 10 years since the airplane was manufactured. In other words, add 50% for a 20-year-old airplane, 75% for a 30-year-old airplane, and so on.
Watch Out For Bargains
I've had people tell me something like this: "I only have $20,000, but I want an airplane that's as fast as possible. So I'm considering an older high performance single or twin." Now it's true that you can buy an older Cessna 210, Piper Cherokee, Cessna 310 or Aztec for $20,000 or even less. But if you have only $20,000 to spend in the first place, you can't afford the upkeep.
Here's why: A 1959 Cessna 310 selling for $20,000 actually costs the same (actually, even more) to operate than a 1981 Cessna 310 that sells for $180,000. Remember that the operating cost is about double the cost of the hourly fuel burn — but that's only part of the story. You now need to multiply that factor by 25% per 10 year period since the plane was produced. In this example, the Cessna 310 is 31 years old. So its hourly operating cost is not $112, but $112 plus another 75% — a grand total of $196 per hour! If you can spend only $20,000 on the plane, will you really have nearly $200/hour to operate it? Not likely.
Buy Affordable, Buy Young
The moral? Don't buy more aircraft than you can afford to operate, and buy as new as you can, and you won't regret moving down several models from your ideal. Generally speaking, I don't buy any aircraft built before 1975, though this policy varies slightly from model to model, and can't be used as an absolute rule-of-thumb. Some aircraft corrode much faster then others, and there just are not many pre-75 models that have not suffered from corrosion. Of course, it also depends where the aircraft was based, whether it was hangared or tied down outside, and so forth.
I would insist that before refurbishing any aircraft, it must have no damage, no significant corrosion, and complete logs. The aircraft must also be ready for engine overhaul, and the previous engine must have gone the full TBO (or close to it). This last point is important, because an engine that has reached TBO has most likely been properly maintained. It shows that the previous owner was more concerned with safety than he was with the cost of safety. And if he was concerned enough to take care of his engine, he was probably concerned enough to take care of the rest of the plane, too.
If you have a first run engine that has gone to the full TBO — assuming TBO is 2,000 and the aircraft has only 2,000 hours total time, airframe and engine — you would certainly want to keep this engine and have it rebuilt instead of getting an exchange. Conversely, if the engine has been remanufactured or overhauled several times or didn't make it to its last TBO, an exchange engine would be an excellent consideration.
When you refurbish an aircraft, you have the engine remanufactured, completely strip and repaint the aircraft with Dupont Imron or other polyurethane paint, and install a completely new plush interior. Also refurbish the airframe with a complete annual inspection, and then go further. The purpose of an annual inspection is to repair or replace anything that's broken, non-airworthy or that will become non-airworthy in the coming year. When you go through the airframe, you want to repair or replace any item that is likely to become non-airworthy within the next three to four years. Naturally, this often requires a lot of parts, and the older the airplane, the more parts it's going to need. So even though the cost of the engine, paint and interior are equal for an aircraft built in 1960 or 1981, the cost of refurbishing the airframe is much greater for a 1960 model simply because of its age.
An Older Aircraft Is ... Well ... Older
Also remember that older aircraft won't bring prices as high as newer ones, no matter how superb the refurbishment. Remember, there is nothing you can do — no amount of money you can spend, and no modification you can have installed — that will make the title of the aircraft reflect a newer year. No matter what, that 1970-whatever will never be a 1997. And although you often see ads in the paper for refurbished or highly modified aircraft that have been assigned a "newer" year of manufacture, that is strictly the doing of the seller, has no legal meaning, and therefore no additional value.
It becomes economically impractical to refurbish aircraft older then about 1975 (again, depending on model). The most important thing to remember is that there is absolutely nothing you can do to an aircraft that will reflect a new year when somebody runs a title search on it. If you start with a 1970 airplane and try to refurbish it, it will always be a 1970 airplane, no matter what you do.
Here's an example. I can buy a 1979 Skylane with a run-out engine at the current wholesale price of about $75,000. A remanufactured engine costs $10,000, paint is $5,000 and the interior is about $3,000. On top of these, I'll spend about $2,500 on an annual and airframe refurbishing. (All those prices are at dealer cost — you'd probably pay a good deal more.) That's a total of $95,000 — my cost as a dealer. I can sell the plane for $98,000 and not even make enough profit to make sense.
Now lets take a 1960 Skylane that I can buy with a run-out engine for $30,000. A remanufactured engine will cost slightly more, because it takes some extra hoses and other odds and ends, so let's call it $11,000. The paint is the same at $5,000, but more of the interior plastic will have to be replaced to the tune of about $6,000. But the biggest jump is the annual and airframe refurbishing at over $4,000. When you add it up, you'll see that I've created an aircraft that costs me $58,000, and which, if I'm lucky, I can sell for $49,000 because of its age. What a great deal: a terrific plane and I've only lost $9,000!
If it doesn't make sense for me as a dealer, it makes even less sense for you.
A Word About Radios
Compared with the rest of the plane, radios are cheap, and the relatively small investment you make in them can only be partially recouped on resale. Barring this, you can always remove them when you sell the plane and put them in your next aircraft. However, this is not usually economically viable, and especially not on larger aircraft with more sophisticated systems. You can also install used radios — an idea that makes sense on such items as HSI, radar or stormscope. After all, you've bought, or are buying, a used plane with used radios in it anyhow, so why not consider putting in additional used radios?
If you wind up buying a lemon because of engine or airframe problems, you'll have that problem for a long time, and spend plenty trying to fix it. Sometimes it isn't even possible to fix, such as an airframe out of rig due to damage history or significant corrosion. But if you've bought a plane with bad radios, you can cure it quickly, much more inexpensively, and for all time.
This advice applies mostly for cheaper airplanes. After all, for $20,000, you can't expect everything, especially since the engine and airframe come first. However, by the time you've moved up to a $70-80,000 plane, you have a perfect right to expect more, including all the bells and whistles.
When shopping for a used airplane, what are the most important things to look for? A strong engine and a good airframe. Remember that when your engine fails at 10,000 feet, or when a wing falls off, all the fancy radios in the world won't do you a bit of good. So if you're worried about avionics, get your priorities straight, and make your decision accordingly.
By the way, I've actually had people make a decision on an aircraft on the basis of its color. Don't do that. It's dumb.