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da42 lease

Posted: Tue Jan 14, 2020 12:20 am
by iceathlete
Theres a need for a twin for a local flight school near where I live.

Do you know what a dry lease would typically run for a flight school that would fly the plane 500hrs a year, take care of all maintenance, less engine and prop overhaul? Just looking to get an idea of cost of ownership with a leaseback based off of Diamonds estimate of less than $50/hr MX for a 2000hr cycle. Thanks in advance

Re: da42 lease

Posted: Tue Jan 14, 2020 1:44 am
by Colin
If there is a need where you live, shouldn't they tell you what they are willing to pay? Would a small local flight school really use it 500hrs per year?

You might want to contact Angel City Flyers (or I guess Bay City Flyers is closer to you) and see what they would offer. They have quite a few DA42s on the line.

Re: da42 lease

Posted: Tue Jan 14, 2020 4:16 am
by shorton
The most common flight school "leaseback" model provides for the flight school to receive x% of the wet rental rate with the rest flowing to the owner. The owner then pays all of the bills (fuel, maintenance, insurance, etc). X is often 15-20%.

Of course, there are other possibilities, but this type of revenue sharing structure is really the only way for the owner to claim active participation and, therefore, avoid the passive activity loss rules of the Internal Revenue Code. There's a lot more to it, but any type of "lease" to the flight school will make the owner a passive participant.