081 proposal from EE

Wed Apr 15 23:20:48 EDT 2009

I think with either 976 or 081, we'll be getting animal just different issues.  Personally, I am a fan of 081 only because of the feel of the controls and the comms;  but with 976, we could take possession of it "clean", as opposed to 081 would be off the line in a year or so (probably next summer).  So, if I had to choose one, I guess I'd stick with 976.

The biggest hurdle is clearly the upfront cost, and EE financing is making it look more and more unattractive with every report we get.  $15,000 isn't a bad price for the engine at all.  As for the rest of it however, I think he is trying to cover their book value at $35,000 as opposed to it's market value (because I still can't believe that it is worth that much).  But maybe I'm wrong.  So tell me I'm actually off with the value.

Since it's appearant that they have us hooked and are now trying to encourage us to just buy the plane, I will throw that option out there.  Because, if they want us to pay $33,000, why wouldn't we just pay $50,000 and be done with it?  Unfortunately, the more upfront cost there is, the fewer of us will join in, which will conversely raise the upfront cost.  I also don't think 20 people want a 1/20th share of a 1975 trainer plane anyway.

So, here's the idea I'll just throw out: two of us can buy the plane straight out and sell it back to the club at 6% (basically do what we thought EE was going to do but aren't).  This works two-fold.  Not only will it make it simple for the club to take memberships at a lower buy-in and increase the chances for success, it also takes the group pockets out of the negotiations.  They'd only be dealing with two buyers instead of multiple buyers with multiple pockets.  Those two buyers also become competetition if they are serious about financing at 8%.

Well?  Thoughts?

Todd

--- On Wed, 4/15/09, Bob Irving <rhirving at verizon.net> wrote:

From: Bob Irving <rhirving at verizon.net>
Subject: RE: 081 proposal from EE
To: "'Eagle East Flying Club Core Team'" <eefc-core at workingcode.com>
Date: Wednesday, April 15, 2009, 9:12 PM

As I think I said, I don’t think $15,000 is reasonable price to expect for a factory remanufactured engine. I would bet the cost is closer to $20,000.  Anyone can check by contacting Penn Yan with model number and ask them.

From: eefc-core-bounces at workingcode.com [mailto:eefc-core-bounces at workingcode.com] On Behalf Of Steve Gordon
Sent: Wednesday, April 15, 2009 8:33 PM
To: 'Eagle East Flying Club Core Team'
Subject: RE: 081 proposal from EE

If EE was willing to install a new engine on 976 for $15,000, would they be willing to do the same for 081 when it reaches TBO?

The following numbers assume we can expect an engine overhaul from EE for $15,000 once 081 reaches TBO:

You’re right that we would need to accelerate the overhaul fund.  One option is to bootstrap it upfront from our membership (an extra $1,000 per member give or take).  We could raise the monthly dues temporarily (would be an extra $83/month for 12 members to catch up in 12 months).  The third option is to raise the hourly cost by $30/hr.

Here are how the numbers break down using the spreadsheet:

Option 1 (overhaul funded up front):

One Time Fee:  $1,180.00
Monthly Fee:     $50.63
Hourly Fee:         $60.30

Option 2 (overhaul funded with monthly dues increase) 

One Time Fee:  $380.00
Monthly Fee:     $133.96 (for first 12 months)
Hourly Fee:         $60.30

Option 3 (overhaul funded with hourly fee increase) 

One Time Fee:  $380.00
Monthly Fee:     $50.63
Hourly Fee:         $90.30 (for first 400 hours)

We could also do a combination of any of those three options.  For instance, we raise the up-front cost only half the amount of option 1 and we raise the monthly dues half the amount of option 2.  Option 2 leaves the possibility that we reach TBO before we’ve saved enough for an overhaul (if we fly 400 hours in less than 12 months).

I’ll reserve my opinions on preference until after the group has a chance to comment on this.

Thanks,

-Steve 

From: eefc-core-bounces at workingcode.com [mailto:eefc-core-bounces at workingcode.com] On Behalf Of Bob Irving
Sent: Wednesday, April 15, 2009 7:24 PM
To: 'Eagle East Flying Club Core Team'
Subject: RE: 081 proposal from EE

Don’t forget that we could/would easily put the remaining 400 hrs on 081 in 12 months. Then we face an expense of a new engine. I think it would be much more than $15,000.

Bob

From: eefc-core-bounces at workingcode.com [mailto:eefc-core-bounces at workingcode.com] On Behalf Of Steve Gordon
Sent: Wednesday, April 15, 2009 7:16 PM
To: Eagle East Flying Club Core Team
Subject: RE: 081 proposal from EE

Considering SMOH it is exactly the same price as 976. At $15,000 for overhaul over 2,000 hours that's $7.50/hr. With 400 hours remaining that's $3,000 value left in the engine which is precisely how much more they are asking for 081.

I don't care about the paint unless it affects the airframe integrity (corrosion). If it's a basic 172 we purchase it just needs to be functional and cheap. I understand if some of you feel otherwise.

The financing opportunity on 081 is good. It alleviates the need for a complex membership structure.

You know, I seem to remember that 081's engine was shipped out for maintenance not more than a year ago. Metal in the oil. Makes me wonder if they did an overhaul then. They couldn't have put 1600 hrs on it in less than a year, right?

-Steve 

Sent from Windows Mobile Smartphone.

From: Bob Irving <rhirving at verizon.net>
Sent: Wednesday, April 15, 2009 5:58 PM
To: 'Eagle East Flying Club Core Team' <eefc-core at workingcode.com>
Subject: 081 proposal from EE
According to Sean tonight 081 could be purchased for 38,000 with 15% down and 8.5% for 60 months. 081 has about 5750 TTAF and 1600 SMOH on the engine. I have no idea what it has for equipment nor do I know the condition. I do not know anything about the history or logs. We all know it desperately needs paint which is a 10-12,000 cost and substantial down time on the aircraft – maybe 2 months.  

Let me know your thoughts on this.
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