I keep telling myself it's the 'cost of capital' that has me doing the 'smart' flying in a beater 51 year old TP. But we all know that's not true - I just don't have the capital to begin with.

It’s a good point. For me it is all relative. It is worth what I have into it. It is not worth 6x more than I have into it just to get new plane smell. You argue the PC12 is the ultimate in utility value, which is fair enough, but others argue that we get the same utility for significantly less investment.

Good thing we have choices.

I make the same rationalization for why I didn't buy a new PC12 this year. Mine is 10 years old and need some cosmetic upfits.

I'm an active investor and I can make 5% after taxes pretty easily. I get the argument. But I have no desire to go through life not being a pilot. So I ignore capital cost when comparing airplanes.

However,..... If "single pilot" is number 1 on your list as it is mine I see no reason to ever spend more than $5MM on an airplane. Any that cost more than $5MM will soon trade at $5MM or below. I'm trying to never spend more on a plane than what my PC12 is worth now.

Jason,

One thing does not negate the other.

I am 100% with you about the value of flying as a "major lifestyle upgrade". But it does come with a cost. Similarly, it costs more to fly first class on the airlines than in coach.

You do make another point here that I think is valuable to also consider in the cost equation and that is the value of your time. I hadn't really thought about this much until Mark Hangen pointed it out in his jet analysis a couple of years ago. If one, or others in one's organization, are productively employed (one is not a trust baby for example) then the cost of that time should be factored into the total cost. As an example if someone making $1 million per year (or say $500 per hour) can reduce travel time by 2 hours per trip times 25 trips per year then that balances the capital expense we're discussing. "Lifestyle upgrade" is then a bonus which comes for free.

Cost of time is something I do consider which is why I never got into working on my airplane and doing my own annuals etc. But I just don't enjoy working on airplanes. Some guys do and I get that.

"Saving 2 hours per trip" is a big big IF. Mine and Penmans PC12 argument for a long time has been about "time savings". How much time is one saving owning a jet over a PC12. Phenom 300 has a 2.5 week type rating and much longer recurrent training than PC12. What happens if I can't land at EGE in the jet because of runway conditions and I have to land in Denver and drive up? There's "more to go wrong" when owning the jet. It needs more. It has more factors that are influenced by Murphy's Law than the Pilatus has. So I'm not sold that owning the jet will actually "save me time". I think it will actually "cost me time". But it's still bad ass and a box I need to check in life.

Well said Jon, and I think this is a reason the lower end of the airplane ownership world tends to be where the owner/operators reside.

While I'm not looking to upgrade in the immediate future, capital cost will be a major part of my decision. Each $500k of acquisition cost equates to $25k/year of either loan interest or lost opportunity cost (plus a higher risk of the asset not holding its value).

However, the equation works both ways: If a $1mm plane is $25k a year less to operate than a $500k plane (with everything else being equal, which it never is), then the two planes are essentially the same cost to acquire.

Robert

Cost of time is something I do consider which is why I never got into working on my airplane and doing my own annuals etc. But I just don't enjoy working on airplanes. Some guys do and I get that.

"Saving 2 hours per trip" is a big big IF. Mine and Penmans PC12 argument for a long time has been about "time savings". How much time is one saving owning a jet over a PC12. Phenom 300 has a 2.5 week type rating and much longer recurrent training than PC12. What happens if I can't land at EGE in the jet because of runway conditions and I have to land in Denver and drive up? There's "more to go wrong" when owning the jet. It needs more. It has more factors that are influenced by Murphy's Law than the Pilatus has. So I'm not sold that owning the jet will actually "save me time". I think it will actually "cost me time". But it's still bad ass and a box I need to check in life.

So, Jason, at what price and with which plane(s) would you make a switch?

I don’t understand why you won’t count the cost of capital although you will count the cost of fuel. Personally, I want to estimate ALL the costs, including expected depreciation. If I choose to fly with that knowledge then I know flying is worth at least that sum. Like you, Jason, I don’t have to justify my expenditure to anyone, so there is no need for me to bury my head in the sand.

Ashley

Yup, Greg was surprised too. Don't think for a moment there is no reciprocity between EPPS and Vector, whom I am assuming you used. Your engine is slightly different than mine, but if you paid more than 30k with everything gone to hell then I'd be a trifle upset.

I also am on EPPS during my annual..........generators replaced by Pilatus are 5,550 each. If you send them to get serviced, $2800 a piece.........but you have to ask for them to be sent out to serviced..........takes more understanding and involvement........most probably costs me more time than it's worth, but I do it anyways.



I reviewed that PDF, man that's aggressive marketing on Cessna's part...........Take off distance at 10,500 DA is 2k lower than what they are using at 5,000ft.

They're claiming cheaper by the hour maintenance, surely they jest.................

So, Jason, at what price and with which plane(s) would you make a switch?

I can't be any more clear than I've already been. Counting the cost of capital means "getting rid of the airplane all together" is an option and it's not. Never. No way.

Regardless.... cost of capital is the same for PC12 and CJ3 so it doesn't matter. Depreciation on the hand is wildly different between the 2.

Jason, how much could you get for your PC12 tomorrow if you turned around and sold it?

Somewhere between 3.1 and 3.2

Somewhere between 3.1 and 3.2