Lessons Learned Include Funding, Aircraft Variety

by ANN Correspondent Chris Esposito

Yesterday, ANN reported on Chesapeake Sport Pilot's start-up experience, as well as the background of the owners, Tim and Al Adelman. Today, we continue the story with more on the wisdom the owners gained in forming an LSA flight school.

As with most successful flight schools, maintenance was an expense the Adelmans had already taken into consideration. Tim and Al found the maintenance costs associated with the 100 hour inspections and engine reserve fund tacked on almost $20 an hour to their total operating cost for each aircraft. Fuel was inexpensive due to the powerplants and limited horsepower of the LSA aircraft, and Chesapeake's owners found the average fuel burn to be about 4.5 gallons per hour. For fuel alone, the cost to fly each aircraft is almost $20 an hour.

Another important aspect of the school's financial structure is payroll. As a CFI, Tim understood how important it was to pay instructors well, and the school's CFIs are the most well-paid flight instructors in the area. They are paid per hour of flight, so they are free to create their own schedules and only work when they want to. The staff also has the extra benefit of being able to rent aircraft for close to the operating cost.

Tim cautioned against underestimating costs for insurance and financing, as well as for any airport fees you might incur. Insurance for each ship runs around $6,000 per year, and general liability insurance for the premises is close to $1,200 a year. The cost for financing the aircraft depends on the purchase price, but is usually in the $1,000 per month range. Airport tie downs and airport fees can rack up another $300 a month, and of course it is recommended to have money saved for miscellaneous expenses.

Accounting and keeping track of students should not be taken lightly, as TSA audits are likely for new schools. Tim says to make sure students' folders have all the information necessary for TSA audits, as this is easy to overlook. Chesapeake Sport Pilot features an online credit card system for transactions, and online scheduling that also lets students view their accounts to see how much money they have left. The school restricts online scheduling for students during certain times of the day, but allows renters with a rating to have access to the aircraft at any time, and provides the keys for after-hours flights.

The Adelmans mentioned that a pro forma (a model of future finances) is a necessity, as it will allow you to form goals such as flying f40 hours a month. By calculating operational costs and expenses, one can estimate potential income. Tailoring your financial plan to the intended consumer is also important. This is what led Chesapeake Sport Pilot to obtain the Sport Cruiser and Tecnam.

Some of the school's students liked the "fighter pilot feel" of the Sky Arrow, but others expressed interest in a sleek-looking aircraft for short hops and pleasure flying, which led to the Adelmans adding a Sport Cruiser to their fleet. Others wanted something similar to a 172, which pointed the school towards a Tecnam. Experienced pilots looking for something fun to rent wanted advanced avionics to play with, and in response to this Chesapeake ordered another Sport Cruiser with a Dynon avionics package.

Finding students for the flight school came naturally, as the school's previous research showed a tremendous demand for a light sport school. "We have not paid for a single advertisement yet." says Tim.

Using online forums, word of mouth, and websites such as www.sportpilot.org, Tim was able to generate traffic and the flight school expanded quickly. While the school was only formed in February of 2007, Chesapeake already has 60 students, and a three week wait for new students.

The school is now flying each plane 70-90 hours a month, and will soon have four active light sport aircraft. "We're adding two more airplanes later this month and a fifth one this fall." says Al Adelman. New students are also coming in at the rate of five per week, and at start-up they were adding two new students per day.

The Adelmans plan to sell their fleet of sport aircraft as they age and replace them with factory-new planes. The two owners see opportunity to flip the airplanes in the used-LSA market.

For those who are interested in starting their own light sport schools, the Adelmans said their initial start-up cost was $25,000 for a one-aircraft school, and would be about $41,000 for a two-aircraft school. The owners recommend a much larger reserve than this for unforeseen expenses, and also recommend buying two of the same aircraft so there is some redundancy in the training fleet should one plane go down for maintenance.

Chesapeake Sport Pilot is an example of a flight school that was not simply started on a whim, but thoroughly researched by its owners. The school is so busy students are waiting three weeks to get started, and the school is continuing to grow. "All of our expectations have been met." says Al.

FMI: www.chesapeakesportpilot.com