IT'S A TERRIBLE IDEA!

There are several major disadvantages to leaving YOUR aircraft in someone else's care. First, of course, is the obvious- you'll still have to schedule your flights in advance! One of the major incentives for owning is the freedom to fly when and where you wish, and to change your schedule according to a whim- a freedom you lose the moment you sign that leaseback agreement.

Second, no matter how refined the clientele at your flight school, they will not all treat your plane as if it were their own. You'll be totally ignorant of the hard landing, excessive leaning, or other abuse that will leave you with the repair bills. Which brings us to the most valid argument against a leaseback: maintenance.

Under the terms of most leaseback agreements, the lessee assumes the responsibility for keeping your aircraft airworthy and "rentable". YOU, on the other hand, get to pay the bills! We have often seen this arrangement abused as FBO's perform maintenance that could be (safely) delayed, replace parts that could be (safely) repaired, and in extreme cases, bill the owner absurd hours and charges for routine 100 hour inspections. (In one case we saw an owner/lessor billed over $1,500 for the FIRST 100 hour inspection on a BRAND NEW 1999 Skyhawk. Since all of the expensive parts were under warranty, at $60/hr. this equates to 25 hrs of labor- 3 full days!) And, if the flight school is experiencing financial problems, the very first people NOT to get paid are usually the aircraft owners. Sadly, they then usually opt to leave the plane where it is, in hopes of making it up NEXT month (and we all know how that goes!

Even if this is not the case, consider that with a combination of an unexpected 100 hour or major repair combined with a poor weather month can have you owing the FBO! And, of course, that's AFTER you make the loan payment, insurance, tiedown fees, etc.

Leasebacks are such a poor deal as a rule that many major banks will not finance an aircraft if they know it will be put on leaseback- they understand the financial risks all too well.

Now before we get inundated with email "flames" from FBO's and mechanics, we should say that we HAVE seen leasebacks work. With trustworthy and conscientious FBO and maintenance partners, as well as a high rental usage (and rate), a leaseback arrangement can prove to be beneficial to all. Unfortunately it's the exception rather than the rule.

We strongly recommend against leasebacks, and suggest finding a partner or two as an alternative. (Click HERE to learn more about aircraft partnerships).