Chapter IV
FIRST STEPS IN ORGANIZING A small, dedicated group is ideal for the task of organizing a flying club. Ten starting members is considered a good, workable group, but some excellent organizations have gotten underway with less. Large groups tend to be unwieldy and inefficient while small groups are better able to reach agreement on the important, fundamental decisions which must be made to get the organization underway.
Decide Type of Club To Organize Upon this nucleus of people will fall the responsibility for making decisions which will shape the future of the club. They will have to decide the type of club to be organized, investigate the cost of various plans, and will have to pass on such important matters as incorporation papers, the club constitution, the by-laws and set up the flying regulations.
In the pursuit of these decisions the organizers will spend many interesting and productive hours. Each member of the group should be aware at the outset that he will be asked to spend considerable time on the project.
An efficient chairman, a good leader, should be selected who can assign responsibilities and get cooperation from all members of the group. By assigning specific duties to each member and asking him to report back to the group the time of each of the members can be used to best advantage.
It will be helpful if one member of the group has had previous experience with flying clubs or with flying equipment and procedures. An attorney will be exceedingly helpful in the initial stages. If he plans to become a member, so much the better. A good businessman who can help in analyzing the costs of the club operation will also be an asset.
Investigate Costs As economical flying is one of the primary aims of a flying club the investigation of costs becomes the first order of business for the club's organizers. No financial commitment of any kind should be made until a complete cost picture has been developed. This way all will know exactly what their commitment will be.
The best source of cost information is existing clubs in the area. Their cost experience can usually form a guide for a new organization. Consulting a good existing club offers another benefit. By drawing on their experience the new club can avoid false starts and mistakes.
Another excellent source of information is the Fixed Base Operator. He is familiar with the cost of such items as equipment, maintenance, operating costs, and operations. The club will, in most instances, be dealing
closely with the Fixed Base Operator and it is a good idea to get to know him early in the organizational phase.
Aircraft manufacturers representatives can also be very helpful in arriving at realistic cost figures. Cost will, of course, vary depending upon the type of equipment finally selected. Hence, it is wise to consult on costs of various types and makes of aircraft.
Closely related to costs is the decision on the type of club to be organized.
In some states educational clubs do not have to pay gasoline taxes while other types of clubs are required to do so. Tax and incorporation laws should be thoroughly investigated to make certain that the most suitable and economical plan is followed.
In figuring the costs of operations the organizing group should take a realistic look at the services which will be rendered on a voluntary basis by members and those services which will have to be paid for.
Incorporate The Club and Develop A Constitution and By-Laws For the individual protection of club members and for efficient operation it is essential that your club be incorporated. For maximum protection the articles of incorporation should be drawn and executed by a qualified attorney.
As discussed elsewhere, it is to the advantage of the club to have an attorney who is interested in flying as legal counsel for the organization.
Appendix A of this publication is the Constitution of the Longhorn Aero Club of the University of Texas. The Longhorn Aero Club is one of the most successful college clubs in the country.
The Operating Rules and the By-Laws of the Sky Roamers Flying Club (Appendix B and C) are those of a large businessmen's club.
These samples can serve as a guide for the incorporation of your club.
By adapting them to your specific needs with the assistance of an attorney you can develop the most suitable constitution, articles of incorporation and by-laws for your own organization. It may be that you will want to consult other clubs for advice and guidance in drawing up your constitution and by-laws.
It is vital that the duties and responsibilities of the officers of the club be clearly defined so that there will be no confusion about who makes what decision. It is suggested that an organizational chart be drawn up to suit the size and structure of a new flying club. The following one is used by a flying club of approximately 80 members.
Even in a small, new club it is recommended that a General Manager be appointed. He, working under the officers of the club, will exercise control over all scheduling, maintenance and other operating areas. The other functions in the smaller club may be combined and assigned to club members for operating efficiency.
Board of Directors Officers (President, Vice President, Sec-Treasurer) General Manager Safety Officer Operations Maintenance Chief Manager Manager Accountant Good leaders should be selected as club officers-persons who can assign responsibilities and get cooperation from all members of the club.
11 348-208 0 - 69 - 3
Good relations with the fixed base operator are highly beneficial to the day-to-day operation of the club.
Many types of aircraft are used by flying clubs N3561 modern high-performance general aviation aircraft . or historic fighter aircraft converted to civil operations like this F-51.
Chapter V
OTHER IMPORTANT STEPS Establish Flying Regulations No single document of the club is more important than the flying regulations governing the use of club aircraft. The regulations will, to some extent, be determined by the type of club and extreme care should be taken to insure that rules offer maximum protection to the club.
The Flying Regulations of the Longhorn Aero Club and the Sky Roamers Club (Appendix A, B) may be used as a guide in drawing up your club's rules. You may wish to obtain sample regulations from other clubs to help guide you in formulating yours.
Once the rules have been carefully determined the success of your club's operation will be in direct proportion to the enforcement of the regulations.
Absolutely no infringement of the regulations should be permitted and those who violate the rules should be dealt with promptly.
Consult The Fixed Base Operator An important ally, both in the formation of a club and in its operation, is the Fixed Base Operator (FBO). It is recommended that he be consulted during the early stages of organizing a club because often his experience with other clubs will be extremely helpful. In addition, he can provide the new club with realistic advice on purchase of aircraft, costs of operation, and what help he and his organization can provide for the club.
Good relations with the FBO are highly beneficial to the day-to-day operation of the club. There have been many cases in which clubs have been overly demanding or inconsiderate of the FBO with resultant friction.
The FBO, to be sure, can benefit from the operations of a good club. If relations between club and FBO are good, however, a progressive FBO will extend himself to be helpful. The club's safety officer should work with the FBO's chief pilot to monitor the overall relationship between the club and the FBO.
The return to the FBO should be commensurate with the amount of time and effort he devotes to helping the club in its operation. To expect too much from the FBO without payment for services rendered can place a strain on the relationship and make for difficulties for the club.
Some groups have found it to their advantage to contract with an FBO for the provision of all aircraft and facilities involved in their flight operation. In this way, the club may avoid large capital expenditures which may be a great help to a new club until it is well established and in sound financial condition.
Recruit Members Following the initial stages of organization performed by a limited number of members, the next step is to recruit additional members up to the number desired for the flying club.
There are three primary considerations in membership recruiting:
(1) The members sought should be of the type that will be compatible with present club members and with the aims and objectives of the club.
(2) A sufficient number of prospective members should be developed to keep the club at full strength. For a number of reasons there is almost always attrition on the number of members. For maximum utilization of equipment and to keep club activity at full swing it is desirable to have a waiting list of approved applicants.
(3) Recruiting is the job of every member of the club. Members should be constantly on the lookout for the kind of members who will fit in with the club. Usually those recommended by present members will be the kind of prospect in which the club is interested.
Where To Look For New Members Besides the personal contact of present members there are a number of ways to attract potential members. In every community there are people who have an active interest in flying. Some of them may already be pilots while others, for cost or other reasons, have not taken up flying despite an interest in flying.
The most logical place to find prospective members is in other organizations to which you belong such as social clubs, business and professional clubs, employee clubs, athletic clubs and your place of business.
Beyond personal contact, publicity of various kinds can help call attention to your organization and attract prospects. When your club is organized be sure that your local newspaper has the information to run an article. Place notices on bulletin boards at your local airport, run classified ads in your newspaper, send letters to clubs and organizations requesting they be read to members, make an announcement in local aviation news.
The local fixed base operator may be a source for new members. Those people he may be unable to serve may find a flying club will suit their needs.
From time to time it is a good idea to have a visitors' night at your club meeting. The activities of the organization can go a long way towards interesting prospective members.
An active new members committee should be appointed and be given the responsibility of promoting the club to prospective members. Remember, members will be moving away, others may decide to purchase their own plane and some will lose interest or for some other reason cease participation. Only continual effort will keep your club at full, effective strength.
Select The Aircraft The methods by which a club can obtain equipment has been previously covered on page 7. We are now concerned with the actual selection of the aircraft to suit the needs of the club's membership. No decision the 14
club can make will be more important to the success of the organization than this one. It should, therefore, be approached with thoroughness and judgment.
If a club is in the initial stages of organization the membership will, of course, be small. A committee of two or three formed from the organizing group may well be selected to do the "shopping" and report back to the full group. In an already organized club it will be found that a small group will also be the most effective. The committee can then report back to the total membership with its findings.
New Or Used Equipment?
The first inclination of a group just getting underway is to attempt to save money by purchasing used equipment. As is the case with secondhand cars, the result is often buying someone else's headache. The savings realized in purchase price are likely to be squandered in increased maintenance costs. And, used equipment, unless thoroughly checked, can present adverse safety factors. The Federal Aviation Administration's Advisory Circular (AC 20-5A) entitled "Plane Sense-General Aviation Information" and the motion picture entitled "Plane Sense" are of value for club members to review. The film is listed in Appendix E to this publication. The advisory circular is available from your local GADO, see Appendix D.
If the decision is made to purchase used equipment the club should make certain to get good professional help in checking out the equipment. A plane which requires excessive repairs is not only expensive, but it can seriously cut down on flying time for members with a resultant loss of interest. A bad buy in the interests of economy can actually cripple a club before it gets started.
Because the selection of the right aircraft is so vital to the success of the Aying club the "shopping" should be as thorough as possible. The committee should:
(1) Shop a number of makes and types to find the most suitable equipment for the club. Careful shopping can also result in realistic savings.
(2) Make a check of other flying clubs and plane owners to get their opinion of equipment. "Ask the man who owns one" is as applicable to aircraft as it was to automobiles.
(3) Seek the help of the Fixed Base Operator. The chances are he has had considerable experience with a number of makes and types of aircraft and can help the committee decide on the airplane best suited for the needs of all members.
(4) Take into consideration the other purchases required such as tiedown charges, windshield covers, jacks and other necessary equipment.
Finance The Purchase If the club has decided to purchase its equipment it may wish to finance the purchase. Members of the club who are familiar with bank loan and interest charging procedures should be selected to come up with the purchase plan most advantageous to the club.
Aircraft, like automobiles, are financed by banks, special aircraft loan organizations and by manufacturer sponsored finance companies. Credit unions will also provide financing. Down payment requirements generally are between 20 percent and 30 percent of the purchase price with the balance paid in equal monthly installments from two to five-year periods.
This kind of financing makes it possible to offer a low initial payment per member and to make the monthly payments a part of the individual member's monthly dues. Be sure to check on prevailing interest rates on this type of loan to make certain the club is getting the best deal possible.
In clubs where members are able to raise the complete purchase price the cost of financing can be eliminated. This direct purchase is, of course, the most economical system, saving up to 30 percent of the principle over a five-year financed plan.
Under the lease-purchase plan the club still pays interest in leasing fees.
This plan, however, has the advantage of the seller's responsibility for the equipment. If the equipment is faulty he will have to replace it. At the end of five years the airplane, of course, becomes club property and can become an excellent trade-in for the purchase of new equipment.
Purchase Adequate Insurance Adequate insurance coverage is of vital importance to a flying club.
Coverage is required for aircraft bodily injury liability, aircraft property damage liability, aircraft passenger liability, aircraft hull insurance (damage to aircraft) and, it is desirable to have medical payment insurance for passengers and pilot.
Insurance costs, particularly for a new club, are inclined to be high and there is, in fact, a reluctance on the part of many insurance companies to grant coverage to flying clubs. This is because a number of flying clubs have proven themselves to be poor insurance risks, a situation brought about by improperly run clubs. Often new clubs must establish a record for safety and dependability before insurance rates can be brought into line.
Favorable insurance rates can be obtained when the club demonstrates it is a responsible operation and answers the criteria established by insurance underwriters. In the initial stages an insurance agent familiar with aircraft insurance should be brought into the picture to advise and assist in getting adequate insurance coverage.
Insurance rates are also affected by the type of flying club. Most companies charge less for a business flying club and highest rates for a training club and recreational club rates falling somewhere between the two.
Assistance in making decisions about insurance and obtaining coverage can also be obtained from an existing club and from the Fixed Base Operator.
Good management and safe operations are vital to reasonable insurance rates. An unsafe, careless operation will find higher insurance costs and, perhaps, cancellation of insurance coverage.
Chapter VI
THE CLUB IN OPERATION Operating a club after all the plans have been made and approved by the membership is hard work for somebody, even if the club is modest in size. The very best efforts in planning can be lost if capable, dependable people are not assigned to the task of making the plans work. All too often in a new club the delivery of the aircraft signals the end of the efficient effort that has gone into organizing the group.
The key to efficient club operations is THE OPERATIONS MANAGER.
In a small club he may well be an officer of the club and in addition serve as head of operations. In a larger club operations will be his sole responsibility. In very large clubs he is often a full-time employee. Whatever the size of the club he serves in a capacity similar to that of a general manager in a business.
He is responsible for the operating condition of the aircraft and related equipment. He must see that the aircraft are inspected, serviced and that ground time is kept at a minimum. He must see that the equipment is well cared for and supervise the scheduling of the aircraft. He is responsible for the keeping of complete cost records on all operations.
It is his responsibility to see that the services of a flight instructor are made available to the membership. If he has an instructor's rating himself, so much the better. In any event, he should ideally be an experienced pilot.
His job is a demanding one and he will generally be working hardest on weekends and holidays when members are enjoying the fruits of his managerial ability. If his job is well done the members will be encouraged to fly. If he is ineffective it will result in the loss of interest on the part of the members and the failure of the club.
The amount of assistance the Operations Officer can obtain from the Fixed Base Operator will affect his duties. Where the Fixed Base Operator is able and willing to assist with maintenance and scheduling he can, under the supervision of the Operations Officer, assume a number of duties. He will, of course, have to be paid for his efforts and these costs will be reflected in the cost of flying.
A club SAFETY OFFICER should be appointed as soon as the club is organized. It is his responsibility to see that the club's flying rules are strictly adhered to and he must serve as a double check on the operations manager where maintenance, operation and training activities are concerned.
In a small club the president or other officer might well serve as Safety Officer. In larger clubs it is advisable to have him separate from the of- 17
ficers and operations function. Where a club has a Chief Pilot the attention to safety is usually his responsibility.
As in the case of the Operations Manager the Safety Officer should be an experienced pilot familiar with various types of aircraft both from a flying and maintenance standpoint. His attention should constantly be directed towards finding unsafe practices and correcting them, whether they apply to pilot or plane. In the broad sense SAFETY is the responsibility of every member of the club. Even the enforcement of safety rules is a general responsibility. One member who violates flying and safety rules can ground a club for weeks, or for good.
The third important member of a club's management team is the TREAS- URER, or chief financial officer. The financial affairs must be in the hands of a competent person. Inefficient financial management can ground a club as easily as badly maintained aircraft.
It is the Treasurer's responsibility to see that those concerned with operations keep sufficient and accurate records and that the information is promptly turned over to him for payment of bills and for billing of members. A Treasurer should have a financial-business background and be willing to spend the time required to keep the club's financial situation under control.
The amount of work this entails should not be under-estimated. It's a time-consuming job and one that requires an excellent individual.
When competent people have been appointed or elected their success will be no greater than the support and confidence they receive from the membership of the club. Those selected must be given the authority to fully execute their responsibilities and to enforce the rules and regulations of the club.
Particularly in small. new clubs great demands will be made on club officials. They will require the full cooperation of the membership in order to make the club work safely and efficiently and to provide safe, low-cost flying for the members.
The Cost of Flying What will the cost of flying be? Only by assembling accurate cost estimates can a proper club budget be constructed. Flight charges and dues can only be fixed when club planners have accurately estimated for the entire first year of operation. Then it can be determined how the costs are to be met by the membership.
The way in which the charges are made will depend pretty much on how the club is organized and on the type of members it has. Some systems have low monthly payments and include the cost of financing, insurance and operations in the hourly rate for flying. Those members who fly most, then, pay the lion's share of the cost.
In other clubs where members fly almost equally, the amortization and interest charges, insurance fees and other indirect flight expenses are prorated among the members in the form of annual or monthly dues.
The Fixed Base Operator can be helpful in arriving at realistic costs and in arriving at an accurate, complete cost picture. Following is a form for estimating annual costs which was developed and is used by Flying Clubs International.
ESTIMATING ANNUAL COSTS Fixed Costs Per Year
a. Hangar rent and tiedown fee...
b. Insurance (aircraft hull coverage)_.
c. Insurance (Property Damage and Liability) -
d. Depreciation (taxes should be added). This figure is computed at the rate of 10 percent. Common insurance practice is to depreciate new aircraft at the rate of 20 percent the first year and 15 percent (of the depreciated value) per year thereafter_.
e. Finance-Monthly payments on loans and interest if aircraft is direct purchase or on lease-purchase plan.
f. Operational expenses:
(1) Direct operations cost (gas and oil per hour of flight) based on a minimum number of flight hours per year (say 400 hours, if no previous history) - $
(2) Maintenance costs per year based on minimum number of flight hours annually (use same total as above). See manufacturer's estimates for type of aircraft and add 5 percent._ _-.
(3) Maintenance reserve for engine overhaul and aircraft inspections. (Use same number of hours as in Number One and consult manufacturer's estimates and add 5 percent.).-
(4) Appointment service-Includes airport management and scheduling service, if any. Is it a monthly fee or charge for each hour of flight?-
(5) Management or Operation's Supervision. Even if this is a voluntary service by a member, there will be some expenses involved. (Consider telephone charges, correspondence, etc.) If service is contractor supplied by fixed base operator, the total fee can be estimated above..
(6) Administrative expenses-Includes monthly mailing costs, telephone charges, and other expenses such as meeting room charges, membership in organizations, etc.. $
(7) Clubhouse expenses-Should the club maintain its own club house and meeting rooms, these costs should normally be considered separate of flight costs but they must be made part of monthly dues-- Total fixed costs per year-.
Estimated cost per month_- Actual flying costs are estimated on the number of hours the club plane is to be flown. Following is a check list for estimating the hourly and the total annual costs of operating the club airplane:
19 348-208 0 - 69 - 4
ESTIMATING FLYING COSTS Total based on hrs.
Cost of Aying per hour per year
a. Gasoline: gallons at $ per gallon (Divide hours between changes by 25 and con- sult manufacturer's estimate of hourly con- _quarts at $ . per quart sumption) -.
c. 25-hour engine check (divide cost of check by 25.
Work must be accomplished by licensed mechanic)_.
d. Engine overhaul and repair (divide cost of overhaul and repair by number of hours flown since last operation or use manufacturer's estimates.
All work must be accomplished by licensed engine mechanics and approved shop)-..------
e. Aircraft overhaul and repair (divide cost of overhaul and repair by number of hours flown since last overhaul or consult manufacturer's estimates) _ --. **
f. Parts and tires expected to be replaced between each overhaul period (estimates to be secured from the manufacturer or to be based upon past performance history of the aircraft). This figure should include parts for instruments, radios and other equipment_-
g. Should the club elect to charge off depreciation and taxes, and some or all of aircraft Hull Insurance and finance charges to each hour of flight, this figure should include the annual total of these items, divided by the estimated total hours to be flown annually. (This figure will range from 400 to 800 hours, depending upon the type of club and number of members. If a large number of members are learning to fly, then the figure should be high.) This system means that members pay in proportion to their use of the club airplane.. ***
h. Instructor's fee (not to be included as this applies only to those taking instructions). And this price usually ranges from six to ten dollars per hour.
Members pay instructor direct for service.- Total cost per hour_.--- Grand Total_ - - *If your club is composd of a large number of members taking flying instructions, then the cost per lour of fuel should be estimated at least 10% higher than that for a club where the aircraft is used primarily for cross-country flight. Landings and take-offs and other training maneuvers mean longer periods of high performance of your engine. Gas and oil consumption will be higher.
**Overhaul time for your airframe, engines and propel!er will vary according to the type of each.
However, most engines in light aircraft will require overhaul at 800-1000 hours if used for training or 20