Disadvantages of an Aircraft Partnership

by Andrew Czernek, aczernekATcomcast.net

Advantages of Partnerships
Disadvantages of Partnerships
Financial Issues
Other Issues
Legal Organization

Agreement for a Non-Profit Corporation
Agreement for a Lease Corporation
AOPA Resources

The first thing that occurs to those of us considering a partnership for the first time is the possible conflict over scheduling. In the “Other Issues” section we’ll explain the ways that we’ve seen partnerships handle it. My experience has been that schedule conflicts are relatively rare, but the day will come when someone can’t make it back due to weather or mechanical problems. In these days of universal cell phones, it’s easier to alert fellow owners but the delay can still change your plans at the last minute.

But we felt so strongly about safe operation of the plane over the possibility of inconvenience, that we inserted a line in the bylaws saying, "It is important to note that members place the priority on sale operation of the aircraft above its return at a designated time."

If you’re very particular about handling the aircraft, a partnership is opening yourself up to headaches. Other people will fly the airplane differently and issues such as “should we run the engine lean-of-peak?” can split the most-knowledgeable of pilots (and A&Ps too). Your partners will occasionally leave seat belts unfastened or leave set radios differently than you; guests will inevitably leave a gum wrapper in the plane. If that’s too irritating, don’t take on a partner.

Each of the three partnerships that I’ve been in has lasted for years. In each case we’ve seen pilots come and go about every 3 years. So, change is something else that you’ll want to be open to seeing.

In the partnership that owned the J-model Mooney we discussed openly what our objectives were during our annual meeting at a pub. One partner was planning a career change and felt that he’d be well-served buying a less expensive (i.e., slower) aircraft. The newest partner wanted to wait 12 months before making a decision. And I was ready to buy a Mooney 252 but had no urgency and was willing to wait 12 months while investigating the market for turbocharged aircraft. We finally sold the Mooney 201 near year-end and dissolved the corporation.

Revision: 10/28/2010