budget Archives - FLYING Magazine https://cms.flyingmag.com/tag/budget/ The world's most widely read aviation magazine Thu, 12 Sep 2024 14:44:02 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 Report to Congress: Shortsighted, Aging NASA Faces Uncertain Future https://www.flyingmag.com/modern/report-to-congress-shortsighted-aging-nasa-faces-uncertain-future/ Tue, 10 Sep 2024 20:26:46 +0000 https://www.flyingmag.com/?p=217494&preview=1 Researchers believe the space agency is prioritizing short-term wins and commercial arrangements over the personnel and technology that power it.

The post Report to Congress: Shortsighted, Aging NASA Faces Uncertain Future appeared first on FLYING Magazine.

]]>
A report published Tuesday raises serious questions about NASA’s ability to effectively function as the nation’s preeminent space agency.

The 218-page document, assembled by the National Academies of Sciences, Engineering, and Medicine (NASEM) at the behest of Congress, warns that NASA is prioritizing short-term missions and commercial contracts over the people and technology that make its out-of-this-world activities possible.

Per the report, the space agency’s emphasis on near-term victories and overreliance on private contractors comes at the price of a strained budget, degraded infrastructure, and exodus of talented personnel.

“NASA should rebalance its priorities and increase investments in its facilities, expert workforce, and development of cutting-edge technology, even if it means forestalling initiation of new missions,” the NASEM said.

NASEM operates under a congressional charter and comprises private and nonprofit institutions that provide independent analysis on public policy decisions. The academies release decadal reports on topics such as astronomy and planetary science, effectively giving NASA and Congress a roadmap for funding over the next ten years. The studies take years to put together and are considered influential within the spaceflight community.

Tuesday’s publication, titled NASA at a Crossroads, is a bit of an aberration. The report was requested by Congress in 2022 amid growing pressure from China, which in June became the first nation to return samples from the moon’s far side.

NASEM members met with experts, visited NASA centers, sent requests for information, and reviewed agency documents to inform their conclusions. The outlook, the organization says, may be bleak.

The State of NASA

The NASEM report paints the picture of an agency in turmoil from top to bottom.

Internal and external pressure from NASA and its benefactors has placed it in a bit of a tight spot. Agency senior center managers told researchers they would prefer to spend additional funding on new missions rather than facility maintenance or personnel training. But per the U.S. Committee on Human Spaceflight, NASA annually spends about $3 billion on missions it cannot afford.

“Each dollar of mission support that previously had to sustain a dollar of mission activity now has to support $1.50 of mission activity, effectively a 50 percent increase,” the report says.

In short, the agency’s workload is expanding more rapidly than its mission budget—and that’s absorbing money that could be better spent elsewhere.

NASA infrastructure is essential to the agency’s mission and is used by other agencies and private partners. But “chronic insufficient funding” has resulted in about 83 percent of the agency’s facilities, many of which were built in the 1960s, exceeding their design life. These aging assets are difficult to maintain, soak up valuable personnel time, and make NASA less attractive to prospective talent.

“During its inspection tours, the committee saw some of the worst facilities many of its members have ever seen,” NASEM said.

During its inspection tours, the committee saw some of the worst facilities many of its members have ever seen.

—NASEM

For example, according to the report, NASA’s Deep Space Network (DSN)—a network of radio dishes around the globe that receive and transmit data from missions—is too degraded to support current and planned projects without disrupting others. DSN locations over the next decade will cost tens of millions to maintain, it predicts, while contending with a thin workforce and failing infrastructure. The DSN budget in 2022 was $200 million, down from $250 million in 2010.

NASA’s employee turnover rate is largely consistent with the commercial space industry, per the report. But agency employees cited lower salaries and greater private sector involvement as deterrents to working there. In addition, NASEM found that women and minorities are underrepresented, leaving plenty of talent untapped.

Researchers worry the prevalence of certain commercial contracts, such as fixed-price or milestone-based, could make matters even worse by turning NASA engineers into contract monitors. These agreements stifle agency personnel by reducing hands-on work while opening the door for private companies to develop technology that, in the NASEM’s view, should be built in-house.

“Innovative, creative engineers don’t want to have a job that consists of overseeing other people’s work,” said ex-Lockheed Martin executive Norm Augustine, the lead author of the report, during a virtual briefing Tuesday afternoon.

A Tight Budget

NASA’s tendency to prioritize short-term missions over long-term success stems in part from a constrained budget environment.

Between 2014 and 2023, the agency’s funding actually increased by an average of more than 3 percent over the previous year. But over the past two decades, its purchasing power has essentially held flat while mission complexity has grown. During the peak of the Apollo program, NASEM estimates, purchasing power was about three times higher.

The 2023 debt ceiling agreement capped increases to federal non-defense discretionary funding for fiscal years 2024 and 2025, and NASA has felt the impact. Its 2024 budget left it with about half a billion less than it had in 2023. The 8.5 percent discrepancy between what the agency requested and what it received was the largest since 1992.

The funding cut gives NASA little wiggle room for certain missions such as Mars Sample Return, for which the agency has requested help from private industry to lower costs. Another high-profile program, the Chandra X-ray observatory, was placed on the chopping block, and several others have been delayed.

It could be a similar story in 2025. The White House’s 2025 NASA budget request, which seeks the same amount awarded in 2023, has been marked up by the House and Senate Appropriations Committees, with the latter’s proposal reading much more favorable.

Under the House budget, NASA would receive $200 million less than requested, a slight increase over 2024 in real dollars but below the current rate of inflation.

The biggest loser would be the Science Mission Directorate, which would get $7.3 billion—the same as 2024’s allocation, which represented the first cut to NASA’s science budget in a decade. A coalition of scientific organizations and more than 40 members of Congress believe the agency needs closer to $9 billion to support its dozens of space science missions.

Mars Sample Return could also suffer despite the House requiring it to spend $450 million more than NASA requested.

That’s because it would provide less than half of that money, leaving NASA to scrounge up the rest by axing other planetary science projects. The House would require full funding for certain programs, so only a few—namely Discovery, New Frontiers, and fundamental research—would be candidates for cuts. Within those programs are the critical Veritas Venus mission and Dragonfly Saturn moon mission, both of which could be jeopardized.

Also at risk is the Artemis lunar program, the successor to Apollo. NASA asked to shift funding from flight-proven components to novel technology that will be used on future missions, including the return of Americans to the moon during Artemis III. But the House mandates that the former programs maintain their historical levels of funding.

According to Casey Dreier, head of policy at the Planetary Society, that creates a roughly “half-billion-dollar hole” for the Lunar Gateway moon space station. To fill it, NASA will need to either redirect funds from other programs or significantly cut Gateway funding.

Artemis II and Artemis III have already been pushed to September 2025 and 2026, respectively, and NASA has hinted at delays to future missions. Earlier this year, it suddenly canceled development of the Viper lunar rover due to budget uncertainty.

“Future funding is clouded by the ever-declining federal discretionary budget from which NASA support is provided,” the report says.

Things may improve in 2026 when spending caps are lifted. However, NASA within the last year and change has lowered its budget projection for 2030 from about $30 billion to $28 billion.

Instant Gratification

NASA’s inefficiencies arise not just from its meager budget but also from how the agency uses it, the NASEM says.

The agency is often stretched thin by the sheer number of projects it pursues, causing setbacks to individual missions as in the case of Mars Sample Return or the James Webb Space Telescope.

Further, according to the report, many NASA leaders dismiss the need for long-term internal strategy, citing immense influence from Congress on its annual projects and budget. In short, the perception within NASA is that doing so would waste resources.

“Even planning for the advancing Artemis program lacks certain action-specific details associated with an architecture that is more complex and interdependent than Apollo,” the NASEM said.

But the lack of foresight by leadership results in unrealistic initial cost estimates, creating a domino effect that forces underfunded missions to pull money from other programs. The NASEM characterizes NASA’s internal research and development program, for example, as underfunded.

“The inevitable consequence of such a strategy is to erode those essential capabilities that led to the organization’s greatness in the first place and that underpin its future potential,” the report reads. “The profound negative consequences of this are felt far beyond the specific projects producing the delays and unanticipated funding demands.”

The NASEM recommended a total overhaul of NASA’s long-term mission planning process, including required “need dates” for capability and component needs. It also suggested that as responsibility shifts from NASA centers to specialized mission directorates, the agency should make sure its checks and balances are providing enough oversight.

An Eroding Base

Because NASA puts so much energy into its missions, the agency has neglected the engine that drives them: personnel and infrastructure.

Since 2017, only two NASA congressional authorization acts—which allocate funds from the Treasury Department and establish new programs and policy focuses—have been made law.  According to the report, “this inhibits the forecasting of workforce, infrastructure, and technology needs.”

On the infrastructure side, the NASEM recommended NASA work with Congress to create a revolving working capital fund (WCF) financed by the government and users of NASA facilities, similar to those for other federal departments. The agency could use the money to eliminate its maintenance backlog over the next decade and make continuous infrastructure enhancements.

Equally concerning is the agency’s workforce, which faces more competition for employment than ever before. Creating a commercial space ecosystem was a U.S. national policy goal for decades, and NASA has benefitted from working with private companies. These partnerships are necessary, the report argues, but verging on excessive.

Researchers contend that specialized, early phase mission work should be handled in-house, or NASA risks losing the talent that has propelled it thus far. Fixed-price or milestone-based contacts, such as the Artemis human landing system (HLS) agreements with SpaceX and Blue Origin, take agency personnel out of the picture. Many employees told researchers they would like more training or opportunities to hone their skills.

“In this case, NASA is more of a contract monitor than a technical organization capable of taking humanity into the solar system,” the NASEM said. “The concern is not only an erosion of ‘smart-buyer’ capability, but also of the capacity to invent and innovate.”

There is also the risk that a commercial provider exits the market or fails to deliver. A NASA inspector general report, for instance, blames contractor Boeing for certain delays associated with the Artemis program.

The NASEM directs NASA to invest in “early-stage, mission-critical technologies” that commercial firms have yet to crack, emphasize more hands-on work, and unearth new talent by targeting underrepresented demographics.

It could also seek to update the NASA Flexibility Act of 2004, which was implemented partially in response to the space shuttle Columbia accident and dictates what the agency can pay employees. By securing greater appointment and hiring authority, it could ease the burden of attracting and retaining talent.

Houston, Do We Have a Problem?

NASA’s budget woes have been well documented. The NASEM report, however, raises new concerns about how the agency uses what little it receives.

It’s not all NASA’s fault—the agency’s effort to scale back Mars Sample Return, for example, faces opposition from the House. If NASA must divert funding from other projects to support that mission, the blame would land squarely on Congress.

But the agency certainly isn’t helping matters. The neglect of long-term mission planning, despite lawmakers’ control over the budget, borders on ineptitude. Infrastructure and technology are dated. And private firms are snapping up talent faster than NASA can produce it.

Given the pressure the agency faces internally, from the government, and from its contractors, these issues are unlikely to resolve themselves without some serious effort. The hope is that the adoption of the Senate’s more favorable budget proposal, and the lifting of spending caps in 2026, could give it some much needed support. But NASA’s fortunes will also hinge on a reassessment of its priorities.

Like this story? We think you’ll also like the Future of FLYING newsletter sent every Thursday afternoon. Sign up now.

The post Report to Congress: Shortsighted, Aging NASA Faces Uncertain Future appeared first on FLYING Magazine.

]]>
NASA Dragonfly Mission to Saturn’s Largest Moon a ‘Go’ https://www.flyingmag.com/nasa-dragonfly-mission-to-saturns-largest-moon-a-go/ Fri, 19 Apr 2024 17:34:54 +0000 https://www.flyingmag.com/?p=201050 NASA’s nuclear-powered, dual-quadcopter rotorcraft is expected to travel tens of miles in an hour, much farther than any existing rover.

The post NASA Dragonfly Mission to Saturn’s Largest Moon a ‘Go’ appeared first on FLYING Magazine.

]]>
Within five years, NASA will launch a nuclear-powered drone to Saturn’s largest moon, Titan, to search for the origins of life.

The space agency this week confirmed its Dragonfly rotorcraft mission to Titan, the fourth initiative under its New Frontiers program, is a “go” for 2028. According to NASA, teams can now begin finalizing the mission’s design. After that, they will begin construction and testing of the spacecraft and science instruments it will carry.

The aim of Dragonfly is to explore “promising locations” on Titan in search of prebiotic chemical processes—those that took place before life formed and may have contributed to its inception—that are common to both Titan and ancient Earth. In other words, the mission could help NASA uncover how life in the solar system came to be.

“Dragonfly is a spectacular science mission with broad community interest, and we are excited to take the next steps on this mission,” said Nicky Fox, associate administrator of NASA’s Science Mission Directorate at the agency’s headquarters in Washington, D.C. “Exploring Titan will push the boundaries of what we can do with rotorcraft outside of Earth.”

After a revised mission budget and schedule were conditionally approved in November 2023, the release of NASA’s fiscal year 2025 budget request confirmed that Dragonfly will cost $3.35 billion and launch in July 2028. That cost is about triple what was initially proposed in 2019, and the launch date two years later.

NASA attributed the rising costs to multiple revisions of the mission in 2020 and 2022, when agency funding was curtailed. For example, it had to allocate additional funding toward a new heavy-lift launch vehicle—intended to shorten the transit time between Earth and Titan—due to the delayed launch. The COVID-19 pandemic and supply chain snarls were also cited as factors.

Dragonfly is a dual-quadcopter with eight rotors that flies like a drone, albeit one about the size of a car. It is expected to arrive on Titan in 2034, where, over the course of a two-year expedition, it will investigate whether the moon could be habitable.

As one of the solar system’s few ocean worlds, researchers believe Titan could harbor water- or hydrocarbon-based life. Its thick, hazy atmosphere—unique among moons in the solar system—resembles that of Earth and has allowed complex organic materials to form on its surface.

Unlike Earth’s moon, which can accommodate solar-powered vehicles, Titan’s dense atmosphere necessitates a different energy source. Dragonfly will use a space nuclear power system, similar to those powering NASA’s Curiosity rover and New Horizons probe, that can be recharged at night. Most activities will be performed during the daytime, which on Titan lasts eight Earth days.

Titan is expected to have a greater range capability than any existing rover, covering tens of miles within an hour. According to NASA, it will fly hundreds of miles over two years, making one “hop” per Titan day (equivalent to 16 Earth days). However, Dragonfly will spend much of its time on the moon’s surface, making measurements and collecting samples.

The mission would represent the first time NASA has flown a vehicle for science on another planet’s moon. In 2022, the agency’s Ingenuity Mars helicopter completed several firsts and record-breaking flights on the Red Planet, earning the NASA Jet Propulsion Lab a Robert J. Collier trophy. Ingenuity earlier this week was officially retired into a stationary testbed following its final flight in January.

Like this story? We think you’ll also like the Future of FLYING newsletter sent every Thursday afternoon. Sign up now.

The post NASA Dragonfly Mission to Saturn’s Largest Moon a ‘Go’ appeared first on FLYING Magazine.

]]>
U.S. House OKs $100M To Train Ukrainian Pilots https://www.flyingmag.com/u-s-house-oks-100m-to-train-ukrainian-pilots/ https://www.flyingmag.com/u-s-house-oks-100m-to-train-ukrainian-pilots/#comments Fri, 15 Jul 2022 21:11:03 +0000 https://www.flyingmag.com/?p=148150 Sweeping $840 billion defense bill includes purchase of more than five dozen new F-35 fighters.

The post U.S. House OKs $100M To Train Ukrainian Pilots appeared first on FLYING Magazine.

]]>
The U.S. House of Representatives has approved $100 million for training Ukrainian pilots to fly U.S. fighter jets, as Russia’s invasion of Ukraine approaches its fifth month. The move was part of a broader $840 billion defense spending package setting the Pentagon’s budget priorities for the coming year.

The 2023 National Defense Authorization Act (NDAA) was affirmed Thursday by House members in a 329-101 vote. 

“Providing for our common defense remains a crucial responsibility for all Members of Congress, regardless of party, and it requires a collective commitment to our national security and to the American people’s defense priorities,” House Armed Services Committee Chair Adam Smith (D-Washington) said following the vote.

The sweeping $840.2 billion authorization package included a $37 billion increase to DOD’s top line budget, and included hundreds of amendments. Some amendments will affect military aircraft fleets in various ways, including:

  • Limitations to how many McDonnell Douglas F-15 Eagles the U.S. Air Force will be allowed to retire
  • A prohibition on the Air National Guard retiring the Fairchild RC-26 Condor tactical Intelligence, Surveillance, and Reconnaissance (ISR) platform
  • A requirement that older Lockheed Martin F-22 Raptor fighters that the USAF had slated to retire be upgraded instead
  • Authorizes the purchase of 64 Lockheed Martin F-35 Lightning II fighters and eight Boeing F/A-18E/F Super Hornets

The bill also greenlit authorization to spend $1 billion in military aid in Ukraine, Roll Call reported. Included in the authorization of support for the war-torn country was an amendment earmarking $100 million to train Ukrainian pilots to fly U.S. fighter jets, which Ukrainian officials say are desperately needed to combat the ongoing Russian invasion.

Last month, Reps. Chrissy Houlahan (D-Pennsylvania) and Adam Kinzinger (R-Illinois), both U.S. Air Force veterans, proposed the measure in a standalone bill that called for the training of Ukrainian fighter pilots on F-15 and General Dynamics F-16 Fighting Falcon platforms.

Ukrainian defense officials announced the passage of the NDAA Friday morning, noting that it included a “bipartisan amendment to authorize $100 million for training of pilots to become familiarized with U.S. aircraft.”

The move was also well received by the Ukrainian Air Force, which praised the amendment’s inclusion. “Good news about the training of Ukrainian TopGun pilots in the USA,” Ukrainian Air Force said Friday morning on social media.

Last month, two Ukrainian fighter pilots traveled to Capitol Hill to lobby lawmakers to allow the U.S. to train Ukrainian fighter pilots to fly F-15s and F-16s. 

“If we’re talking about air-to-air superiority, basically the Russians have obvious technical advantages over our fighter jets,” a Ukrainian pilot identified by the callsign “Moonfish” told CNN at the time. “The numbers say that providing us with the U.S.-made fighter jets would make us at least matching them, or, I believe, even more advanced,” he said.

A Senate version of the defense authorization bill, which has not yet been put to vote, could reach the floor in September, Politico reported. 

The post U.S. House OKs $100M To Train Ukrainian Pilots appeared first on FLYING Magazine.

]]>
https://www.flyingmag.com/u-s-house-oks-100m-to-train-ukrainian-pilots/feed/ 1
NASA Conducts Wet Dress Rehearsal for Space Launch System https://www.flyingmag.com/nasa-conducts-wet-dress-rehearsal-for-space-launch-system/ Fri, 01 Apr 2022 19:31:27 +0000 https://www.flyingmag.com/?p=127274 The rehearsal comes after NASA announces its budget for fiscal year 2023.

The post NASA Conducts Wet Dress Rehearsal for Space Launch System appeared first on FLYING Magazine.

]]>
NASA began its wet dress rehearsal for the Space Launch System (SLS) as part of the agency’s Artemis I mission.

The wet dress rehearsal includes fueling the rocket’s tanks, a full launch countdown, delay launch, and drain fuel in the event of a rescheduled liftoff. During the rehearsal, the launch team will record data for use on the actual launch date.

NASA is providing a livestream of the rehearsal, which will last two days, ending on April 3.

The rehearsal, which includes the use of real propellant, acts as a countdown simulation. Once the countdown begins, the SLS rocket and the Orion spacecraft are powered on. From there, over 700 thousand gallons of fuel are loaded into the rocket.

After fueling is complete, the launch team then simulates a hold, where the clock is temporarily stopped in the event of an unplanned adjustment. The clock is then “recycled” to T-10 minutes, and the rest of the countdown proceeds as normal.

After the clock reaches T-9.34 seconds, the simulated launch is “scrubbed,” where the team will begin unloading fuel from the rocket.

NASA is expected to hold a post-test news conference for the rehearsal on April 4 at 11 a.m. E.T., which can be streamed live on the agency’s website.

According to NASA, SLS is the world’s most powerful rocket, and will make its trip around the moon this summer. NASA Administrator Bill Nelson addressed the nation during a State of NASA event, where he announced the agency’s fiscal year 2023 budget.

The FY 2023 budget will “allow NASA to sustain America’s global innovation leadership and keep NASA at the forefront of exploration and discovery by returning to the Moon with the Artemis program, among other efforts.”

According to NASA, the budget will also allow it to address climate change, promote economic growth, and increase diversity, equity, inclusion, and accessibility. NASA’s budget will be $1.2 billion more than the previous year, for a total of $26 billion.

Budget Highlights

  • $4.7 billion for Common Exploration Systems Development in support of lunar missions
  • $1.5 billion for astronaut Moon landers
  • $2.4 billion for Earth-observing satellites and related research
  • $1.4 billion for space technology research and development
  • $970 million for aeronautics research, which included $500 million toward reducing aviation’s climate impact
  • $150 million for the Office of STEM Engagement

On March 17, SLS made its way to launch complex 39B, where the wet dress rehearsal will be conducted. While the rehearsal is underway, NASA has not announced a specific date for launch.

The post NASA Conducts Wet Dress Rehearsal for Space Launch System appeared first on FLYING Magazine.

]]>
Air Force Secretary Sets Timeline For Manned, Unmanned Teaming https://www.flyingmag.com/air-force-secretary-sets-timeline-for-manned-unmanned-teaming/ Wed, 16 Feb 2022 20:21:53 +0000 https://www.flyingmag.com/?p=118828 The post Air Force Secretary Sets Timeline For Manned, Unmanned Teaming appeared first on FLYING Magazine.

]]>
The U.S. Air Force’s concept of manned, unmanned teaming could emerge in “roughly the same time frame” as the service’s forthcoming Next Generation Air Dominance (NGAD) fighter currently in production, the service’s top official said Tuesday.

Air Force Secretary Frank Kendall confirmed Tuesday that when it comes to exploring the use of pairing unmanned air combat platforms with piloted aircraft, the service is all in. 

“What that opens up to you is some really interesting tactical options that you don’t have when you only have manned aircraft.”

Frank Kendall, Air Force Secretary

“The technologies are coming together to allow us to do manned, unmanned teaming of a fighter, let’s say, with one or more uncrewed aircraft that accompanies it,” Kendall said during an online event at the Mitchell Institute for Aerospace Studies. “I think the mix of capabilities that you put in that formation is still very much uncertain. It’s up in the air, but there are a lot of possibilities. What that opens up to you is some really interesting tactical options that you don’t have when you only have manned aircraft.”

Bombers present “a lot of potential,” Kendall said, adding that he wasn’t as certain the roles uncrewed platforms would play alongside them, such as whether or not they follow the aircraft, or lead with more sophisticated functionality. There’s also the question about stealth, he added.

“We’re going to explore that and try to figure out what the right mix is there,” he said.

In December, Kendall confirmed that two unmanned air combat vehicle programs capable of working in conjunction with bombers such as the B-21 Raider currently under development would be included in the 2023 defense budget. “These will be acknowledged classified programs,” Kendall said at the time, adding, “but I am going to try to get them started in ’23.”

An artist’s rendering of the B-21 Raider currently under development. [Courtesy: U.S. Air Force]

Kendall said Tuesday he’s focused on getting the initial capability out to operators as soon as possible.

“I think we can get to what I call a minimum viable product and maybe it’s one person—one pilot—with a wingman in an NGAD or an F-35, or maybe it’s more than that. And it’s one set of functionalities originally, then over time that develops and matures,” he said.

“We’ll work to get a platform—an uncrewed platform—that can work with NGAD, while we’re working on NGAD, I would say roughly the same time frame we should have some things out there,” he said. 

The Air Force’s secret NGAD family of capabilities is expected to be operational by 2030

Last month, Kendall said he was looking at programs that paired uncrewed combat aircraft to manned aircraft as a cost-effective way to build mass.

“One of the reasons I’ve gone down this road is, if we only do very expensive aircraft for the Air Force, we’re not going to be able to afford an Air Force anywhere near the size that we either need or have today,” he said. 

Future combat will look significantly different compared to that of recent decades, the Air Force chief said during the event Tuesday.

“The fights that we’re worried about are different from the ones we’ve been in,” Kendall said. “We’ve been in one where we controlled time, to a large extent. Where things happen relatively slowly and in small numbers,” he said.

“The fights we’re worried about now, whether it’s an incursion…against NATO, or an attempt to, say, seize Taiwan by force, are a totally different kind of operation,” Kendall said. “You have to be prepared to deal with a lot of objects that you’re trying to understand and sort out, and a lot of things happening in a very compressed timeline.”

The post Air Force Secretary Sets Timeline For Manned, Unmanned Teaming appeared first on FLYING Magazine.

]]>
Should You Rent or Buy Your Aircraft? https://www.flyingmag.com/should-you-rent-or-buy-your-aircraft/ https://www.flyingmag.com/should-you-rent-or-buy-your-aircraft/#comments Thu, 06 Jan 2022 13:43:50 +0000 https://www.flyingmag.com/?p=110490 We crunch the numbers on one of the most asked questions in aviation.

The post Should You Rent or Buy Your Aircraft? appeared first on FLYING Magazine.

]]>
I received a lot of great feedback in response to last week’s column about the costs of owning aircraft. Thank you all for reading and for your thoughts!

One question I’ve fielded more than once is: “How did you come up with 200 hours per year as an acceptable minimum?” One reader mentioned that some mechanics and pilots set this threshold as 100 hours instead of 200.

This uncovers a universal law of aviation: If you ask 100 pilots a question, you’ll get at least 101 different opinions. This also shows the power of building a spreadsheet and plugging in real-world numbers. This column is not just about one pilot’s opinion. Let’s run last week’s example aircraft, but only change the number of hours flown per year to 100 and see what happens.

The 100-Hour Hypothesis

Our hypothesis for this experiment will be that we can change nothing but the number of hours flown per year from last week’s example and still come up with a reasonable cost of aircraft ownership.

Let’s take a look:

For me, this difference is stark. Yes, we’re spending nearly $8,000 less overall per year than if we’d flown 200 hours. However, our hourly cost has skyrocketed to $227.23! I don’t think many of us can sustain aviation activity while paying so much money to fly a 50-year-old VFR-only aircraft. 

Have we disproved our hypothesis?

This realization leads us to an important point: sometimes, it’s better to just rent.

Rent vs. Own

In some ways, renting isn’t as fun as owning. The airplane isn’t mine, and I have to schedule around countless other people who will never treat it as well as I do. However, from a finance standpoint, if you’re only flying 100 hours per year or less, renting costs you far less. 

How about a couple examples?

Leading Edge Aviation in Doylestown, Pennsylvania, rents a VFR C-172M with an O-320 for $116 an hour, including fuel. It’s two years older than the one we’ve been looking at, but flying it for 100 hours per year would cost roughly half of what we’d be paying to own a similar airplane.

And, there’s another element to consider if you were to own instead of rent at Doylestown. According to Airnav, the only fuel available on the field costs a whopping $5.89 per gallon. Plugging that cost into our calculator says it would cost us $243.91 per hour to own and operate our example aircraft out of KDYL.

What about on the West Coast?

Corsair Aviation at Van Nuys, California, has a Piper Cherokee for $140 an hour and a C-172N for $145. Fuel at KVNY ranges from $5.69 to an unbelievable $8.30 per gallon.

In my experience, renting on either coast tends to cost more than in the Midwest. This means you may be able to find even cheaper aircraft rental throughout the country. At those rates, flying just 100 hours per year in your own aircraft is a very tough sell.

Don’t forget that renters get to skip many headaches of aircraft ownership. Renters don’t have to:

  • Wash the airplane
  • Hire mechanics and hound them every few days to finish up the job
  • File any ownership or tax paperwork
  • Research part numbers and order those parts themselves
  • Feel upset when the airplane gets a hangar rash—unless you have to pay the owner’s deductible

If we were being truly honest with ourselves, our calculator would include a line for the value of your time spent managing your aircraft. I left this out because it’s difficult to quantify, but it’s something to consider.

How Do They Do It?

You’re probably wondering how these businesses can afford to rent these aircraft out so cheaply. Between economies of scale and the benefits of owning the operation, they get a lot of discounts.

When you own a fleet of aircraft, you don’t pay by the shop hour for maintenance. You pay a salary to one or more A&P mechanics. They know your aircraft so well that they can get work done more quickly. They can probably even save you thousands by doing engine overhauls in-house.

When you own the FBO, you don’t pay full price for fuel. You may also own hangars. You can write off a few hundred dollars per hangar per month as a loss, but you’re not actually paying rent to store your airplanes.

As a business, you can also deduct the depreciation in your airplanes’ value from your taxes. The tax rules around depreciation and business debt are so generous that the purchase price of an airplane may be negligible for an FBO or flight school.

These companies also get a break on insurance. Although rates are much higher when an airplane is flying for hire, they can insure the entire fleet under one policy.

Here’s what the costs might look like for one of the FBOs we just looked at:

No wonder they can afford to charge so little for their aircraft. Even at those rates, they’re still making money every time you fly.

Break-Even Point

Let’s set our calculator back to our baseline assumptions and look at the effect hours have again. Using the same assumptions we had at the top of this page we see that flying an annual total of:

  • 100 hours yields an hourly rate of $227.23
  • 150 hours yields an hourly rate of $177.54
  • 200 hours yields an hourly rate of $152.70
  • 250 hours yields an hourly rate of $137.79
  • 300 hours yields an hourly rate of $127.85

Somewhere near 225 hours per year our ownership costs match the rental rate for that airplane at Van Nuys, not accounting for much more expensive fuel in California. But would I honestly fly that many hours every single year in my own airplane?

Many aviation enthusiasts will try to “remind” you that you get the purchase price of your airplane back when you sell it. At some times this has been true. In fact, prices have climbed so much lately that if you’re selling an aircraft you’ve owned for at least five years, you could potentially double your money. I don’t think these prices will last though. The sad truth is that if you buy an airplane in the near future, it will probably sell it for less.

Even if you just break even when you sell, don’t forget that inflation is corroding the value of the money you have tied up in this aircraft.

I’m not saying you absolutely should not buy an airplane if you can’t get your costs down as low as renting at the local FBO. Personally, I’d pay an extra $7.70 per hour for my own airplane. The more honest you are with the numbers you plug into your calculator, the more realistic the results will be.

You may be able to economize or optimize on some of the costs we’re assuming here. Next, we’ll look at the biggest factors affecting aircraft ownership costs. We’ll see some clear ways to get more flying per dollar.

Thanks again for reading. Please keep your feedback coming, and fly safe!

The post Should You Rent or Buy Your Aircraft? appeared first on FLYING Magazine.

]]>
https://www.flyingmag.com/should-you-rent-or-buy-your-aircraft/feed/ 8