Murphy's law, which states that anything that can go wrong will go wrong, applies to flying clubs as much as it does to the rest of the world. No matter how well organized a club is, and no matter how farsighted its members, the potential for problems is always present. Each club can lessen the impact of problems by anticipating potential trouble spots and preparing in advance to handle them. Some of the following potential problem areas have already been mentioned elsewhere in this book but they deserve repeating.
More clubs disband because of financial difficulties than for any other single reason, so the financial arena is clearly an area of operation that needs to be studied closely. Clubs that are just starting out should be absolutely sure that they can cover all capitalization costs without financially overextending individual members or the club itself. Under capitalization, for example, creates an instant problem. Or, one or more members may suddenly decide to drop out with a resulting loss of income to the club, which could cause a financial crunch. Remaining members can either dig deeper into their own pockets, or recruit new members to fill the void.
Another unexpected expense can occur in the form of major equipment failure or serious damage to the club's aircraft. Repairs could be so extensive that an unprepared club would be unable to afford the cost and be forced to close. It's very important that a club properly insure itself and financially protect its aircraft against unscheduled major repairs, liability, and accidental damage. The often forgotten, and generally not insurable, situation is the loss of use from "downtime" on a major damage repair.
The most important point to consider when preparing for financial problems is that a club should do its best to keep a reserve fund. This can be built into the dues or rental structure so that a portion goes directly into the reserve fund. Another safeguard is in the careful selection of members, being sure that all prospects are both enthusiastic about flying and financially able to afford the dues and hourly direct operating costs established by the club.
All members must pay their bills on time. This allows the club to pay its bills on time and maintain a good credit rating. One way to prevent delinquent payments from becoming a problem is for clubs to require members to maintain a credit balance in their individual accounts.
Airports usually exist to serve the public. For this reason, well managed airports have specified minimum standards to be met by tenants and operators on the field. Some of these standards pertain to equipment and facilities permitted. Others deal with air and ground traffic, local taxes, and fees. The most important kinds of standards concerning flying clubs in particular, however, are those which relate to the types of operations permitted on the field.
"Operations" in this sense may be subdivided in numerous ways, including flight versus ground services; types of flight services such as training, rental, charter or air carrier; types of ground services such as hangars, storage, fuel, maintenance, car rental franchises, parking, and pay toilets. But the most important distinction for a club is the difference between commercial and non-commercial operations. The simple fact that a club may identify itself as non-profit may not be enough to satisfy some airport sponsors or owners that the club is not a commercial operator, just like a fixed base operator or FBO.
When a club selects an airport for its operations, its members must consult airport management and reach a clear understanding as to the standards and limitations that are to be placed on club operations. These airport-imposed standards and limitations should be uniformly applied to all tenants. It would be a good idea to get a letter of understanding between the club and the airport management formalizing the club's status on the field. The club, in seeking out this understanding, is identifying itself as a new neighbor with good intentions.
Nevertheless, flying clubs have never been popular with some FBOs. There are FBOs that think of clubs as competitors, particularly if a club has a flight training program or does its own maintenance. Such activities can be seen as a threat to the FBO's income. All clubs must be thoughtful about recruiting members, realizing that some may have been viewed as potential FBO customers. Trying to persuade someone to join a flying club rather than purchasing or renting from the FBO is one way for a club to get on the wrong side of an FBO and stay there.
There are at least a couple of simple solutions to handling or avoiding tense relationships with the local FBO. One good idea may be to establish an account with the FBO for fuel, oil, parts, and maintenance. Some clubs might even want to arrange flight training through the FBO. If a club wants to use an FBO's facilities for meetings or ground school, it should offer to pay for them. Another way to smooth relations is to encourage club members to rent from the FBO when a club airplane is not available. If someone wants to join the club but is not eligible, or the club is not accepting new members, then the club should direct that person to the FBO. Clubs should also take every opportunity to point out to the FBO that its individual members represent potential future aircraft owners, and that the club itself will probably be looking for new or additional equipment some time in the future.
Either can mean added sales for the FBO. If a club lets an FBO handle its maintenance, the FBO should not have to discuss each service job with any club members other than the maintenance officer and treasurer. A steady parade of individual club members through the FBO's facilities and shops, all inquiring and cajoling as to the service and aircraft status, will only make the club seem like a less than desirable customer.
Members having complaints, questions, or suggestions should contact the club president or manager who is then responsible for discussing it with the FBO. The maintenance officer should be the only liaison between the club and the FBO concerning matters of aircraft maintenance, and the treasurer should handle the club's financial obligations to the FBO.
To serve the best interests of club members, a flying club should include a provision in its rules that club aircraft cannot be used by nonmembers and that club instructors cannot teach non-members in club aircraft. It's the simplest way to avoid problems created by non-members using club aircraft. Since non-members do not bear the same regular expenses as members, they would be enjoying an unfair advantage if they were allowed to use club aircraft. Also, an outsider's use may be depriving a club member of the very airplane for which he or she is paying.
If an exception is granted to this rule, certain stipulations should be met. The non-member must be qualified and current in the type of club aircraft to be used. The non-member must be covered by the club's insurance policy or must, at his or her own expense, obtain adequate insurance to protect the club and its aircraft. Any request for use of the club aircraft by a non-member must be made by a member and approved by the club membership.
Member proficiency is one of the keys to a successful safety record which, in turn, directly affects insurance rates. Each club member is expected to maintain as high a level of proficiency as possible and to maintain a minimum level of experience or fly a minimum number of hours per month. This standard is usually set by the club's safety officer or safety committee. Any member not meeting the minimum proficiency requirements should be required to take a check ride with a club instructor, or with a check pilot designated by the club.
Regardless of how often a member flies or how much experience he or she has, all members should consider a check ride at least once a year. This will help correct bad habits, serve as a basis for updating knowledge, meet the biennial flight review requirements, help maintain proficiency, and keep member interest high.
Clubs should plan for potential problems and resolve them quickly when they occur. Procrastination will spell doom for a flying club. Good planning, financial reserves, and a bit of consideration will go a long way toward heading off unexpected problems and financial emergencies.
Updated October 2011
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