John Armstrong explains the DiamondShare program at Sun ’n Fun.
Three Diamond Aircraft dealers have devised a program that may put a brand-new, four-seat aircraft within reach of many pilots who, for now, can only dream of owning a 2013 DA40 XLT (or XLS).
DiamondShares has been quietly working for about five years to refine Diamond dealer John Armstrong’s ownership-membership concept into a turn-key package that eases the burden of buying a $420,000 machine, by sharing ownership costs but not the equity. At the Sun ’n Fun International Fly-In & Expo, in Lakeland, Fla., the dealers rolled out their sales pitch: one owner buys a brand-new Diamond from the factory (it can be delivered anywhere), and the dealers recruit up to three “members” to share the costs—and flying hours. It is not an equity partnership—one owner retains 100 percent of the equity, along with final say over maintenance and other ownership decisions; and it is not a fractional ownership program. No more than four people will share access to the aircraft, and DiamondShare is offering additional incentives valued at $20,000 (benefitting the owner) through April 25—free insurance, avionics subscriptions, tax and legal advice, and training among them.
Armstrong, of Dominion Aircraft Sales in Raleigh, N.C., collaborated with Premier Aircraft Sales in Ft. Lauderdale, Fla., and Great Lakes Diamond Aircraft Sales in Naperville, Ill., to launch the program. They have sold six DiamondShare aircraft to date, with a deal pending for an aircraft to be based in Farmingdale, N.Y., and others in the discussion stage.
“The DiamondShare program is really key for us,” said Fred Ahles of Premier Aircraft Sales. In the past, he said, a would-be customer all but made up his or her mind to buy, then a spouse or accountant intervened, or the buyer otherwise came to the conclusion that “I can’t justify it…we were losing a sale every month.”
By matching buyers with “members” who are, in essence, renting a portion of the airplane, the cost of financing can be covered, and possibly turned into a net positive cash flow if the buyer qualifies for maximum tax incentives made more accessible because the aircraft becomes a business. Members (lessors) get up to 100 hours flying time a year, coordinated through a Web-based scheduling program, for a flat fee of $999 per month that includes everything but avgas, and a share of the hangar cost if applicable. DiamondShare dealers recruit members—up to three, depending on the owner’s preference—and members commit to one year at a time.
Some additional math: Based on an avgas price of $6 per gallon, and a fuel burn of 10 gallons per hour, the fuel bill for a DiamondShare member would average another $500 per month. Even with an expensive hangar, that gives members access to a brand-new aircraft with few scheduling constraints for less than $2,000 per month.
“The difference between members and equity is night and day,” Armstrong said, noting that equity partnerships require the partners to agree on maintenance, upgrades, and a host of other decisions. For owners, having one, two, or three members sharing the cost makes the $420,000 purchase more feasible. The program includes a shared insurance policy, which Armstrong said was a critical piece and one of the most time-consuming aspects of setting up the program.
Armstrong said research reveals that the typical general aviation owner flies about 100 hours a year, and spends about $1,000 in monthly fixed costs on an aircraft that is decades old. It is no accident that those are the basic numbers involved in the cost-sharing formula.
“We’re trying to focus on broadening the market for better mobility,” Armstrong said.
Watch for a detailed story on DiamondShare, and how it compares to fractional ownership options, in an upcoming issue of AOPA Pilot.