Membership News & Notes
AOPA Finance
Four pathways for flying clubs
Financing is available to get started
Thousands of pilots have found an outlet for their passion for flight through a local flying club. Hundreds of unique clubs in the United States offer pilots of all skill levels the benefit of shared aircraft ownership and a ready-made community of like-minded aviators. But this variety in flying clubs also means that one size does not fit all when it comes to aircraft financing. That’s why AOPA has developed four pathways to aircraft financing that are specifically tailored to the needs of flying clubs. If you are responsible for financing a club aircraft, AOPA no doubt has a financing option that fits you and your organization’s composition and needs.
Option 1: Loan with no personal guaranty. If you represent an established flying club—meaning one that has been in existence for three or more years—then you qualify for a loan with no personal guaranty. Your flying club is the borrower, not you. With this particular loan solution, you can borrow 50 percent of the aircraft value. (In finance terms that’s expressed as 50 percent LTV, meaning “loan to value.”) The term of the loan is up to 12 years at an interest rate ranging from 5 percent to 7 percent.
Option 2: Loan with leaseback to a flying club. If your flying club is brand-new, you might be willing to take the personal responsibility of an aircraft loan with the understanding that the aircraft is put on leaseback to the flying club. With this solution, a personal guaranty is required for a 70-percent LTV loan; the term of the loan is up to 15 years at an interest rate of 5 percent to 5.25 percent.
Option 3: Credit-enhanced flying club loan with personal guaranty. With this financing solution, the flying club is the borrower, but the loan is backed by an individual’s personal guaranty. This solution provides for an 85-percent LTV loan with up to a 15-year term at a 5.25 percent to 7 percent interest rate. Each flying club’s age and stability—from a startup to an established club—is considered individually when assessing this financing solution.
Option 4: Flexible aviation loan with leaseback. With AOPA’s flexible aviation loan, the individual is the borrower and provides a personal guaranty. This loan is uncollateralized and is based solely on credit and debt to income. The term is up to seven years with interest rates from 7.74 percent to 10.49 percent. The borrower names the flying club as lessee of a leaseback, and in this solution, both startup and established flying clubs are OK and there are no aircraft restrictions. These loans are limited only by the individual’s credit and can be for up to $100,000.
These four options provide flying clubs and their members the funds necessary to purchase an aircraft. Financing is available today, and the application process is streamlined to make it easy for you to secure a loan. These loan solutions are among many resources AOPA has launched to support flying clubs. Find more information online.
To get started on an aircraft loan for your flying club, call 1-800-62-PLANE (75263) and speak with an aviation loan specialist. The specialist will take the Time to understand your needs and build the right finance package for your flying club. Or, you can start exploring a loan online.
Survey:
581: Number of flying clubs in the AOPA Flying Club Network.
Products and services
‘I love being up there’
Lifelong interest in airplanes leads to ownership
Adolfo Ortiz grew up building model airplanes and sharing flying stories with his father and uncle, but he didn’t get an opportunity to fly until he was in his thirties.
“To me, flying isn’t about the destination, although there are many awesome places—it’s just about flying. Even the short flights are great,” he said. “I love being up there.”
Ortiz recently bought his first aircraft, a 1959 Piper Comanche. “The first thing to get my attention was the price. It was about the same as a mid-size car.”
The second thing? The airplane’s condition. “The previous owner really took care of it. He had recently replaced the interior and took care of the exterior. He had also put in a new engine—total time at purchase was just 180 hours.”
When it came time to insure the Comanche, Ortiz selected AOPA Insurance. “I knew I would be treated well. The purchasing process was extremely easy and straightforward,” said Ortiz, an AOPA member since 1999. “I hope I never have the need to use the insurance, but if the time comes that I do, I will get the best service from the AOPA insurance team.”
Whether this is your first airplane like Adolfo Ortiz or simply the next addition to your fleet, AOPA Insurance has the right policy for you. For more information or to request a free quote, talk to AOPA Insurance Services. For more information or to apply for a policy, visit aopainsurance.org. Don’t forget: You may qualify for a 5-percent discount just for being an AOPA member.
AOPA Partners
About AOPA's partnership program
AOPA’s Corporate Partners come from industries of all shapes and sizes. In addition to their financial contributions that help support AOPA’s missions and initiatives, they offer unique member benefits ranging from additional content to discounts on products and services. Their commitment also allows AOPA to provide better services and additional benefits, and to advance issues that are vital to the growth of general aviation. We hope you consider utilizing our partners and their products or services so they can continue to support AOPA. We thank them for their commitment and are grateful for their kind support.
Strategic Partners: Enterprise, National, and Alamo; Aircraft Spruce; Aero-Space Reports; Bank of America; Breitling
Premier Partners: Pilot Workshops, Jeppesen
Supporting Partners: Sporty’s Pilot Shop, Cirrus Aircraft
To learn more about AOPA’s Corporate Partnership program, email [email protected].
Answers for pilots
Flying across the pond
Ever dream about flying your aircraft to Europe? The airlines fly the pond all the time, but what about general aviation aircraft? Are there enough places to land and refuel along the way? How are communications over the ocean handled when you are out of range from land? What about weather uncertainties? What equipment is needed? Get an overview of the challenges involved and access to flight planning resources for digging deeper in January’s online Answers for Pilots. Questions? Call the aviation technical specialists in AOPA’s Pilot Information Center, Monday through Friday, 8:30 a.m. to 6 p.m. Eastern Time, 800-USA-AOPA (872-2672). Or email [email protected].
Photo: Mark Wagner
AOPA Foundation
Need a New Year’s resolution? Don’t wait another day. Join AOPA member philanthropists who have funded AOPA Foundation initiatives in the past 12 months.
Air Safety Institute
Find your margin of safety
Prevent an accidental power-on stall
We practice recognizing and recovering from them over and over again during flight training. Yet, year after year, unintended stalls—including power-on stalls—are among the leading causes of fatal aviation accidents.
Perhaps the catch is that during training, for safety reasons, stalls are practiced in a controlled, coordinated scenario at a high altitude. Students are taught to set up the stall and then recover from it with a minimum loss of altitude. This means that in training and during a checkride or flight review, you know precisely what’s coming because you’ve just deliberately set up the scene to demonstrate that you know how to stall the aircraft and then calmly recover from it.
But when it’s not deliberate, such as in an unexpected power-on stall during takeoff or a go-around, you’ll experience something that is sudden, sharp, and frightening. In that situation, you’ll be at a low altitude when even a brief loss of aircraft control may be unrecoverable. Margins of Safety: Avoiding Power-On Stalls is intended to help you recognize how vastly different training and real-world scenarios can be.
Watch the video to see how a power-on stall can occur during a takeoff or go-around, and learn about techniques you can use to prevent one from happening.
New ASI seminar
‘Emergency! Getting it Right when Things Go Wrong’
We train for them, but real-world emergencies are rare enough that it’s easy to get complacent. They don’t always happen to “other pilots,” though, and preparation can make a big difference when things don’t go as planned:
What if you lose 500 rpm during takeoff, but the engine is running smoothly?
What if the ammeter drops to zero during a flight in IMC?
What if your left aileron develops a strong vibration in flight?
Emergency! Getting It Right when Things Go Wrong provides expert tips on handling those “up here, but wishing you were down there” scenarios. The seminar focuses on how to keep abnormal situations from becoming full-blown emergencies, offers advice on keeping critical problems under control, and shares best practices for off-airport landings.
Visit the website for dates and locations near you. Icons identify if it’s a fly-in or one of ASI’s unique aviation locations.
‘Winter escape’ quiz
Your scenario: It’s the middle of winter, and a trip from Knoxville, Tennessee, down to the sunny Bahamas sounds pretty appealing. All you have to do is get there! Some nasty winter weather moved through the Knoxville area during the night, but conditions have improved and you’re ready to depart. Take the quiz and test your knowledge of instrument flight rules and winter weather flying.
Member Products
Pilot Protection Services
Read your policy
Ferry permit may mean flying without insurance
By Jared Allen
Even though the FAA may issue a special flight permit (SFP or ferry permit) for an aircraft that does not meet applicable airworthiness requirements but is capable of safe flight, aircraft owners and pilots should be aware that some aircraft insurance policies do not provide any coverage when the insured aircraft is operated pursuant to a special flight permit.
Although coverage provided by an insurance policy depends on the terms of the specific policy at issue, the need to closely examine your policy is demonstrated by a common scenario involving an aircraft overdue for its annual inspection, which the owner or pilot desires to reposition to another airport where the necessary maintenance can be performed.
As far as the FAA is concerned, the owner/pilot may apply for and obtain an SFP that will authorize the flight to take place in accordance with the SFP’s operating limitations. Under FAR 21.197, a special flight permit may be issued to an aircraft that may not currently meet applicable airworthiness requirements, such as being out of annual, but is still capable of safe flight, as determined by a certificated mechanic that places an entry in the aircraft’s records. Furthermore, the FAR recognizes several purposes for which an SFP may be issued, including “flying the aircraft to a base where repairs, alterations, or maintenance are to be performed, or to a point of storage.”
Despite the fact that the FAA has issued an SFP, some aircraft insurance policies will not cover any loss that may occur during the ferry flight. For example, a policy may state that “there is no coverage if the aircraft is operated under conditions requiring an SFP or any other type of waiver, even if the SFP or waiver has been granted by the FAA.” Some policies may also contain additional provisions excluding coverage when the aircraft is operated by an individual or organization for the purpose of performing maintenance.
So read your policy before flying on an SFP. If you have any doubt, call your insurance broker or carrier. Understanding whether your aircraft insurance policy provides coverage for an intended operation is important, as courts often uphold an insurance carrier’s denial of a claim when the aviation insurance policy clearly did not provide coverage for the flight.
Jared Allen is an in-house attorney for AOPA’s Legal Services Plan and an instrument-rated private pilot.
