Help! I think I want to start a flight school....

[Deltawidget]

Not a fckin puppy mill.

It may sound strange to most of you on here, but flight training combines 2 of my passions. Aviation and teaching.

You all have a wealth of experience and knowledge and I need help. I think want to start a flight school. Why is this a bad idea? or, is it a good idea??

What is it about flight training in Canada that makes it such a lousy business? Other than endless TC paperwork, is it the insurance? Overhead? Aircraft maintenance? Low enrollment?? I'm sure all of these factors eat away at whatever miniscule margins there are...

But can anyone share some of their experiences?

For some of you with decades of experience, this post may have given you a chuckle, thinking "some greenhorn wants to start an FTU, lol". But if you can share the source of your cynicism, that would be quite helpful.

I really want to know as much as possible about the realities of an FTU before I let this idea linger around longer than it needs to.

Thanks any insight you can offer.

[Deltawidget]

I should have mentioned I am a PPL myself and have researched for hundreds of hours already about what is required to start or operate or own an FTU (Thousands of dollars and a LOT of trees)

I'm just trying to dig deep here on some of the more nitty gritty details. TC audits, unforseen expenses... things like that..

Thanks,
DW

[Wacko]

I don't know. I think that if you run a flight school like a business it can be profitable.

The biggest issue with flight schools is that your teachers are not there to stay. There is a huge turnover every time big red starts hiring. If you, the owner, become the CFI and have some consistency in training and procedures I think you could be very successful.

Too many flight schools pay the instructors crap so it's easy to look for something else. I am willing to bet that if you could find 2-3 dedicated teachers who are paid well and treated well, they will be more productive than 6 lower paid kids who are just looking to build hours.

It's all on the OC holders approach... again... IF you can run a school like the business it is.

[Colonel Sanders]

Oh God.

If you're going to do this, you had better

- know about running a business
- know about aviation

Most people know precious little about either. You'd better be good at both.

For the first, you should really develop a business plan. Locate someplace that has lots of demand for flight training - or do you intend to import foreign students? - and relatively low costs and VFR wx most of the time.

For the second, for a smaller school, I might recommend that it really helps if you are qualified to be both CFI and PRM. Contract out your maintenance initially to an AMO to speed up (har har) the initial 406 OC issuance, but you should eventually have your own AMO. So, it would ideally help if you were an AME, too.

Seriously consider purchasing an existing school that in your opinion is mis-managed. This would allow you to hit the ground running.

What class of instructor rating do you hold? Are you an AME? Any other qualifications, like authorized person or designated radio examiner or language proficiency evaluator?

[WetJet]

Being passionate about aviaton and teaching means you would be a good flight instructor, not a good flight school owner. Having a large pile of money that you wish to turn into a small pile of money would make a good flight school owner. Try instructing first for a while so you can at least be your own chief flight instructor, otherwise you will never make a dime if you have to pay somebody else to be your CFI. You will be able to answer most of your questions yourself by instructing for a while.
Colonel Sanders said it, you need to wear many hats, are you qualified in any way? The last line of his post is right on.

[Deltawidget]

I am unfortunately at this point a semi-ignorant PPL with very good business sense and a passion for aviation although my full time job is in a different industry.

I have no doubt in my ability to operate the FTU in terms of retaining instructors, paying good wages, and providing a good learning environment. But where my knowledge is lacking is in aspects such as whats the difference in costs between having your own AMO vs. not. Is that a deal breaker in the beginning? Also, what are some of the hassles you have to deal with when operating under the purview of TC.

How much (%) does insurance cost on something like a C150.

I guess what I am looking for is info to help develop a business plan.

How much (approx) would an existing FTU OC run? $10,000? $50,000?? $100,000??? $250,000???? .....

Are FTUs easily able to relocate?

Thanks,
DW

[Deltawidget]

"Having a large pile of money that you wish to turn into a small pile of money would make a good flight school owner"

But why is this the case? Is it because flight school owners are not able to "wear many hats" as mentioned above?? Is it because many (most?) don't have very good business sense?

Thanks,
DW

[iflyforpie]

Not a fckin puppy mill.

Unfortunately, this is what pretty much needs to be done if you are going to stay in business.

This means high annual utilization of aircraft.

After you take away direct operating costs (fuel, oil, engine reserve, maintenance reserve, aircraft lease if applicable) you are left with the money the plane has to make to pay for all of your other monthly or annual costs for the aircraft (insurance, hangarage/parking, aircraft financing, etc) and then what is left over from that can be used to pay for running the business (lease/rent, phone, internet, POS terminal, lights, heat, office supplies, wages) and then you use the rest--if there is any--for profit and hopefully a rainy day fund. Obviously the more hours you fly each aircraft per year, the more money it will bring in.

This also means large ground school classes. A ground school instructor can teach 15 or 20 just as easily as 2 or 3 to satisfy requirements. Will the instruction be better in the former case? Absolutely. Will it make enough money? Not likely.


I have seen a lot of flight schools who tried to offer better training at competitive prices and it simply does not work any more. Either you have to attract the individuals who want the absolute best training regardless of cost, or you have to get into the WalMart method of flight training.

[WetJet]

I have no doubt in my ability to operate the FTU in terms of retaining instructors, paying good wages, and providing a good learning environment.

None of those thing will make you profitable.

The margins are so small that unless you can take an official role such as CFI, DFTE, PRM, AMO, Radio Examinner, etc other than "manager and owner" you will LOSE MONEY. Your costs to deliver the same product as your competition will be higher due to payroll and economies of scale. There are many uber qualifed owners out there that you won't be able to compete against, unless you want to throw your own money in to pay the monthy bills.

If you have "very good business sense", you should be able to smell the difference between a good business and one that would be fun to own.

[Deltawidget]

I have no doubt in my ability to operate the FTU in terms of retaining instructors, paying good wages, and providing a good learning environment.

None of those thing will make you profitable.

The margins are so small that unless you can take an official role such as CFI, DFTE, PRM, AMO, Radio Examinner, etc other than "manager and owner" you will LOSE MONEY. Your costs to deliver the same product as your competition will be higher due to payroll and economies of scale. There are many uber qualifed owners out there that you won't be able to compete against, unless you want to throw your own money in to pay the monthy bills.

If you have "very good business sense", you should be able to smell the difference between a good business and one that would be fun to own.

Yeah, regrettably, it has been painfully obvious that FTU's are a lousy business, I just wanted to understand exactly why thats the case.

[WetJet]

You might want to invest in yourself first by instructing as a hobby, but not as a living. Get a feel for the industry, learn, and if you really want and can see a void somewhere, start a FTU and go fill it! It's not that hard, I did it once for somebody with planes and infrastructure, just takes time.
Best of luck!

[Lurch]

Why not just buy an existing one? I know of one that could be for sale, including the aircraft. Not sure about the requirements for moving a school but it must be easier then starting from nothing.

[Deltawidget]

I may be interested in purchasing an existing FTU, but I have much research and fact finding to do before it is something I can seriously consider. It could be a reasonable opportunity for an existing FTU owner looking to cash out, pursue something different, etc...

But I would additionally be looking for coaching/mentoring in the nitty gritty aspects of FTU operations.

does anyone know off the top of their head what other sources of info other than CARS 406.11 would be helpful in finding additional info?

Also, I'm sure there is a difference between what TC publishes and what happens in the "real world" so any help highlighting those potential differences would be helpful.

DW

[dominusanopheles]

If you are serious, make an appointment with the owner, bring in your accountant (a good one) and go over the books.

You may have no experience in starting up a flight school, but money talks at the end of the day; i.e. if I want to buy a gas station, Shell or OLCO says, 'the owner must have prior experience'....if I opened up my cheque book, what factor do you think wins at the end of the day?

[Shiny Side Up]

I have no doubt in my ability to operate the FTU in terms of retaining instructors, paying good wages, and providing a good learning environment.

None of those thing will make you profitable.

I would disagree with that sentiment somewhat. Wages when it comes to running a FTU are really peanuts when it comes to the overall scheme of things. Retaining good instructors really does make you more profitable, and paying well is part of that. Retraining people on the other hand is a larger expense, and new employees cost you money, but more importantly soak up a lot of your time - especially new instructor employees, Class 4 ones the most. Bad employees will sink you fast.

That being said, the training world will always have the problem of relatively high turnover in the aviation world mostly because no ammount of good pay and work enviornment can compete with the promise of multi time or better yet turbine time, and the brass ring of multi turbine work.

Most of the other points already presented I'd also agree with. From my experience there are other points that make it a less than ideal money-making venture. Maintenance of aircraft is an ongoing issue. While the advice to have your own AMO is the best, you'll find its tough to find good people to work on planes as it is to fly them. AMEs like pilots don't come out of school dreaming of working on little Cessnas, and you'll get a high turnover. Most maintenance shops I know of that do work on GA aircraft are dieing slow deaths as the old guys who tinker with small planes just aren't being replaced out there. My biggest problem is getting the utilization I want when I can't get the airplanes turned around quick enough. Long weekends are killers. That also ties in with having good employees who can help you with this task, its a constant balancing act keeping track of inspection times and maintenance schedules.

Keep in mind its not a get rich quick scheme, this is also where too many schools do poorly. You can make a living owning a school and a decent one at that, but don't be under theillusion you're going to walk away with a million dollar business.

[Colonel Sanders]

its tough to find good people to work on planes as it is to fly them

+1

A successful small flight school is going to need a good CFI (to run the school) and a good AME (to run the AMO which performs the maintenance).

I strongly suggest that an FTU proprietor hold at least one of those positions, while at the same time being intimately familiar with the other position, even if not formally qualified.

It is frowned upon to actually wear both hats because of burnout, but it will give you complete control over both the ops and mtce, and allow you to tolerate personnel turnover much better.

[Shiny Side Up]

It is frowned upon to actually wear both hats because of burnout, but it will give you complete control over both the ops and mtce, and allow you to tolerate personnel turnover much better.

I wouldn't say its frowned upon, but I would definitely recommend against wearing too many hats for too long. It won't make a hill of beans how successful you run your school if you start to hate it. The problem with having too many hats is turnover increases your workload a lot more because guess who oversees the training of new personell. Burnout is a serious issue because in addition to dealing with employees, customers will wear you out. To combat this I would reccomend going for one of two set ups.

1) One airplane, one instructor (you). This gives you the out. I would think that with such a set up you really have to target that niche of flight training where you also have some control over the type of cutomer you get and they're going to tolerate scheduling around the airplane's availability - face it, every fifty hours, you can schedule your time off, this can work in your favour or against you depending on how well you manage people and get someone who can reliably work on your plane.

2) Three airplanes or more with larger staff. If you want to get more utilization and shoot for training in volume you need to have a common fleet of I would say at least three aircraft that you can get hours out of. Any less and you're going to lose people on aircraft down time - since you're going to have to take less desirable customers to make the utilization up. You will need to be either the CFI or the AMO or both. You have to make a big effort to get good people, and success is going to be all about location, location, location. You might be able to grow past this point if your market opens up. The key to the three airplanes is that it generally gives you some organizational flexibility and some breathing room so that the school can run without becoming paralyzed by unforseen maintenance events. When you're trying to go for big utilization the thing that will kill you are airplanes not working. You can't ever be left with no airplanes working.

Personally I don't think there's room out there in the market to just step in with a big flight school unless you have unlimited budget to take a loss to start competing in that market. Big government funded commercial training schools all have filled that niche - though I would speculate that if one had a lot of money with the goal of burning it to specifically put someone else out of business in a market, that one might eventually come out the other side as the big fish in a pond, that's a pretty big gamble though. There are niches to fill out there training recreational flyers out there though if one is content to make a living at that.

[Walker]

I'm not the one to usually discourage people but in this case I am going to...
Unless you have an amazing idea that no one has implemented before AND you have outstanding sense for business (in which case why are you getting into the FTU business) AND you have a few hundred thousand dollars of disposable income then I would say RUN, RUN VERY FAR AWAY.

The costs are high, the risks are high, and well frankly the margins are total garbage. IMHO MOST training in this country is HIGHLY subsidized by dreamy eyed FTU owners and instructors. There is precious little money in the training gig here in Canada, and although there have been attempts to establish overseas training contracts, its had to compete on a price point with places like Arizona.

It is POSSIBLE with an extremely well run and extremely lucky FTU make a tiny bit of money but the odds are not in your favor. The last guy I met who had a little cash and wanted to open an FTU ended up loosing ~$500,000 and his house, and im pretty sure his marriage is toast, and he now also has ulcers.

[5x5]

I suggest you read Walker's post a few times over and take it to heart.

At the same time, without a lot of experience and connections DIRECTLY related to instructing and running a FTU, your best bet would be to buy in as a partner in an existing operation. Take advantage of the established experience and learn the ropes from someone already good at it. They get the influx of capital for expansion and/or withdrawing some of their equity and you get your foot in the door.

Of course, all the usual cautions about the difficulties with partnerships apply. However, from a purely economic viewpoint, I think that would be your best route.

[Deltawidget]

Thanks for all the replies people.

I feared the flight training environment really could be that difficult in Canada. Sad..