How to structure a successful airplane partnership (shared ownership)

discussion here:
https://groups.google.com/a/google.com/forum/?fromgroups#!searchin/pilots/partnership

From a friend:

I'm in a 3-way partnership on a 172 and have had no complaints. Be
sure to iron out all of the details up front (who pays what? when?
what happens when they don't pay? how are exceptional situations
handled? who is responsible for what? how does the plane get booked?
how can people exit the partnership?). In my case we have a 10ish page
notarized contract. CYA. Hopefully, you won't ever need to use 99% of
that document, but you want to have it in place in case bad things
happen. Thankfully, my two partners are extremely reliable, and we
miraculously have non-overlapping schedules due to our different jobs
so availability has literally never been an issue over the last 3
years.

We each fly 40-50 hours a year (when I initially looked into the
partnership the break-even point was around 30/hours a year compared
to a rental for our plane and our market). Our insurance allows 4
pilots before the price goes up so we also sell blocks of time
($60/hour for a 50 hour block to be used in 12 months) to people that
we know and trust (one at a time). The more the airplane flies, the
happier it is. We also directly subsidize fixed costs with that
marginal income stream, so it makes it cheaper for us.

In our case the rough details are as follows:
- everybody paid 1/3 of the airplane.
- everybody initially paid $3000 into a shared account (2 out of 3
signatures required).
- everybody splits fixed costs equally (including annual), regardless
of number of hours personally flown.
- we follow a standard 20-, 50- and 100- maintenance cycle, and
annually evaluate the market cost of this. This is charged to users as
an hourly rate (currently $40/hour).
- we use a simple shared Google calendar for booking, first come first serve.
- you break it, you fix it (ie: prop strike, bang a wingtip, etc)
- leave the plane full after use, and cleaner than when you found it.
- costs are paid from our operating account, and billed to us
quarterly. We simply transfer money directly into our operating
account to pay.

Overall I've had a positive experience, and would gladly enter into a
new partnership. On that topic, our partnership is also looking to
upgrade. We've agreed on a new budget, but agreeing on an airplane is
proving to be harder ;)


and

I'm not currently in a partnership, but I was for over 10 years. An airplane partnership is very much like a marriage. It can be really painful and expensive if the people involved don't actually get along. Make sure you have a common philosophy on maintenance, upgrades, scheduling, cleanliness, finances, etc. Spell out in advance what happens if someone wants to leave the partnership, or the other exceptional situations that Chris mentioned. I think we did basically all those same things. We did not fill the plane after use, since you couldn't fill the tanks and fill the seats.

We had a pretty good "leaving the partnership" process that got used a few times successfully. All the partners try to find a replacement, and the remaining partners must approve that person buying in. In the case we can't find a replacement after 30 days, the partners agree on a fair market value. The remaining partners have 2 years to pay off the leaving partner with a fixed interest added.

Some partnerships do a rotating week schedule where when its your primary week, you can fly whenever you want. Other partners can fly during your week if they coordinate with you. We tried that for a while and found that each of the 3 of us only flew during our primary week. It worked out better to just have a shared calendar and book airplane time there. We didn't have any hard rules about taking the plane for an extended trip -- we all just tried to be reasonable about not hogging up all the holidays.

It all worked out great. The absolute key is finding the right set of partners that can work well together.