The majority of flying clubs operate pretty similarly, albeit with a few tweaks based on club type, location, type of aircraft, and so on.
When we, your loyal Flying Clubs Team, work with founders to get new clubs started (at the time of writing, we are up to 212 new clubs since the start of the program) we steer them towards the best operating structure, advise on (realistic) aircraft options, help with bylaws, rules and financial structures, work with them to attract new members, and so on. Start-up times range from three to 24-months, depending on the time and energy of the founders, but also on local factors such as pilot density (numbers, that is, not brain power), ability to raise a down payment for a loan or locating an aircraft to lease, encouragement (or otherwise) from airport managers, and myriad other considerations. Highly driven and engaged founders quite often come-up with very creative ways to knock down such hurdles and get the club started.
Similarly, existing clubs—especially those that have been around “for a while”—might suddenly realize that their club is on an age-related downhill spiral, or that the previously dynamic and engaged membership has drifted into more of a rental operation, where members rarely intermingle and socialize. The club’s board will contact us for suggestions, of which we have many, or may have ideas of their own to help reenergize their club. We’ve worked with a number of such clubs recently, where new members are excited about the possibilities and opportunities of a flying club and are pushing the old guard to make changes. For all the right reasons, ideas may germinate, proliferate, and quickly gain in momentum, to the point of looking unstoppable.
That is, until we, based on years of experience, say something along the lines of “be careful what you wish for”!
Some—nay, many—of the innovative ideas presented are workable, but may considerably throttle the funnel of available prospective members (the serviceable addressable market in marketing-speak). For illustration, an extreme example of this would be “let’s sell the clubs C172 and purchase an Extra 300”. Interesting idea, but probably not a formula for growth nor lower operating costs.
Other ideas can sound wonderful in the abstract, but the numbers may just not align. Yet other ideas could position a club outside of the rules decreed by the FAA and IRS for correctly operating, socially based, volunteer run, flying clubs.
We don’t like to burst bubbles, but we do feel a strong sense of responsibility to get clubs started—or reinvigorated—such that they exist for 30 (more) years, that they successfully navigate the twists and turns of any membership organization, and stay in good favor with the airport’s wider ecosystem. So, here are a few real-life examples of where we have stated “be careful what you wish for”. As we will be using this phrase a lot in this article, we’ll abbreviate it to “BCWYWF”. As you’ll read, some BCWYWF situations are predictable ahead of time, at least with the foresight of experience. Others are more subtle and occur as unintended consequences of disturbing the equilibrium of existing club operations.
1: “We intend to grow our club membership”.
The first thing we do in such a case is to ask why —and we have found that there are two main reasons for the desire to grow.
Firstly, the most clear-cut is when a moderately successful club realizes that the club plane is not flying very much, so there is slack in the schedule. In other words, collectively, the existing members are not putting in the hours. This is great for the members that do fly as the non-fliers help pay the fixed costs and so are essentially subsidizing those that do fly. Nevertheless, the point of a flying club is to provide the opportunity for more people to fly, so the club would be wise to consider adding more members. More members then contribute to paying the fixed costs, so, at least in theory, everyone’s monthly dues decease. The new members will very likely fly more, and as there are now more members, the plane flies more, keeping it healthy. The BCWYWF in this case is a feedback effect. More members=lower dues=more people having money to fly more (including the previous non-fliers) = less availably on the schedule, prompting some members to suggest that the club buys another plane…umm. This is a good thing, but worth thinking about ahead of time!
Next to consider is a successful club that has a long waiting list and the club’s planes are pretty much always booked. It makes sense for this club to acquire another airplane, but that would greatly increase membership dues, and so existing members may leave the club, which may—or may not—result in backfilling from people on the waiting list. It may well be that the club now has about the same number of members as before, but with the expenses of two planes…BCWYWF. The best way to tackle this type of growth, where the objective is to open-up more membership slots but keep costs to an acceptable level, is to first grow the membership and then grow the fleet. This is a case of growth through scaling. The ratio of members per plane, and so accessibility, remains about the same, and monthly dues will also be about the same. This is exactly what Drew’s club (Free State Flying Club) did last year. The club operates from College Park, close the Washington DC, so there is no shortage of pilots or disposable income. Now, as Drew will tell you, it wasn’t all buttercups and daisies, and the club had many heated debates on the concept of growth as well as ways to achieve it, and some members were lost and gained along the way. Nevertheless, the club now has two nice and well-beloved aircraft, and a membership freshly imbued with renewed engagement.
Another BCWYWF case involving club growth (or growth disguised as raising money) is where a club realizes it needs to upgrade its plane but doesn’t have the funds to do so. The best way to do this is to present the opportunity to the exiting members, and get the updates approved, including an assessment on each member for an equal share of the cost of the upgrades. This may result in some grumps leaving the club, but with updated equipment, the club will be a much better position to attract new members.
Nevertheless, some clubs try to fund the upgrades by accepting more members. Perhaps—unlikely—new members may join on the promise of the planes being upgraded, but more likely not, as they will wait to see the result. A wise club would not bet on these members actually ponying up. Even if new members join and pitch-in money for the upgrades, the result will be a club with more members, many of whom will be new and so excited to fly an upgraded steed, but with the same number of planes meaning accessibility will drop…BCWYWF.
On the topic of recruiting new members, BCWYWF—and be very selective. Here are some articles that look at the process and art of finding members with the right cultural fit:
WHAT CAN CLUBS DO TO ATTRACT YOUNGER PILOTS? (YOUNGER PILOTS SPEAK OUT EDITION)
2: “We want to grow our club fleet”.
Again, we will ask what has led a club to this decision. Is it that the existing planes are fully booked, so the club wants to add flight capacity, or is it perhaps the planes are not flying very much, and members complain about them and seek alternatives?
The first case makes perfect sense, as long as club members realize that more planes will not only increase schedule availability, but also overall costs…unless the club also increases membership. See #1, above for BCWYWF cautions.
The second case is definitely BCWYWF. Adding a plane to an already struggling club is not going to solve any problems, at least not for the long term. Take a good look that the May 2021 Question of the Month, “Is Our Club Still Viable” for a deep dive into this topic, and many others that question not just club viability but also some the creative solutions that can do more harm than good.
Other articles that include BCWYWF warnings for growing the fleet are:
DOES THE CHOICE OF AIRCRAFT, SAY A HIGH-PERFORMANCE STEED, INFLUENCE A CLUB’S CULTURE?
HOW DO WE INTEGRATE A NEW AIRCRAFT INTO OUR FLEET?
HOW DO WE GO ABOUT ADDING A CLUB AIRCRAFT?
3: “In order to grow our club membership, we are going to accept student pilots as members,”.
Regular readers of Club Connector and listeners to Flying Clubs Radio will be waiting for the imminent rant on this topic…but I’ll keep it simple. BCWYWF. In fact, be really careful what you wish for!
This is a classic case of doing the wrong thing for all the wrong reasons and not understanding the consequences. Flying clubs must follow rules, be fair and ethical players in the wider airport community and understand potential outcomes for not doing so. Not only that, but it will also cost all members more, and the planes will be less available.
Still want to do it? Read on…
Accepting student members may well increase membership numbers in the short term but it is important to realize that such growth is often transient. People who join clubs to learn to fly will likely not be long-term members and will also probably not contribute much to club life—apart from beating-up the club aircraft. Clubs than may get trapped into “a revolving door of student members”, which can kill camaraderie and shift the club closer to becoming a flight school. Moreover, already certificated members will definitely be subsidizing student members by virtue of higher maintenance and insurance costs.
As I wrote in the May 2022 Question of the Month, “So, You Want To Start A Flying Club To Teach Kids How To Fly, Eh?”:
[As well as increased maintenance and insurance costs], yet another consideration regarding primary training in club aircraft involves scheduling. Most primary training takes place on the weekend to align the schedules of the student and instructor, and that, of course, is just the time when other members want to use club planes. Do you really want to have a club plane permanently booked out every weekend for the next 6-months? Keeping a plane “in reserve” for the purposes of training also won’t fly, as that will absolutely cross the line of the club providing flight training.
Some clubs, mine and Drew’s included, simply do not accept student pilots as flying members. Here is our reasoning. If a club accepts a student pilot as a flying member, it is implying that the student can use the club plane to learn to fly…why else would the student join the club, and why else would the club accept such a member, if not for them to use the club aircraft for flight training? In our book, this crosses the line.
As a club local to AOPA headquarters aptly states: “Memberships may be available to pilots holding at least a private certificate. We are a flying club, not a training school. We do not accept students”.
So, really, BCWYWF and don’t go there!
A related, but quite different, situation is:
4: “A foreign national has applied to be a member of our flying club. Any potential issues with this?”.
Let’s first address the membership itself. As you know, a club should be established as a non-profit corporation in the state of operations. Yes, we know that in the past clubs were given poor advice to establish as LLCs, and as such they are likely missing out on a significant tax opportunity. We strongly advise such clubs to exercise a one-time conversion from LLC to a non-profit corporation. You might need the services of a business lawyer licensed in that state to make sure this is done properly.
Now, every state is different and has different company/business rules, but there is likely one rule that pertains to who can be “owners” of corporations, and, specifically if ownership, even part ownership, can be held by non-U.S. nationals. Interesting, but easy to research by looking at the state’s business web portal.
A much bigger issue involves the TSA. Yes, that TSA, the Transportation Security Administration. If the prospective non-U.S. member does not hold an FAA pilot certificate, then presumably they want to join the club in order to become FAA certificated. This is where you run for the hills or…BCWYWF.
Recall that there are very stringent rules for anyone seeking flight training. Even before a U.S. citizen can begin flight training for an initial FAA pilot certificate, recreational, sport pilot, private pilot, instrument rating or multiengine rating, a CFI must verify their citizenship and sign their logbook with a very specific endorsement. More information for U.S. citizens can be found, here.
For the case of foreign nationals seeking flight training, the situation is even more rigorous, and one could say, onerous. Both the “alien” and the provider of flight training must apply through the TSA’s Flight Training Program (previously called the Alien Flight Student Program). More information can be found here, but the main point is that a flying club should never, ever consider itself a provider of flight training and so should never, ever apply to the TSA to be listed as such a provider. As we preach from the tallest pulpit, a flying club is not a flight school and should not concern itself with the training of its members, as that is a matter between a member and a club-authorized CFI. (See the January 2018 Question of the Month: “As a Flying Club Member, Can I Use Club Aircraft to Receive Flight Instruction and Pay an Instructor?”).
In that case, is it alright for a club-authorized, independent CFI to apply to the TSA to be vetted and listed as a provider of flight training to foreign nationals? Well, technically yes, but now there will be another burden placed on the club and its members. Given that the foreign national club member will receive flight training in club-owned aircraft, I postulate that the TSA would expect (require) that all club members undergo annual TSA Security Training, by virtue of their close contact with the “alien”.
I actually think it is a good idea for all pilots, not just employees of flight schools, to take this training since, “As members of the general aviation community we all must help ensure the safety and security of our airports and aircraft. The TSA Security Awareness Training offers practical guidance to limit opportunities for criminals or potential terrorists seeking access to general aviation aircraft at airports, flight schools, and FBOs.
Bottom line? Do not go there. It is not worth the hassle for one or two additional members. Leave this to the flight training professionals—the flight schools.
Let’s shift gears to some other BCWYWF that arise from the motivation for forming flying clubs. We’ll look at:
5: “I want to buy a flying club” or ”I want to sell my flying club”, and
6: “I want to start a flying club to make money”
In the first case, true non-profit flying clubs, as defined by the FAA, are member owned, member run non-profit social clubs. There is no notion of an owner outside of the collective membership. All money goes into the club and nobody, not even members, get any distributions, dividends, pay-outs, etc., except for when the club dissolves, and that is a quite different kettle of fish—actually, it has nothing to do with fish at all. Anyway, if no one can own a flying club, then no one can buy or sell one either. This confusion usually emanates from the fact that some commercial organizations (flight schools, FBOs, etc.) advertise that they are flying clubs, or have the words “flying club” in their name. This is simply a marketing trick to entice people to join their “club” to get access to cheaper rental rates and educational or training opportunities…all of which are designed make money for the business owners.
The second case, that of starting a flying club to make money, is equally troublesome. “Investors” think they see an opportunity to make money from something that is meant to be a fun, social, volunteer run club of likeminded people. We’ve talked about a couple of variants of this approach recently, so to avoid repetition, lend an ear to Flying Club Radio Edition 34, “When a Flying Club Is Not a Flying Club”.
This is not so much BCWYWF, but more like caveat emptor—let the buyer beware. There are unscrupulous people who will try to lure you to part with money to join a “flying club”, while all the time lining their own pockets. True, you’ll may get access to shared aircraft, and perhaps that is all that matters…but these are not flying clubs in the sense of being member owned and operated social clubs, and you’ll likely have no say in “club” matters. Be sure to read and follow the guidelines for selecting and joining a flying club, here.
7: “We are thinking about entering into a reciprocal arrangement with another club to share equipment and locations”.
Another seemly reasonable idea. Club A operates a C172 close to a National Park, and Club B has a Bonanza close to the coast. Why not have an arrangement where members from club A can fly club B’s aircraft, and vice versa?
Well, again taking the role party-pooper, the FAA rules for flying clubs are quite clear. Only members of Club A can fly Club A’s aircraft. Similarly for Club B. This is all to do with “ownership” or, in the case of a non-equity club, “ownership-like powers”. Club A’s members share in some sort of ownership responsibility for their aircraft—but not with Club B’s airplanes, and again, vice versa.
The full grandeur of this BCWYWF can be found in the October 2020 Question of the Month: “Can A Flying Club Enter Into a Reciprocal Use Agreement With Another Club?” The indisputable and resounding answer is “no” and to do so would paint both clubs as rental operations. There are better—and legal—solutions to the general idea, including one club operating from multiple airports. One of our local clubs, Octopus Flying Club, does this very thing—they operate from both Gaithersburg, Maryland, and Hollywood, Florida. Another option is to merge the clubs into one entity…but we’ll leave that BCWYWF for a future article.
8: “Our flying club is growing rapidly, so we need to employ some staff”
Well, first of all, congratulations on the successful club!
Now, I’ll cross a few lines here and pose the question “At what point does a club grow to such a size that it effectively stops being a flying club?”. This is, of course, a heavily loaded question and depends on many factors, including the energy of the board and officers and the commitment of members, but I’d hazard a guess that bigger clubs have bigger issues, especially with member engagement.
It is also one thing for a club’s operations and successes to be built on the backs of likeminded volunteers, but it will have a very different feel if the club employs, say, a general manager. Is the GM the “boss” of the club? The GM position is someone’s job, and they will have career expectations and aspirations. Does the individual voice of a member now pale into significance compared to that of a career-driven employee? Does the tail now wag the dog? BCWYWF!
There are, of course, many jobs that need to be done in clubs of all sizes, and it is quite reasonable to, say, pay a caretaker to look after the clubhouse, to pay the going rate for a CPA to look after the accounts and books, and to pay a local mechanic for maintenance and inspections…but…all of these should be treated as expenses on the club books. People provide invoices for their services, which are approved and paid at monthly club meetings. This is hugely different to employing people!
A derivative question is whether a club should employee someone if they are also a member of the club. Would that member then receive an “inurement” (benefit) over other members, which is strictly prohibited by both the FAA and IRS, or are they simply being compensated for doing a job of work? What about conflicts of interest? BCWYWF!
There are two aviation activities that are specifically mentioned in the FAA rules for flying clubs—those of CFI and A&P. After a fair degree of squinting and interpretation, we strongly advise clubs to never directly employ instructors and mechanics. For the case of instructors, the club itself should not be involved in any transaction—it is between the members and an independent CFI. This gets straight to a question of fairness. Flying clubs should provide business opportunities to other airport tenants who are trying to eke out a living, and depriving these businesses of such opportunities is, well, just wrong.
From the October 2019 Question of the Month: “Can A Flying Club Employ People?”:
A bigger issue to consider is that a club engaging any individual would now be an employer and would likely have to provide forms such as W-2, 1099, etc., for their employees, and may also have to withhold taxes, file returns, provide benefits, etc. In other words, be careful what you wish for!
So, in summary:
Still want to do it? Well, BCWYWF!
As this is already an awfully lengthy article, I’ll shortlist a number of other BCWYWF candidates. Most of these, with antidotes, can be found in previous Question of the Month articles and Flying Clubs Radio Editions.
Don’t go there. Currency is the responsibly of each member acting as PIC. A club should never put that burden on itself, unless it is a requirement of insurance, and even then, there must be a rock-solid mechanism in place to prevent members from flying outside of the currency limits. The best way to solve this is though proficiency programs, not currency mandates. See:
https://youcanfly.aopa.org/flying-clubs/flying-club-newsletter/2020/may/17/question-of-the- month
https://youcanfly.aopa.org/flying-clubs/flying-club-newsletter/2022/march/20/question-of-the-month
In a word, carefully.
Clubs cater for their members, only, so even selling tee-shirts to non-members could be considered as a commercial enterprise. We have had clubs tell us they intend to sell raffle tickets to non-members to boost the avionics upgrade fund or some other fund-raising initiative. See the April 2021 question of the Month: “How May Flying Clubs Raise Money?” for more creative ways to get into really hot water.
Bottom line... We strongly advise clubs to be fully self-funding, from members only. If you need more money, then assess the members. If a club cannot survive without external funds, then it is time to fix the fundamental problems rather than being tempted to raise funds from outside of the club. Like everything else, flying clubs go through life cycles. What worked 30-years ago is probably not today’s reality. Perhaps the club will have to sell one of its planes to keep the club viable or increase fees and dues. Some people will of course complain, but so be it… at least you’ll have a viable and sustainable flying club going forward.
Prevention is better than cure, so all clubs should have a very formal process of vetting candidates, including interviews, all-member member meetings to quiz (grill?) all candidates. In other words, treat it as an important democratic process—which it is. For multiple candidates (lucky you) hold debates, hustings, etc. If despots still squeeze through, remove them from office…You’re Fired!
This is more than BCWYWF and is actually “are you completely mad”? The owner of the airplane should always be fully responsible for airworthiness—period. As part of the lease agreement, the club should fully expect that the owner looks after issues pertaining to airworthiness, including ADs, engine, propeller, avionics, etc. The clubs should be responsible for wear and tear, such as brakes, oil changes, tires, and so forth. Regarding the annual, the owners should be responsible for the labor costs for the inspection itself (required to maintain airworthiness), but both parties should review the discrepancy list to fairly assign responsibility. Regarding upgrades…a club should never go down this path, as putting money into someone else’s asset makes no sense, especially as the owner could end the lease at any time, according to the lease’s terms and conditions. If the owner does upgrade the plane, the club should of course expect to pay more for the lease, so offsetting to some degree the owner’s expenses.
More on this can be found here. An example lease agreement can be found here.
Summary:
Anything that gets too fancy, requires pages of explanation and results in dozens of clauses in the bylaws is probably not a good idea to start with. Setting up a flying club is pretty easy…and so too should be running one, so if you find yourself reverting to “schemes”, then likely something else is wrong and equally likely it will not be fixed by doing creative or weird things!
Going full circle: Be Careful What You Wish For!
As always, fly lots and fly safely!
