If you’ve been around aviation for any length of time, you’ve likely heard about “type clubs”. At first blush, the concept seems pretty obvious…people with an interest in a particular “type” form a club and enjoy the mutual and like-minded benefits therein. A quick scrape of the surface will, however, reveal that “type” covers a very broad and diverse meaning, in some cases, not including a singular type, at all!
Let’s first look at the differences between flying clubs and type clubs.
A flying club comprises a non-profit organization of like-minded people (members) within a democratic organizational structure that extends social and educational opportunities to its members. Oh…and members of flying clubs have shared responsibility and access to actual aircraft, which may or may not, be of the same “type”.
On the other hand, a type club comprises an organization of like-minded people (members) in a structure that extends informational and educational opportunities to its members. Members of type clubs have common interests in, but no collective ownership of, aircraft of the same type.
Note that I didn’t write “non-profit organization” for the case of type clubs, nor did I state “within a democratic organizational structure”. We know that correctly functioning flying clubs should be non-profit corporations, and as such they may receive significant operational and tax benefits compared with commercial enterprises. Type clubs on the other hand, do not (generally) own aircraft and so do not necessarily need to operate from airports. Moreover, as we shall see, some type clubs are for-profit companies, with owners.
Based on the above, it is easy to venture that the only difference between flying clubs and type clubs is that the former operates aircraft of any make/model, whereas the latter has a deep interest in very particular machines. This gets us closer to the mark but perhaps we should dig a big deeper to reveal more differences—and hence some mutual opportunities—for these clubs to work together.
To date, we (Steve and Drew, the AOPA Flying Clubs Team), have between us accrued more than 11-years of experience in establishing, operating, and maintaining flying clubs. We have helped start more than 230 new flying clubs nationwide and have assembled an impressive library of reference material to help AOPA members quickly understand the fundamentals of starting flying clubs, and for existing clubs to keep up with the times—by which we mean staying in “good standing” with various bodies and agencies. All of our work is funded by the AOPA Foundation and its donors—to whom we are extremely grateful—and our output is available to all AOPA members for free…an impressive member benefit, even if we say so, ourselves!
A search for similar resources for the establishment and running of type clubs will not meet with much success, so I’ll offer here some thoughts and ideas on how to do that, but first, let’s look at some the features, resources, expertise and support that type clubs provide:
Cirrus Aircraft is an example of a company that provides training (initial and recurrent) as part of its business model (lots of history there…for another time). In addition to service centers, Cirrus has developed the Cirrus Standardized Instructor Pilots (CSIP) network, and training centers around the world. The Cirrus Owners Association (COPA) then provides an independent owners club with forums, newsletters, magazines, safety information and so on…but also a collective voice to interface with, and influence, the factory.
On the topic of manufacturers (rather than type clubs per se), remember that as well as being sales portals, company websites often contain tabs and links to useful and important resources like technical and training manuals, ADs, service bulletins, etc. In fact, in the LSA world, manufacturers must make available all sorts of documentation, and it makes good sense to have it for download from their website. A good example is the Van’s Aircraft RV-12iS website, where manuals, maintenance and service information is readily available. Engine manufacturers also make technical information available, for example Rotax. If you are interested in light sport aircraft, you can find huge amount of useful material, beyond the sale brochures, on manufacturers’ websites. This is a good way to really get to know a “type” in detail. Don’t forget to search for a specific type club…and if one doesn’t exist, then think about starting one.
Which leads us nicely in the final section of this article!
Now, I know a great deal about starting and running flying clubs…but not so much with type clubs. There again, I’ll contend that there are more similarities than differences.
One major difference involves type clubs set-up as businesses, which is just not possible for flying clubs under FAA rules. I have absolutely no problem with someone providing type-club services to a specific community and turning a profit when doing so. Whether a profit can actually be made is up “the market”, which will include the perceived value of the service offered versus the price of the subscription. It seems to me that this will be a tough environment given the “services” nature of the company, but best of luck to anyone who tries. In this case, I suggest that the entity establishes as an LLC within their state of operations. Next, obtain a tax number (EIN) from the IRS, set-up a bank account and off you go…well, remembering to file an annual report to the state, as well as filing federal and state tax returns. For LLC-based businesses with significant revenue, I suggest electing to file taxes as a corporation, rather than LLC pass-through taxation, which can royally mess up individual tax returns. LLCs can apply to be taxed as a corporation using IRS Form 8832. More information on LLCs and taxation options, here.
Pondering this for a bit, I can’t see any reason why a non-business-based type club wouldn’t set-up as a non-profit organization within the state of operations. As it is not a profit-making entity, all proceedings go back into the club for the benefit of its members, rather than into someone’s pocket. In this case, the organization looks exactly the same as a non-profit flying club—a non-profit corporation, with an elected board and officers, just without aircraft. Given the social/hobby nature of such clubs, I suggest that they file for tax exemption under IRS 501(c)(7). Some may argue that such a type club could apply for IRS 501(c)(3) tax exemption as an educational charity, but I can’t twist my head far enough around to agree with that. Best bet would be to consult with a CPA or tax attorney.
Two final notes.
Firstly, don’t forget that pilot associations are, to all intents and purposes, type clubs for pilots. Organizations such as AOPA, EAA, NAFI, SAFE and others work tirelessly to protect our freedom to fly, and provide a vast array of help, resources, how-to videos, safety information and more…albeit in slightly different ways, and to somewhat different audiences.
Secondly, I have just returned from a truly fantastic three days at the Midwest LSA Expo, held at Mount Vernon Airport (KMVN), Illinois. The Expo attracted light sport and experimental aircraft manufacturers and lots of prospective buyers. The sales reps were flat-out busy on all days, providing demo flights and detailed technical information on their types. There were also some topical and relevant seminars: I presented “LSA and Experimental Aircraft in Flying Clubs”, which addressed the increasing interest in operating alternatives to the “traditional” club fleet. Dan Johnson presented two sessions on MOSAIC, to packed audiences. MOSAIC is set to revolutionize the notion of LSA and Sport Pilot in many, many ways. The MOSAIC Notice of Proposed Rule Making is here, but take a look at the excellent study guide on the rule…and remember, the comment period ends on October 23rd 2023, so exercise your civic responsibility and send in your comments on this vitally important topic for the future of recreational general aviation. Look out for the event next year, which will its 16th year of operation. Considering all the changes in the works, this will be the go-to Expo to understand how manufactures respond to the challenges and opportunities that MOSAIC promises…I for one, will be there!
So, there you have it. Being a member of a type club will greatly enhance your knowledge of your aircraft, but it will also open up really useful networking opportunities with other owners. It makes perfect sense that flying club officers should also join type clubs applicable to their club’s aircraft… or if a type club doesn’t yet exist, think about establishing one. Other clubs and sole owners will thank you for doing it!
As promised earlier, here are links to other information and lists of currently known type clubs:
For information on a newly forming type club for Diamond Aircraft (The Diamond Pilots Association), see this month’s Club Spotlight.
As always, fly lots, and fly safely!