Primarily for general aviation discussion, but other aviation topics are also welcome.
#1833922
I just saw this advert on AFORS:

https://afors.com/aircraftView/48412

I am probably being incredibly stupid, but can someone explain to me the benefit of a non-equity share?

My assumption is that if something goes wrong, you don't end up paying for it and that the owners do, but for a £25k buy-in, isn't this essentially the equivalent of renting a property - in that you're basically funding someone else's aircraft ownership? Isn't this a bit like owning a leasehold?

Have I missed something obvious here? I sort of understand it if it's a throwaway sum of money, or an older aircraft where things might go wrong, but surely it doesn't make sense for a new aircraft?
#1833932
Very true

As a non-equity member you have very little responsibility for the aircraft, as you say. As long as you behave well and don't break the toy, then it is a good way of moving away from club rental and gives you more options than the club fleets

As the owner, it keeps the aircraft in use and the non-equity fee should probably be set at a level to account for the additional use.

The problem comes, as happened with us, where a non-equity member damaged the prop but refused to acknowledge the fact. We took the view that accidents do happen and divided the replacement cost by 5, but even then he refused to pay even a fifth share of the cost, and walked away leaving us to pick up the cost.

Since then we've steered away from non-equity - we've had a lot of enquiries over the years - as we'd prefer to 'lock in' potential members. There are ways around it, but since we took that decision we've been hassle-free.
User avatar
By Nero
FLYER Club Member  FLYER Club Member
#1833938
Plane model aside, that is a particularly high buy-in price for a non-equity, from what I've seen trawling AFORS for the last couple years

It does give you a chance to 'suck it and see' without too much commitment. And I assume the owners get more usage out of their plane.

I'm still considering both types in my search

~ Scott
#1833953
It's not really a share if it's non-equity, is it? What you've really got there is a regular rental arrangement where the rent payment structure is a fixed monthly rate plus a wet hourly rate. And a required, presumably refundable, deposit. It might be worth checking what the minimum term is.

I've usually seen this referred to as a "non-equity group" rather than a "share", but I assume the intent is the same.

Given the aircraft the deposit doesn't seem unreasonable to me, though for that amount I'd want some additional assurance such as an escrow arrangement or for the deposit to be secured on the aircraft.

I'm a happy "non-equity" flyer using a similar arrangement. I like not having to worry about aircraft maintenance, and not having any long term commitment. I just pay to fly. Except my deposit is much smaller, but then again the aircraft is much older. The owner is taking more of a risk on me and I have no intention of dishonouring this; if I damage the aircraft I intend to pay what the insurance doesn't cover. I wouldn't have objected to a larger deposit in principle, though I might have wanted some assurances such as what I suggest above.
#1833956
flyingearly wrote:I am probably being incredibly stupid, but can someone explain to me the benefit of a non-equity share?


As I see it the main benefit in this particular case is that the advertiser retains full ownership of a very nice aircraft but has three mugs defraying his costs.

Rob P

Other, more sensible, non-equity groups are available
JAFO, Charles Hunt, flybymike and 1 others liked this
#1833962
There is no such thing as a non equity share. You either own a share of a group aircraft or you are renting from someone.

There has been a proliferation of them in recent years but it’s just marketing spin to make people feel good about paying out money to be honest.
JAFO, G-BLEW, flybymike and 1 others liked this
#1833973
If the aircraft is still in build, does the owner need the cash to complete? And will this mean anyone buying a non equity share won't be getting his cash back in a hurry? Blooming expensive way to fly when a PA28 can be had for £150 an hour, no £25k stump up.
#1833992
I thought a benefit of non-equity for the aircraft owner is they can change the equipment spec whenever they like without needing a % majority of supporters for the change.

Some equity share groups can have problems if some want all the latest toys and others want simple basic old school kit and some are sat on the fence undecided, and it may depend on disposable income at that time.
#1833996
It's a Permit aircraft. You cannot have non-equity shares in a Permit aircraft, as MattL infers. Anyone taking up the advertiser's offer on the adveriser's basis is opening up a whole lot of legal, financial and CAA cans of worms.

Correct me if I'm wrong; but just don't go there.

Rob