The Economics of DiamondShare
As many of you already know, I recently started flying a new Diamond DA40 XLS as one of the inaugural “members” to sign up with DiamondShare, a new concept in aircraft ownership that is seeking to dramatically alter the economic equation for buyers.
I first heard about DiamondShare last summer at the Oshkosh Airshow. My dad and I had been kicking the tires of some of the airplanes we liked, including the new diesel 182 at the Cessna exhibit, the sleek Icon Aircraft A5 sport amphibian, and one of my dad’s favorite airplanes, the Maule M-9-235 taildragger. Next, I suggested we head over to the Diamond Aircraft exhibit to have a look at the DA40, one of my favorites.
Diamond salesman John Armstrong greeted us and suggested we climb aboard a new DA40 to try it on for size. He joked that we looked as though we belonged in the airplane and suggested we buy it. That gave us a good laugh; my dad and I have been talking about buying an airplane together for 25 years. We never progressed much further than circling in pen the airplanes we liked in Trade-A-Plane and arranging some demo flights (including flying with the Maules at their family farm in Moultrie, Georgia, several years back).
Realizing we probably weren’t serious buyers, John mentioned a shared-use program he was creating that he said might work for me. I gave him my card and told him to give me a call after the show to talk more about it. A few weeks later, John outlined the basic details of the DiamondShare concept. It sounded pretty good to me. I told him about an acquaintance of mine, Gerry Kaplan, who was also interested in getting into a DA40. Gerry and I had met a few years ago through AOPA’s Aircraft Partnership Program website. We’d talked about going in together on a used DA40 if we could find a couple more partners to join us, but nothing ever came of it.
I mentioned DiamondShare to Gerry and he seemed interested. I gave him John’s phone number and sort of forgot about it for the next month until I got a call from Gerry with some exciting news: He was buying a new 2012 DA40 XLS. If I was still interested, I could lease a block of 100 hours through the DiamondShare program. Gerry said he knew another pilot who was interested and a third who was a possibility.
Each DiamondShare agreement will vary depending on the owner’s particular wants and needs, but here’s how it ended up working in my case: After handing over a $2,500 refundable deposit, I now pay Gerry $995 per month plus tax to lease a block of 100 hours in his airplane for one year running from Jan. 1, 2013, to Dec. 31, 2013. That monthly fee covers just about everything – hangar, maintenance, database updates, XM weather subscription, insurance and more – with the only extras I pay for being the fuel I use and any landing or parking fees I incur.
That works out to around $120 an hour dry, plus about $50 per hour for fuel at current prices and the DA40’s economical fuel burn of under 9 gph. Now, I know DA40s in certain parts of the country can be rented for less money, but in New Jersey where I fly $170 an hour is a pretty good deal. For comparison, a nearby flight school rents a 2005 DA40 for $189 an hour wet.
Still, DiamondShare can’t quite compare with the economics of the flying club I belonged to, which offers a trio of Skyhawks for prices ranging from $85 to $110 an hour wet and calculated by tach time and not the Hobbs meter. The dues for the club are only $70 a month (plus a one-time $1,750 refundable deposit), making club flying the clear choice if dollars and cents are the only considerations.
But DiamondShare offers some compelling advantages over the club. First, obviously, is the difference between flying a brand new airplane versus ones that are several years old – or even decades old in the case of the club’s 1979 Model N Skyhawk. The Diamond I fly is also hangared, which can’t be said for the club airplanes and most rentals. Full named insurance through Avemco is also included in the deal, while the flying club requires members to obtain individual non-owner policies. And although scheduling was never too much of a hassle in the club, it’s certainly a lot easier negotiating time slots among two or three other pilots versus 70 in the club I belonged to.
The Diamond, despite sharing the same Lycoming IO-360 engine as a newer Skyhawk, also cruises about 25 knots faster than a comparable 172. Then there’s all that great Garmin technology – G1000 with synthetic vision, XM weather, traffic alerting, charts and maps, Garmin SafeTaxi, WAAS IFR GPS, the GFC 700 digital autopilot and more – that I really enjoy flying with again.
Will DiamondShare work for every pilot? No, it won’t. But it’s an attractive choice for the right type of pilot. For airplane buyers who sign up with DiamondShare, the first two members’ monthly payments roughly cover the monthly finance note, making the economic equation of ownership much more attractive. For DiamondShare members, we gain access to a brand new airplane for a fixed monthly cost that makes budgeting simple and brings with it many of the advantages of full ownership and none of the drawbacks. As far as I’m concerned, that’s a win-win combination.