So...... you want to be a Contract Pilot?
by
Charlie Watson
With
the recent interest in this industry, I feel I should
write a brief overview of the reality of being a full-time contract pilot.
Let's start here:
If you think you can buy a type-rating on an aircraft with
no prior experience, charge a high daily rate, have all the holidays and other
important dates in your life off when you want, and generally live the good
life when and how you want..... then you are mistaken and this business is
probably not for you. Are you still with me?
There are many types of
contract pilots. Those who fly the short trips for many operators, those who
have only 1 or 2 customers and generally accept longer trips, and those who
contract for 6 months or more with one operator. Some guarantees may or
may not be given based on whether the customer pays for some or all of your
training. Usually, the training expense is 100% paid by the pilot in this
business.
The many reasons operators
use contract pilots are to fill-in while some of the full-time staff is on
vacation, training, or other events. Contract pilots are often called in when
the regular staff is off for the holidays. The holidays are generally a
busy time for us. In the past year, I've flown on both Christmas and New Year's
Day. If you can't be available during these times, you will lose clients.
Contract pilots are also used to spool up a flight department that purchases a
new aircraft type and is seeking outside expertise. You may fill-in just once
for an operator, or develop a regular working relationship that continues for
years. Every flight department operator is different. If you are working
for an operator and your primary concern is filling your hip pocket with all
that daily rate cash...then this business is again, not for you. The
primary objective of all "real" contract pilots is to help the
operator complete his mission. A contract pilot is a
professional pilot/business person dedicated to this goal.
So what kind of pilot does
well in this business? Someone with good common sense, a self-starter, an
exceptional aviator (who keeps abreast of industry developments), has respect
for fellow contract pilots and the customer, keeps confidential information
confidential, is a good business person, and one who has that all important
entrepreneurial spirit. If this doesn't sound like you... don't quit your day
job.
What kind of income can you
make? Let's look at some figures based on a G4 Contract Pilot using the
$700/day daily rate:
15 days/month = $126,000
annually. (This is a high average days/month, most don't fly this much. Other
aircraft daily rates are lower than $700)
Now...subtract:
$21,000 annually for a
full-service FSI contract.
$ 3,000 Travel, hotel,
meals while attending 2 recurrent sessions.
$ 3,000 Travel, hotel,
meals while attending 135 annual training sessions.
$ 5,000 annually for
medical/life benefits for you and your family.
$ 1,000
Legal/Accounting Expenses for your business.
$ 800
Industry Memberships, publications
$ 600
Uniforms/Clothing
$ 3,000 Office Expenses
(Phone, fax, supplies)
$
800 annually to maintain a corporate entity. (Certainly, you wouldn't
operate your contract business as a sole-proprietor in this world of
litigation...would you?)
Oh...you say you want to save
some money for retirement?
Those of you that are still
with me and want this lifestyle, treat your business like a business. You will
present your proposal to prospective customers, outlining your rates and
policy, and accept assignments with a written contract in place. If
you are the type person who accepts "whatever an operator wants to
pay" and has no written contract in place outlining the expectations
of both sides, you are not taking the business seriously and should
consider doing something else. Of course, you must be competent at marketing
your services or you'll never have a customer to talk to in the first
place.
Once you decide to "go
for it", having done all your homework and have setup your business
properly, you must conduct yourself as a professional. If you plan on
undercutting your fellow contract pilots with a lower daily rate just to get
some flying, you will soon find yourself "out of business".
Your business will only grow when you operate with integrity and respect. This
business is very small and many contract pilots network the overflow work with
each other. There are many so-called contract pilots out there, but unfortunately, many
run for the safety of the full-time job once the first FSI Recurrent comes due.
These are the individuals who are not really serious about this business
and have no problem hurting someone else's contract business and making a bad
name for themselves and this industry. I get calls from these types weekly
asking if I know of any full-time jobs. Of course, I always do... but, if
that's what you want, then you have to find your own way. I am in the
contract business.
So......
Do you still want to be a Contract Pilot?
Charlie Watson
California Jet, LLC
NOTE: Independent contractor status as defined by the IRS
is open to interpretation. I highly suggest you talk with your tax
accountant/attorney. Some rulings have thrown out the "independent
staus" relating to the IC Pilot because the employer "controls your
time" while working for him. Don't take this as legal advice. Just check
it out for yourself before you get in a jam.
In addition, those operating
as "sole proprietors" are really hanging it out. Everytime you go out
the door you put your family's financial security at risk. Of course, if
you are operating as a corporation, you can still be sued, but there is some
shield there. If you aren't operating your business as a corporation (an
easy thing to do), the employer must pay you on a 1099 or W2 (interpretation
again). Corporations are not subject to that type of payment as you are just
like any other vendor they use. You are then an employee of your own
corporation. The corporation is the vendor of the customer. Get some good
legal advice. This note only serves to get you thinking and is not intended as
legal advice directly or indirectly.
One other thing.... use a
comprehensive contract before accepting any trip. Don't use someone else's contract,
either. What applies to one may or may not apply to you. Don't go cheap here.
Get an aviation attorney to write one for you.
Run your business as a
business. If you don't...you will not be able to compete with the professional
IC Pilots who are doing so. Operators shy away from using contract pilots who
are "sorta in business". Enough said.
Fly safe.