Wednesday, March 23, 2011
Fueling Progress
Subtitle: Counting the Costs
As crowds of people were following Jesus one day, he turned to them and spoke of consider the costs involved with following Him (for more on this, read Luke 14). When setting out to do any work, we consider the costs.
In our program, our desire is to ensure success so that the program endures. Costs have to be built in to the program and covered by the activity that we do. It's not an easy thing to put numbers down on paper and make projections for a pioneering project. No one has ever done a project like we are building here in Gabon.
At the start, we made very conservative estimations regarding this one question- "How many hours will our aircraft fly in one year?" With that number in mind, we could start working toward finding the HOURLY OPERATING COST of the airplane. Bottom line... if the propeller is spinning, we're funding the work.
We set out by asking our primary user, Bongolo Hospital, what they projected the need at. They responded that we would have so many people requesting our services that we'd be turning people away. That's a nice sentiment, but we need numbers, people! We thought that saying we'd be doing two weekly round trips, from the capital city to the hospital, was conservative. From there, we went to another level of conservative and said, "let's go with about 1.5 trips weekly, and plan to fly 48 weeks out of the year". With that, we set the number of annual flight hours at 250.
With that number (250 hours), we could now get an hourly rate for all the costs we pay annually, flying or no flying. Things like, insurance, airport fees, training, safety, etc.
Other things, like fuel, are simple math. Our airplane will burn an average of 16 gallons every hour and the fuel here costs (I hope you're sitting down)... it costs an average of $16 dollars a gallon! [NOTE: By comparison, 100 low-lead fuel (aka. "AvGas") runs for about $4.50 a gallon in the US.]
So, here's what we came up with for our expenses:
Fuel 256.00
Oil 2.00
Maintenance* 20.00
Engine reserve** 55.00
Prop reserve 11.00
Insurance 35.60
Airport fees 1.00
Training 4.00
Safety 4.00
TOTAL 388.60 per hour
(* Maintenance labor is free- that's what I provide. However, we still have an annual inspection that we'll have to fork up money for.)
(**After 1700 hours of operation, our engine will need to be replaced. We're planning on a nice turbo-prop conversion, so we're setting aside more than average.)
Our hope is that we can provide our service to as many people that we can, and make the costs as low as possible so that no one is excluded due to price. Along those lines, we have funds to assist those who need a helping hand as well.
Getting our hourly costs down is another way to bless those that need to use this service. It would reason that we should try the best we can to attack the area costing us the most- FUEL! With our current rate, fuel accounts for about two-thirds of our costs!
Our current source is purchasing at the international airport or through a private business here. Both pay incredible taxes and fees and end up costing around $16 a gallon. So, I set out to contact our "sister" organizations to find other options.
One sister organization has enough of a structure that they have a team in the US that can send them fuel using shipping containers. I started dialoguing with them over a year ago, kindly asking if we could make use of this system and purchase fuel from them. They quoted me their price and, after adding in some hypothetical numbers for Gabon customs/port costs, I was able to estimate a price savings of almost $10 per gallon!
Now, after plugging in this new, conservative number for fuel cost in to our hourly operating formula and recalculating brings us to about $240 an hour! That's astounding! Think of the many more people that this program will be able to assist as a result of the cost savings!
Is there a "but" in this story? Well, yes. However, it's not an insurmountable "but". We need to get an exoneration from the government for this shipment of fuel. So now, we are working to find permission from the powers that be so that, when the shipment arrives at the port here, we are not heavily taxed. Fuel almost always has a 100% tax on it. Yep, that's right- whatever we'd pay in the states for it... double it. Sure, even then we'd be saving money, however, I am praying that we receive an exoneration.
Some things to keep in mind:
> We need an exoneration for the fuel
> We would have to purchase a 20 foot container all at once- funding needed in advance
> From the time that we order to the time it ships is approximately 3 months
> Our aircraft is set to return to service around August
> There are 78 barrels in the shipment
> One barrel of fuel represents one round trip flight to Bongolo Hospital
As we do not have the exoneration at this time, it is premature to launch publicity to raise funds regarding the fuel purchase, however, it's a great time to ask for your prayers. This is a very important work and this situation has the potential for great impact in expanding the work.
If you want to get additional info on this, shoot me an email: gabonpilot@gmail.com
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