Important Financial Update

Hello:

Before the club thinks about selling the winch we need to see why it was underutilized.  One factor appears to be that we never advertised to the membership which day would be winch launches.  There were a few surprise winch launch days but almost nothing scheduled.  The winch is a viable backup for the days that the tow plane is out of service.  What happens if the tow plane develops a problem that can not be quickly repaired?  At least with the winch we can operate.

One unique aspect of Sky Soaring is that we have a winch and tow plane.  Moving to just a tow plane operation makes us completely dependent upon the tow plane.  That will make it no tow plane, no ops.  Not a place we want to be.  Past history has shown the club that the tow plane can be out of service in an instant due to an accident or maintenance issues.

So, before thinking of selling the winch we should try a season of scheduled winch launch days.  If the winch is under utilized then we can talk about alternative plans.  Just popping a “we may sell the winch to another club” upon the membership appears rash.  You should never rely on a single source provider (in this case tow plane only). The club is not dead broke.  Thanks for reading this and I look forward to other club member opinions.

Regards,

Rich

Just an FYI, I saw a couple days last summer where a winch crew was advertised for and a crew was not assembled to my knowledge. Also to a much greater extent than aero towing the winch is more weather dependent, especially cross winds. It’s much more problematic to advertise winching on x day 4 or 5 days into the future so folks can plan and then because the weather doesn’t cooperate the day has to be canceled.

The majority of our members are dependent on the tow plane now since they don’t winch launch and haven’t shown an interest in becoming winch launch pilots.

John Lincoln

The winch is an excellent training tool that enjoys a much wider profit margin per launch than aerotow.

This is primarily because the maintenance costs are significantly lower. A periodic engine overhaul is neither legally prescribed nor does it induce such things as $400 special assessments.

I might add that several days when we had a sufficient crew I tried to instruct and supervise a small operation. Often, some members of the club attempted to shut these operations down, citing a requisite minimum experience level known only to them or an observation that the wind was something other than light and variable.

In my mind, this can only speak to an inherent fear of winch operations as a whole and a deep seated doubt about the safety of the procedures we have developed. To those people I would politely recommend that we start a dialogue about those fears, and I would encourage those people to come train with us further to gain firsthand experience into the safety, versatility and fun that comes with winch flying.

For the amount of financial (greater than $55 thousand, yes?) and temporal effort we have put into adopting it, and the volume of instruction we get from it, I would be very disdainful of a decision to let the winch go.

Best

Tim

I would like to start out by echoing some of the arguments I have seen. The winch offers training that is essential for any glider pilot.

As glider pilots we often do not get the luxury of making normal altitude pattern. The winch procedures that are taught at Sky Soaring make you prepared for any aero tow rope break or abbreviated pattern if necessary. I think that if the decision is made to sell the winch, the instructors might consider incorporating these lesser practiced patterns into their training curriculum.

I would also like to point out that the winch is a great club resource in the late Fall, Winter, and early Spring months when the tow plane is not insured. I think a large part for the under representation of the winch in the 2020 statistics is due to the lock down restrictions that suspended our operations until may 1st. As I recall the winch was used extensively in the spring months of 2019 prior to the tow planes insurance becoming active.

If the clubs financial position forces the sale of the winch it would be unfortunate. I think that we should consider the unique benefits of the winch in our club.

Hope everyone is in good health. Im currently working at an Aerial Applicator school in South Dakota I would have never been able to acquire such a job without the experience gained flying the clubs Pawnee. The aircraft I regularly fly include but not limited to  c140, Piper J3, Piper Cherokee. I have my multi engine check ride tomorrow in the Piper Apache. Thanks for everybodys support throughout my training and look forward to visiting Illinois soon!

Congratulations on your recent certificate achievements Erik. Your future is bright,

Having the winch is really a great convenience I’ll be sad to see it go.

Ditto insights

Great comments Rich

Part of the explanation for lower flight numbers for the lower numbers last year was due to flooding and a pandemic. Even the last year the winch paid a profit over expenses for the year. It has been profitable for the last 3 years. That money helped to pay the expenses of Aerotows.
Aerotows lost money in 2 of the last 3 years.
Winch flights cost the club about one tenth of a typical aerotow.
Winch day member flights are more than 90% profit.
In the last 3 years the winch has had more use than any of our single place gliders. Does that mean the BOD wants to sell them also?

The winch has proven itself as safer than aerotows . We have had 2 near fatalities in our aerotow ops.
I have flown with hundreds of members. I have found that the student pilots that we have turned loose on the winch have better traffic pattern skills than our veterans flying their high performance ships.
With our current push on safety, maybe we should require all members to go through the winch training.
Larry Kase

I would like to echo Erik’s statement about the winch.   One of the big disappointments with the winch is that we are often limited in the altitude we can get on most launches, due to the relatively short length of our our runway.   The temporary use of the east agricultural field has partly solved this and we’ve been able to get releases of nearly 2000 feet agl depending on conditions.  

That said, there is safety value in being able to practice lots of pattern-height launches.  Even if one is not able to get a duration flight out of it, the habit of doing multiple launches and landings definitely builds your skills, and the launch itself is a lot of fun!  Yes, the first few you experience are intense and it feels like things happen FAST, but eventually you learn to anticipate the events and the launches become an absolute joy.   And as Erik said, winching forces you to think about low altitude emergency management and many of those same skills can be transferred to aero-tow launching.  It will increase your reflexes and make you a better pilot.  

Personally, I would like to see the club try to take better advantage of non-soaring days.  Just because there aren’t thermals, does not mean we can’t be out there working on pilot proficiency in the traffic pattern (and the winch is a great way to do this inexpensively).  Came up short on your last accuracy landing?  Get a winch operation going and make accuracy landings the goal of the day. 

AND, don’t forget that the winch is currently our only launch alternative in case our single tow plane goes down for extended maintenance.  Back in 2017 when the Cessna 150 towplane had an accident, the winch permitted us to keep flying for nearly two months until a new towplane was acquired.  

Board, please consider this decision carefully.

-Mark

Just a brief comment on Eric and Mark’s remarks: I have flown more than 1300 take-offs on my own or with my students on winch. We flew several dozen takeoffs a day. It is priceless for training the flight pattern. And for rope break training, when a lighting-fast reaction is required. With a length of 2790 ft at our airport in Czech, the average height reached was 1000 ft AGL. Enough for students to practice flying on pattern and make a landing decision. Sure, we didn’t have much flights on winch last year. As Larry pointed out, virus restrictions and airport flooding were one of the main factors, in my opinion. I think having a winch in our hangar is a good think.

There is nothing more I can add to all the good points made concerning NOT selling the winch, except that there were precious few winch operations in 2020. While we are fortunate in having many excellent tow pilots who quickly responded to any request for flight operations, I did not see this on the winch side. This made me wonder if the low number of winch launches could be more attributable to a lack of certified winch crews rather than a lack of demand. 

John

SSI Members,

It’s great to see all the comments, suggestions and ideas on the winch. Open discussion is good, in my opinion, and brings to light ideas that we may not have thought of ourselves.

With that in mind, a few of my thoughts on the idea of entertaining an offer to sell the winch and use the funds to address coming expenses. I have been around long enough to have been through several rounds of challenges to Sky Soaring’s on-going operations. We have survived previous challenges, and this is simply another one to be properly addressed.

One thing I learned in business school a long time ago is to ask the following question: What does the data tell us? We all have a lot of ideas and opinions on what we like or want and how we would like to see things play out. Turning to the data can give us some hard evidence of the situation at hand.

Here is what the data that I have had access to over the life of the winch project tells me.

Going back as early as 2015, the numbers for the winch have been a moving target. The original presentation for building the winch was that it would become a cash cow for the Club. That once paid off, there would be a continuous, positive cash flow that would add to the coffers of Sky Soaring. One of the original set of numbers claimed a cost of around $30,000 to build the winch and an annual rate of over 1,600 flights, each of which would contribute $8 gross profit to the Club ($2.00 in costs from a $10/launch fee). In reality, the winch cost closer to $50,000 to build by the time we got it finished. At one point, the breakeven number of launches was pegged at 625/year. That figure would allow us to cover the operating costs of the winch for a year, and service the debt of a 7-year loan at a 5% interest rate. No ‘profit’. No contribution to the general operating funds. Just enough to cover the operational costs and service the debt. It looked great on paper. The debate back then was lively, with members on both sides of the debate holding strong feelings about the viability of a winch operation. The majority voted for the winch and it became a reality over the next couple of years.

Fast forward a couple of operation years, and as pointed out in John DeRosa’s message, the most launches we have ever had is 427, in its first year of use. This is 68% of what was presented as the breakeven point. From there, for whatever reason, it has declined dramatically. The cash cow never materialized. Sure, there were bad weather days, lack of a full crew, lack of winch operation coordination, etc., etc. Things get in the way of even the best plans. But the data here tells me that the winch has not and, more than likely, will not live up to the projected financial windfall that the project was sold on. It’s a nice winch. It works well. But it is underutilized and represents an asset that is not anywhere near returning its promised ROI.

Now we are looking at the need to collect $20,000 for an engine overhaul for the Pawnee and the looming $80,000 payback of earlier debt to original members. All of this comes due by January of 2022 or earlier. The funds have to come from somewhere and monetizing underutilized assets is a perfectly valid approach to addressing the challenge.

The Board is elected to run the Club and they have a fiduciary duty to properly oversee the financial activities, both current and projected, and manage the Club as an on-going business entity. The buying and selling of assets are in line with those duties. I believe that it is their duty to entertain an offer to sell the winch and to investigate the parameters of such a sale and the use of the resulting funds. While we may not like to hear that assets may be sold to fund upcoming expenses, it is not at all uncommon in business to do so. I would encourage the Board to investigate the offer and see if it makes sense from a financial management standpoint, and if so, to proceed with the sale. They are elected to run the Club. Please allow them do their job.

Best Regards,

John F. Phelan

John, thanks for the additional input. I also have a management degree. I disagree with your cost analysis assumptions.
Applying your assumptions to the Pawnee gives it a break even rate of 2850 tows/year.  That rate will never occur. Are you suggesting we sell it also ?

When comparing assets that are already acquired, the financing should not be used for the decision making. Besides, the winch loan is almost paid off.
When financing is discounted, the break even for the Pawnee is 700 tows per year. The winch break even is very close to zero. Both are manageable at our club.

The problem of paying for the overhaul and share buyback Have already been solved with the loan proposed by the Board. At the last board meeting, I proposed a different option for financing. It was not passed along to all.

It is:   Have An interest only loan of $100k At 5% interest.  By carrying that financing, the club would continue it’s current growth rate and allow a dues reduction of $300 per member.
Larry Kase

I have received some updated info concerning winch expenses.

The winch loan is completely paid off. We have a side letter on our insurance for roughly $400/yr.

That gives the winch a break even of 57 member flights or just 9 day member flights. If the winch is not flown at all for an entire year, the cost for 50 members would be the price of 1 premium beer per year, about $9.
Is that too great of a financial burden?

Glider winches are made in California by Roman. The cost of a 2 drum winch with 450hp mounted on a truck would be over $110,000.
I would remind our BOD that the goal of SSI is too put smiles on the faces of our members. Not to earn the highest profit.
Larry

That is good news, Larry’s note, on payoff of a big loan!   No small accomplishment for ssi!  Especially since the engine had to be torn apart and rebuilt in 2017-2018, at a cost $$

I’d like to extend my appreciation to the Board for initiating this conversation. This is a great club. The friendships we’ve developed here are more important than any one issue. I respect the people who have submitted their opinions and perspectives here even if I don’t fully agree with them. My objective, as always, is to remember that friendships come first and that differing opinions can be discussed without taking things personally.

The main challenge I see with the winch is logistics, not finance. The minimum crew requires a highly trained winch operator, a focused winch director who acts as the communications coordinator, one or two wing runners, and a mule car driver. This crew needs to be on duty for several hours at a time to have a credible winch operation. It’s a challenge for an all-volunteer organization to pull this crew together. Planning launch crews ahead of schedule has never been a core competency at Sky Soaring – that’s not a slam, it’s just the way it is for an all-volunteer club.

I voted in favor of the winch when the club decided to get it. But at that time my concern was more cultural than financial. At the time, I wondered if Sky Soaring had the self-discipline to train and motivate enough members to run a credible and safe winch program. In my opinion, time has shown that it has not demonstrated the will and the self-discipline to create a credible and accessible winch program. Sure, we have a few dedicated members who use the winch and love it but there’s been no real program to get members motivated and trained to use the winch.

I’ve seen no stats on how many members we actually have that are checked-off to run the winch and who have been trained to be winch directors. If I want to fly a glider all I need to do is call a tow pilot. If I want to launch with the winch how do I make that happen? I have no idea who is certified to run the winch, nor do I have any information on days and times those individuals are available. Ditto for winch director. With all due respect to the people who have put time into training others to use the winch, I have not seen a program that’s been thought through, communicated consistently to membership, and integrated into club culture. It’s nobody’s “fault”, it’s just the way it is.

The argument that we need to sell the winch to come up with money for the buyback program seems a bit surprising. When the buyback program was conceived and agreed upon, liquidating the winch to pay for it was never part of the plan. Therefore, talk now to liquidate the winch for that purpose is misguided, in my humble opinion. There are other ways to finance the share buyback. As a householder, my responsible goal is to minimize my debt. But it’s not always correct to assume the same finance model applies to an organization like Sky Soaring. Debt is not always bad. Others can speak better on that issue than I.

I like the idea of having a winch for all the reasons cited by others in this conversation. But unless a team of people steps forward to take leadership in putting together a viable winch training and usage program and commits to follow-through, I’m skeptical that it will ever properly and safely fit into Sky Soaring’s all-volunteer culture.

Finally, I’d like to see stats on how many members are trained to use the winch and how many members actually want to serve as winch crew in 2021 (and how many hours they actually commit to!) and how many pilots want to use the winch in 2021. Those stats would speak volumes and would help the club decide which way to go on this issue.

We need accurate data on what members want and what they’re willing to pay to get it. Once the data is available, it will be easy to make correct decisions without drama. I’ve proposed we use a survey to ask members these types of questions, and I’ve drafted one and submitted it to the Board. So, if you see such a survey in the near future, please respond to it.

Thanks!

Mike Hurd

We intend to have a safer operation this year than any other year.  This needs to be our goal every year. Statistics show that winching is safer than towing.  Had Karl used a winch to lauch his glider, he would have been hundres of feet in the air before his incident.

Our private ship owners have not used the winch.  I hope to this summer.  However, our students have used it extensively two years ago.  Last year was a fluke.  Students who use the winch for pattern tow do many more landings before they solo than a student who only uses a tow plane.  This makes the student a safer pilot.

If we were desperate I’d understand why the board would consider selling the winch or a glider, but our club is not short of cash.  We have plenty coming in from dues and fight fees.  Our debt is approaching an all time low – winch is paid off, the mower and field not will be paid off this year.  The money which went to those items can be re-directed into the engine fund withoug sacraficing safety, nor selling the winch or a glider.

We need to figure out how to better use the winch, not sell it.  I’m willing to be the “Winch Cooridnator” ins 2021.

Art

Happy near year, all!

I’m new to this, so please take my perspective with a grain of salt:

I got lucky and caught a couple of the winch days this year and it greatly expedited my progress towards my commercial glider add on. It would have taken me much longer to achieve that in one season otherwise. I don’t think I’m the only one for which the winch was a valuable training tool, and as mentioned, it was barely available this year.

From reading these contributions to the debate it seems it’s not as much that people don’t want to fly the winch, but that not enough people are qualified to operate it. That might be a place to start? Can we market it externally within the glider community to generate interest, and if so, would we want to?

I realize we have obligations to think of, but I’d hate to see us lose a relatively unique asset simply due to underperformance that’s not caused by lack of interest, but by organizational limitations.

I’m grateful to have found the club and appreciate meeting and learning from many of you. CF

Fred
The Fred Show
5a-12p
KISS FM/WKSC/Chicago

Happy New Year !I hope all of you are healthy and safe first of all. I want to share my experience as a student regarding the latest discussion about the winch. I do my best in reading all the messages on the board and try to keep up with you guys :)I have joined this club in a time when there was no tow-plane available and the only ops were  winch ops. My first flight and a few after were all winch. Scary as it was on my first flight,I got used to it faster and I became more comfortable using the winch. My eight flight in my logbook was my first air-tow and to this day I remember getting more nervous because it was so slow compared to the winch….and took forever to get up :)Starting on the winch made me appreciate it as a very useful and efficient tool for practice and sometimes even for soaring. This last year was very challenging to say the least and I do believe that the winch can become a bigger asset if we come together as a club. I believe the club has enough members that can hold ops and can train others.  I like the winch and I believe if we operate it, we can even market it to people to visit and experience it. I know it sounds like a joy ride, but with some collective effort could be an option for creating funds.My main point is the winch can be a bigger asset if we use it more in the new year and with a bit of focus we can achieve that.Thank you and stay safe

Thanks for your support,Chris.The Lark is airworthy now. 

Larry Kase

Sent from my iPad

Laurentiu,Lawrence was one of our first students to solo the winch. Quite an achievement.. He also makes great videos. 

Sent from my iPad