What your fleet reserve should actually be
Clubs without a reserve do not fail gradually. They fly the trainer until it is finished, discover the replacement costs several times what the last one did, and have the conversation in a single evening. This is the arithmetic that avoids that evening — and it is not the arithmetic most reserves were built on.
The club, per year
Per member, per year
Per member, monthly
The working, line by line
Every intermediate figure, because a treasurer is going to check this against a spreadsheet before taking it anywhere.
| Replacement cost in years (inflated at %) | |
| Trade-in value then, inflated on the same basis | |
| Net required at replacement | |
| Existing reserve, compounded to then | |
| Still to be raised | |
| Annuity factor at % over years | |
| Annual contribution |
If your reserve was sized by dividing, it is short
Three things are missing from that division and all three point the same way: the replacement inflates, the trade-in inflates from a much smaller base so it does not cancel, and each year's contribution only earns a return for the years remaining rather than for the whole period. The shortfall also compounds, because the missing contributions are the ones that would have been earning longest.
Your fleet
The two numbers your committee will argue about
What "we'll look at it next year" costs
That delay is longer than the time you have, so there is nothing left to calculate — which is itself the answer.
| Year | Opening | Interest | Contribution | Closing |
|---|---|---|---|---|
Contributions land at the end of each year, which is how clubs bill and is the conservative assumption. Paying at the start of the year would add one year's interest to the closing balance.
A = (C − T − R) × i ÷ [ (1 + i)n − 1 ]
- A
- the amount to set aside at the end of each year
- C
- replacement cost when the time comes: today’s delivered cost, inflated at glider price inflation
- T
- the trade-in value then, inflated on the same basis
- R
- what is already in the fund, compounded to then at i
- i
- the rate the reserve earns, not net of inflation — inflation is already in C and T
- n
- years until you need it
[ (1 + i)n − 1 ] ÷ i is the annuity factor in the working above. At i = 0, a reserve that earns nothing, it is n and A is (C − T − R) ÷ n; every point of return the reserve earns lowers A from there. The naive figure the page compares this with is today’s price gap divided by n, with no inflation and no return.
What this assumes, and what it can't know
The replacement price is the input that matters most and the one we refuse to supply. Get it from a dealer as a delivered cost — aircraft, trailer, instruments, shipping and import — not a brochure list price. Most trainers are priced in euros, and the exchange rate has recently moved the number more than the manufacturer has.
Inflating the trade-in on the same rate as the replacement is an assumption, and a debatable one. A forty-year-old trainer's resale value is not obviously tracking the price of a new glass ship. It is shown as its own line so you can argue with it; setting it to zero is a defensible conservative choice.
This funds one aircraft, not a fleet. A club with a trainer, a single-seater and a towplane has three of these running at once, on different clocks. Run it three times and add the results; the towplane is usually the one that has been quietly ignored.
Interest on the reserve is nonmember income. If your club holds 501(c)(7) exemption, investment income counts toward the 35% test — the same allowance your introductory flights draw on. Once this fund is built it will be throwing off about a year. Put that into the nonmember income calculator and see what it costs you in rides.
It says nothing about whether you should replace the aircraft at all. Refurbishment, a different type, or operating a smaller fleet harder are all real answers, and the right one depends on things no calculator holds.
Not yet checked by anyone but me. If you run a club's books and one of these assumptions is wrong, I would genuinely rather hear it than not — tell me and I will credit you here. This is a budgeting estimate, not a quote. Every club sets its own rates and they change; check with the club before relying on a number.
Common questions
How do you calculate a sinking fund to replace a club glider?
Inflate today's delivered replacement cost to the replacement year at the rate glider prices rise, subtract the trade-in value inflated on the same basis, and subtract any existing reserve compounded to then; what remains is the sum still to be raised. An annuity factor at the reserve's rate of return over the years until you need it turns that sum into an annual contribution. Contributions are assumed to land at the end of each year, which is how clubs bill and is the conservative assumption.
What should the replacement cost of a club glider include?
The replacement cost should be the delivered cost from a dealer, covering aircraft, trailer, instruments, shipping and import, not a brochure list price. That figure is the input that matters most when sizing a replacement reserve. Most trainers are priced in euros, and the exchange rate has recently moved the number more than the manufacturer has.
Should a fleet reserve inflate the trade-in value as well as the replacement cost?
Not necessarily: inflating the trade-in at the same rate as the replacement is an assumption, and a debatable one, because a forty-year-old trainer's resale value is not obviously tracking the price of a new glass ship. Setting the trade-in to zero is a defensible conservative choice. Even when it is inflated, the trade-in grows from a much smaller base, so it does not cancel the rise in the replacement cost.
How do you plan replacement reserves for a whole gliding club fleet?
Size a reserve for each aircraft separately and add the results, because one sinking-fund calculation funds one aircraft, not a fleet. A club with a trainer, a single-seater and a towplane has three reserves running at once, on different clocks, and the towplane is usually the one that has been quietly ignored.