Is a wet or dry rate better for a small partnership?

A wet rate with automatic fuel credits is usually the best of both: pilots see one simple number, but anyone who buys fuel out of pocket is reimbursed on their next invoice, so nobody subsidises anyone else's expensive fuel stop.

How often should a wet rate be reviewed?

At least twice a year, and immediately after any sustained fuel price move. A wet rate set two years ago is almost certainly draining the reserve fund.

How do I work out my aircraft's real fuel burn?

Divide twelve months of gallons purchased by twelve months of hours flown. That captures climb, taxi and imperfect leaning, all of which the POH cruise number ignores.

Wet vs Dry Rates in an Aircraft Partnership

Wet rates include fuel, dry rates don't. The choice changes who carries fuel price risk, how much bookkeeping you do, and how fair the bill feels on a long trip.

What the two words mean

A wet rate includes fuel in the hourly charge. The pilot pays one number per hour and never thinks about avgas again. Whoever manages the aircraft buys the fuel, and the rate has to be set high enough to cover it.

A dry rate excludes fuel. The hourly charge covers the engine reserve, maintenance and everything else, and each pilot buys their own fuel and keeps the aircraft topped to an agreed level.

Both are common. They fail in different ways.

Wet: simple to fly, harder to price

Wet rates are pleasant for pilots. Land, log the hours, done. That simplicity is worth a lot in a group where one or two members are not detail people.

The problem is that the group now carries fuel price risk. If you set $95 an hour wet on a nine gallon-per-hour aeroplane when avgas was $5.50, and avgas is now $7.00, you are quietly losing about $13.50 an hour. Multiply by 120 hours a year and the reserve fund is $1,600 short without anyone doing anything wrong.

The second problem is trip distortion. A partner who flies to a field where avgas is $9.50 costs the group far more per hour than one who only ever buys at the home field at $6.20 — but both pay the same wet rate. Over a year this can be a genuinely large transfer between partners, and it is invisible until someone works it out.

If you use wet rates: review the rate at least twice a year against actual fuel spend, and write into the agreement that the rate tracks fuel price. A rate nobody is allowed to change without a full partnership vote is a rate that will be wrong for eighteen months at a time.

Dry: fairer, more admin

Dry rates put fuel cost exactly where it was incurred. Fly somewhere expensive, pay for expensive fuel yourself. Fly economically, keep the saving. There is no cross-subsidy and no price risk sitting on the group.

The cost is bookkeeping and discipline. Somebody has to enforce the fuel-level convention — usually "return it as you found it" or "always return full" — and disputes about tank state are more common than they should be. The pilot who lands with the tabs dry and leaves it for the next person is a recurring feature of dry-rate groups.

Dry rates also make it harder to compare your costs to anything else. Every rental quote you will ever see is wet, so a partner cannot easily sanity-check whether the group's rate is reasonable.

The hybrid most groups end up with

The arrangement that solves both problems is a wet rate with fuel credits: the group quotes a wet rate, and any partner who buys fuel out of their own pocket is credited back on their next invoice for what they spent.

This gives you the simplicity of wet — one number, easy to explain, comparable to rental — while removing the cross-subsidy. The partner who paid $9.50 a gallon away from base gets that money back. The group carries no fuel price risk on flights where the pilot bought fuel, and only a little on the rest.

The catch is that it only works if the credits actually get processed. A shoebox of receipts that gets reconciled "when there's time" is worse than either pure system, because now partners are out of pocket and waiting.

How to set a wet rate properly

Work from your aircraft's real burn, not the POH cruise figure, which is optimistic and assumes leaning nobody actually does.

Take total gallons purchased over the last twelve months.
Divide by total hours flown in the same period. That is your true burn, including climb, taxi and the time somebody forgot to lean.
Multiply by your typical fuel price, plus about 5% for price drift.
Add your hourly engine reserve — overhaul cost divided by TBO.
Add $8 to $15 an hour for oil, tyres, brakes and the propeller fund.

On a Cherokee 180 burning 9.5 gallons at $6.75, with a $32,000 overhaul over 2,000 hours and $10 of sundries, that comes to about $64 + $16 + $10 = $90 an hour. Fixed costs — hangar, insurance, the annual — sit outside this and are recovered through monthly dues, not the hourly rate.

The rule that prevents most arguments

Whatever you choose, write down the fuel state the aircraft is returned in, and make it unambiguous. "Full" is unambiguous. "As you found it" is not, because nobody remembers. Groups that specify "returned full unless agreed otherwise, and the next pilot may bill the previous pilot for the shortfall" have almost no fuel arguments.