Whether a fleeting thought or a serious consideration, many skydivers have entertained the idea of owning their own drop zone. After all, a common refrain of drop zone owners is, “I’m living the dream, baby!” Who wouldn’t want to walk a mile in those shoes? However, while DZ ownership comes with many rewards and can be lots of fun, it’s not as easy as one might think.
Supply and Demand
One skydiver performed an informal poll and found that only one in four adults would even consider making a skydive. If this statistic is correct, right off the bat the consumer market for skydiving in the United States goes from 256 million (those 18 or older) to 64 million. Of course, only a very small percentage of those who might consider making a jump actual do. USPA estimates that in the U.S., approximately 550,000 tandem skydives and 70,000 other training skydives (static line, IAD and AFF) occur each year. Only about 5,000 to 6,000 people per year move beyond a first jump to earn a USPA A license. No doubt about it, statistically speaking, skydiving caters to a miniscule share of the population.
Skydiving also sees its heaviest traffic on weekends, and for many DZs it makes economic sense to operate only on those days. That means in the best-case scenario, many drop zones are open about 104 days out of every 365. But of course, skydiving is weather-dependent, so in some locations, DZs lose up to half of their operating days due to poor weather. With such a limited customer base and the challenges of operating a weather-dependent business, it’s easy to understand why there is not a drop zone on every corner.
Expenses
The vast majority of drop zones in the U.S. are mom-and-pop-style small businesses that operate with the same challenges that any other small business might have: making sales quotas, managing expenses, handling staffing and payroll, advertising, purchasing insurance, etc. But owning a drop zone also poses more unusual challenges, as well. In 2019, Tom Neilson and Jason Berger founded Skydive the Falls on a grass airstrip near Niagara Falls in upstate New York. When it came time to obtain local government permitting, they found they needed to build a new 600-foot access road suitable for fire trucks in order to meet existing fire codes. Neilson said; “We got it done, of course, but it was an expensive and unexpected use of funds during our start up.”
Most skydivers have heard that jump airplanes are expensive but really don’t understand just how expensive. When opening Skydive the Falls, Berger and Neilson faced the reality of airplane ownership for the first time. Neilson remarked, “As jumpers for many years, we had heard of 100-hour inspections (a Federal Aviation Administration requirement for piston-engine jump aircraft such as the Cessna 182), but we never had to directly pay for one.”
Cessna 182s, which carry four jumpers and a pilot, are the backbone of skydiving in the U.S. The average purchase price of an older 182 jump plane is approximately $40,000 to $60,000. The FAA mandates that it must be inspected every 100 hours of flight time, and these inspections can be quite costly. Maintenance shops start with a base fee for the inspection process (which ranges between about $800 and $1,200) and add charges for any work required as a result of what they discover.
It takes the discovery of only one or two worn-out items to drive the bill into the thousands or even tens of thousands of dollars. A cylinder replacement can run about $1,700 (and a 182 has six of them). A basic insurance policy for a Cessna 182 can run as much as $5,000 annually. And with only four revenue-generating slots on the airplane, it’s a challenge to operate profitably. It requires a significant amount of solo- and tandem-student training revenue in addition to what licensed jumpers pay for slots to make ends meet.
The expense of a 182 is miniscule when compared with that of buying and maintaining a larger, turbine-powered airplane. The initial purchase price starts at $270,000 (for a well-used King Air) and escalates quickly toward $2,000,000 (for high-end Twin Otters and Cessna Caravans). Maintenance and insurance costs for larger turbine airplanes are also formidable. Upheaval in the aviation-insurance industry has led to soaring rate increases for skydiving aircraft in the past few years. Some operators have had rates double in the past two years alone and now are paying as much as $60,000 per year.
Turbine engines are generally very reliable but when they need repair, the bill is a big one. Not only do these airplanes have to generate a lot of revenue per hour, they need to fly a lot of hours each year to cover the annual expenses, as well as allow the operator to put enough money away for expensive (and often unexpected) repairs.
To eliminate the worry of maintenance and insurance costs, some DZOs choose to lease an airplane rather than buy one. However, lease agreements usually include weekly or monthly minimums that the DZ operator must meet regardless of whether the airplane flies at all. If it rains three weekends in a row, the DZO still has to send out a check for the minimum amount established in the lease agreement. Mailing off a check for $4,000 on Monday morning after a rained-out weekend is painful, and the business must have some reserves to absorb those large losses.
Operating a drop zone also requires a substantial investment in tandem- and solo-student equipment. With new tandem systems running between $12,000 and $16,000 and solo-student-container systems commanding $6,000 to $7,000 per complete rig, it adds up really quickly! In addition to the rigs, the drop zone must own jumpsuits, helmets, altimeters, goggles and radios when putting students into the air.
The Business Side
Oddly enough, despite the high overhead and increasing annual expenses, many drop zones continue to provide 1990s-era pricing for jump tickets. That might seem like good news for jumpers, but in many cases, it becomes an unsustainable business practice that leads to a drop zone closing. Adding to the problem is that for the last decade, the competition for tandem business in many markets has driven the price of a tandem skydive into the basement. Many drop zones use third-party service providers such as Groupon to gain a higher volume of customers but usually at a rate so low that the business loses money in the long run.
Sammy Vassilev, who owns Skydive Fyrosity in Overton, Nevada, is one of many who did not expect the strong influence of discount resellers when he opened his drop zone several years ago. “The biggest surprise for me is how much Groupon, Adrenaline, Rushcube, and all the other third-party deep-discounted reseller companies have taken control of our industry.” Vassilev said. His observation is that prices have gone down across the board. The high-volume, low-profit tandem business model works for some locations that are close to major population areas, but for most drop zones, it is a losing proposition. Many drop zones are now shying away from the discount business model.
Abbie Mashaal, who owns DZONE Skydiving-Boise in Star, Idaho (as well as other DZONE locations in Idaho and Montana), points out how many operators are working on their finances from the wrong direction. He said, “Trust math. Basic spreadsheet skills are necessary in any business, and a drop zone is no exception. Run your numbers and charge what you need to charge to provide the experience you are proud to offer instead of spending all your energy figuring out how to … meet some arbitrary consumer price you have in your head.”
Keeping a handle on the business side of running a drop zone requires a lot of time and effort. For the average mom-and-pop drop zone, that means lots of late nights, in many cases after getting home from working a Monday-through-Friday “real job.” Someone must pay attention to customer service, scheduling, accounting, taxes, financial matters, website optimization, social media and advertising in order for the business to remain in operation. Although an outside service or employee can perform many of these duties, most small drop zones don’t have enough revenue coming in to farm out the work. The DZO has to wear many hats.
The People Side
For any drop zone to survive, it needs to have instructors who can train and jump with students. Almost all drop zones grow their own staff by bringing up newly licensed skydivers and encouraging them to obtain ratings when they have the necessary experience. This system is the lifeblood of most drop zones. But raising your own instructional staff is time consuming and difficult.
If you ask almost any drop zone owner, they will tell you they could use more instructors. Martin Myrtle, longtime owner of a drop zone in Kansas, finds it to be one of the hardest parts of running his business: “I’d say my biggest challenge is with staff. As a weekend-only, 182 DZ, we have to bring up 100 percent of our staff. Granted, the larger DZs bring up their own staff, as well. But they also hire those who come out of operations like mine. It takes three years in the sport to qualify for the tandem rating, then 200 tandems to wear a handcam. [That can take] another two to four years of working with a new guy, giving him tandems with no video. What percentage of new A-licensed skydivers make it to the D license, let alone five or six years [of jumping]?”
Like it or not, the DZO title comes with a ton of responsibility that changes how you relate to your jumping friends, and it also changes how they relate to you. Heather Whittaker noticed a change when she took over as DZO of Skydive Toledo in Washington. “I think one of my biggest emotional struggles was transitioning from fun jumper to DZO,” Whittaker remarked. “My friendships changed, and I found I either lost friends because of my new position or many of them just faded away as I became embroiled in the running of a busy business. Sometimes I wonder, if I had known how my life and relationships would change, if I would have done it at all.”
Owning and operating a drop zone is not for the meek. But most of the rare few who step up to the challenge wouldn’t have it any other way. “When I watch a tandem land and see the excitement on the first-time jumper’s face, I remember why I got into this,” Whittaker said.
After a busy weekend filled with lots of fun skydives and happy customers, most DZOs would agree with Whittaker, knowing their hard work played a part in so many life-changing experiences. So, next time you are at your drop zone, be sure to take a minute to thank your DZO for all the late nights, long days and working through a seemingly endless parade of problems to keep the drop zone open. And if you decide you want the challenge of owning a drop zone, just remember that it’s a tough job, but somebody has to do it!
Obviously, the COVID-19 pandemic will have many repercussions—economic and otherwise—on drop zone owners and the skydiving industry as a whole. Although times may be tough, skydivers have a long history of supporting and assisting one another. USPA pledges to do its part to help in any way it can as the fallout from this crisis becomes more clear.
About the Author
Jim Crouch, D-16979, is an FAA-rated Airline Transport Pilot based in Tampa, Florida. From 2000-2018, he was the USPA Director of Safety and Training while simultaneously owning and operating drop zones in Virginia.