Private Aircraft Supply and Demand
The supply of private aircraft on the market currently is high in historical perspectives, and the relatively soft current demand has pushed prices of preowned private aircraft to all time lows. At the same time as private aircraft manufacturers want to keep their operation at full capacity, they are offering great sales incentives to buyers right now. Those recent trends have caused a modest uptick in private jet sales as buyers are taking advantage of the market oversupply. Aviation consultants and industry professionals have reported seeing a recent rise in the number of first time private plane buyers, brought into the market by today's relatively bargain prices for private jets.
Financial advantages of ownership versus chartering or Fractional ownership
How can one determine the relative advantages of charters, jet card user status, fractional ownership as compared to private jet ownership and which makes the most sense for you? The decision to buy a private aircraft is driven by three considerations: status, financial, and operational. The status issue is purely and completely a personal one and can only be judged by the persons themselves. The financial issue relates to potential savings in direct travel costs or possible tax benefits of outright ownership as compared to alternative means of private flight travel, typically charters, jet card or fractional ownership - used currently by the prospective buyer.
Operational reasons for private ownership
The ownership of a private airplane can transcend the cost and status considerations and make ownership the preferred solution even if it's a more expensive one than the other alternatives. Let's consider each.
Financial Considerations
Air charter and jet cards are great ways to enjoy the benefits of private travel. But once you reach a certain level of aircraft usage, typically above 200 hours of flight time per year it can cost less to buy and use your own jet than fly those same number hours chartering, using a jet card, of even through fractional jet ownership.
But calculating the point at which ownership is less costly than other options isn't simply a matter of toting up flight time and determining hourly costs. The kind of flying you do, the places you go, the number of travelers on the aircraft also play a role in the economics of ownership. For example, ownership is much more cost effective if you primarily fly round trips, avoiding deadheading costs or multi-day hangar and ground handling fees and airline tickets home and back for the flight crew. If you primarily fly one way, a fractional ownership share or a jet card could be a better solution than full ownership, because fractional and jet card costs are based on one-way flights.
If you utilize the same category of aircraft for your flights at least 80 percent of the time, private ownership can also make economic sense. However, if your mission changes regularly, traveling long range on some flights, short to mid-range on others, sometimes with just one or two colleagues, other flights with a whole team, then looking to purchase a private airplane would not make much sense, no matter how sweet the deal, because one category of aircraft would not serve the majority of travel needs. Charter could be better for this scenario, because you can always select the right aircraft for each flight. Some fractional ownership programs and jet cards allow customers to select among three or four aircraft categories (light, mid-size, super-midsize and large cabin/long range jets) and use more than one aircraft simultaneously, providing another option for fliers who need access to several categories of aircraft.
But when considering owning a private jet, don't think only about the flights you're making now. Think about the ways your organization could use an aircraft - to see clients, prospect for new business, manage far flung business operations. Don't be surprised if you come to the conclusion that not having a private jet is costing you plenty in missed opportunities.
Operational Considerations
Owning a private airplane is far more than simply a matter of saving money over other forms of private air travel, or even taking advantages of opportunities that would be unavailable otherwise. The advantages of private jet ownership can make financial considerations secondary, and these benefits should also be weighed when considering whether to buy a private aircraft.
If you often need to make flights on short notice, or have an unpredictable schedule or planned route, the total access that ownership provides is its own greatest benefit. With your own private plane, there is no minimum call out time, no concern that all the charter aircraft are booked when you need to make a critical flight. Even jet card and fractional ownership programs may take hours to sometime days during busy time periods like holidays to make an aircraft available.
The safety and security of outright ownership is another benefit that transcends cost considerations. As the owner of the aircraft, you know the crew and the configuration of the aircraft. In fact, some corporate executive insurance policies stipulate travel and security conditions and provisions for key executives that practically dictate travel by private jet.
For many owners, the sheer convenience, ease and comfort of traveling aboard one's own airplane is reason enough to have a private jet. Personal items can be kept on the jet and the cabin can be outfitted and appointed to the owner's taste. The aircraft becomes like a home away from home.
Getting Expert Help
If your wonder how the above or other issues you may have considered and wonder if a private jet purchase would make sense, consulting an expert aviation professional for advice is the best possible step to take. The private aircraft sale process is a complex transaction requiring input from an aircraft professional, a tax advisor and a legal consultant and involves complex negotiation, detailed extensive paperwork and takes significant time and possibly multiple document revisions, as mistakes in aircraft selection or negotiations can be very expensive. Working with an experienced aircraft broker, aviation attorney and others who specialize in the purchase and sale of private aircraft, will ensure you make the right choice and pay the best possible price for your private airplane.
Daniel Jennings is the Founder and CEO of The Private Jet Company, headquartered in Palm Beach, FL. The team at The Private Jet Company are experienced professionals in private jet sales and acquisitions and work with clients worldwide on aircraft as diverse as Gulfstream G-550 to the Pilatus PC 12. The Private Jet Company has the market data and expertise to provide valuable market intelligence to our clients and negotiate the best aircraft transaction possible on their behalf. They focus on finding the right airplane to match the intended use, budget and operation, and work closely with the client, their tax advisors and attorneys to ensure the transaction is completed with the least amount of surprises. Please contact Mr. Jennings to discuss your aviation needs. He can be reached directly at 310-980-9069 or Dan@theprivatejetcompany.com.
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