Considerations for Buying an Aircraft
May 22, 2021
Choosing the Best Time to Buy a Private Jet
Business Jets for Sale Make Travel Easier
There’s no set time to buy a private jet. The time is right based on your business’s finances and travel requirements and the results of a cost analysis to determine the type of business travel best for your company.
A private jet is a major investment, costing hundreds of thousands of dollars to tens of millions of dollars, just for the initial purchase price, not including annual fixed and flexible costs, which also can add up into the millions.
To determine whether now’s the right time to buy a business jet for sale, calculate a cost analysis and compare it to the benefits you’ll receive from flying privately.
Can You Afford a Private Jet?
To begin the process in determining whether a private jet is a sound business purchase, you’ll need to calculate net present value (NPV).
Calculate the NPV for a private jet by considering costs like:
- Jet purchase price, which will vary by size, age, and model
- Fuel costs
- Maintenance program fees
- Hangar and storage fees
- And more
Then, compare these costs to the revenue that owning a business jet may generate. In the case of NPV for a jet, you’ll want to think about the amount of money that owning a private jet would save your company as compared to other forms of business travel: commercial airlines, jet charters, fractional ownership, or jet card memberships. You’ll also want to use the cost of a pre-owned jet versus a new jet when calculating your NPV.
When calculating the value a private jet brings to your business, you’ll also want to determine how shareholder value correlates to your company’s private aviation operation.
Identify the growth and efficiency drivers that are used to measure your organization's growth based on how it uses its assets and resources.Learn more about this calculation and considerations necessary to complete it.
The Costs of Maintenance of a Luxury Private Jet for Sale
Ongoing jet maintenance is not optional. Most private jet owners choose to purchase a maintenance program that ensures their jet is always in operational condition.
Maintenance costs also can include certain operating costs, such as hull and liability insurance, hangar fees, pilot and crew training, fuel, landing fees (which are charged at each airport you land at), plus the cost of refreshments or catering aboard the aircraft.
Fixed costs, like hangar fees or crew training, are essentially a flat rate. However, costs like fuel and landing fees are flexible and can vary depending on how many hours you fly and trips you make in your private jet.
How Often You Fly in Your Private Business Jet
Most companies considering purchasing a business jet fly at least 150 to 250 hours per year. Some fly significantly more. Anything less will likely not yield cost savings or value comparable to the major investment.
Of course, you can make up for the time difference between how often you fly and how often you must fly to make your investment worthwhile by renting your aircraft to other travelers, or through fractional jet ownership.
Potential Tax Deductions for Private Jet Ownership
Jets used primarily for business purposes could garner their owners a tax deduction. It’s possible to recover up to 70 percent of your jet’s initial cost within three years thanks to the IRS’ definition of the useful life of a private jet - just five years. However, your private jet easily can last for decades.
After a tax law passed in 2017, companies that purchase private jets for sale can deduct 100% of the bonus depreciation of their aircraft, meaning the business can deduce the full depreciation of the aircraft. Tax deductions do not apply to recreational aircraft usage; you must use your jet solely for business travel.
Ready to Buy a Business Jet for Sale?
The best time to buy a private jet is when your company can justify the investment. If you determine your company is in the market for a business jet, start your search at AircraftExchange.com, where you’ll find vetted and verified listings of aircraft for sale all over the world. The website also connects you with International Aircraft Dealer Association (IADA) Accredited Dealers who can help you facilitate your very important purchase.
You can trust an IADA Accredited Dealer because they’ve committed to upholding the highest ethical standards and have earned the respect of their peers and other private aviation service providers.
Browse private jets for sale on AircraftExchange.com, or contact an aircraft dealer near you.