Considerations for Buying an Aircraft
July 14, 2020
Comparing Commercial Flights and Private Aviation Options
Owning a Business Aircraft Can Save Frequent Fliers Time and Money
Executive air travel is a necessity to negotiate business dealings, to build client and vendor relationships, and to attend important domestic and international events. C-suite leaders who fly via commercial airlines report spending many hours in airports, waiting on their next flight to depart, and arriving early to check in and arrive at their gate plenty of time before take-off. Even with the shortened wait times that come with TSA Pre-Check, executives still have to get through security and sit at their gate in a large group or locate the private airline lounge, risk contact with illnesses, and lose out on time they could spend coaching their teams and moving their business forward.
Not all transportation options are created equal, as anyone experienced in the aviation industry will tell you. There are several choices between flying in a Boeing-747 with hundreds of other people and owning a business jet. To determine the most financially and logistically feasible choice requires consideration of benefits and disadvantages of each flight option:
Commercial Flights on Traditional Airlines
Jet Card Memberships
Leasing a Private Jet
Fractional Jet Ownership
Taking Commercial Flights
Commercial flights on popular airlines, departing from traditional airports, cater to thousands of travelers per day. Their security operations are governed by the TSA, and anyone cleared to fly can board airplanes to almost any destination worldwide. Airports who work with commercial airlines tend to be located near major metropolitan areas.
There are plenty of good things that go along with this very public mode of aviation: no need to hire your own crew, pilot, or team to prepare your aircraft for takeoff; no need to own your own aircraft; and individual plane tickets are relatively inexpensive, even for first-class seats.
There is nothing inherently wrong with flying on a commercial airline. However, this method comes with several disadvantages that may not be conducive to comfort or strict timelines. Commercial flights can be crowded, packing in hundreds of people onto one airplane. With set schedules, it is not always possible to book tickets at the desired times on ideal days for travel. These planes offer little privacy or ability to conduct business meetings while seated aboard a commercial aircraft, particularly when addressing sensitive issues or discussing confidential matters. Long wait times in airports before flights and during layovers interfere with the busy schedules of executives. And finally, the convenience of taking a commercial flight with a typical airline is dictated by how nearby you live or work to the closest major airport.
Charter flights offer a slightly more private variation of air travel than commercial airlines, as well as greater scheduling flexibility because when you purchase charter flight services, you can determine where and when you’d prefer to fly. Charter flights also tend to be direct, saving time that might have been wasted during a layover.
Group discounts are more readily available for smaller teams flying charter, and it takes far less time to prepare, board, and take off from the runway than a regular commercial airline. Depending on their size, charter planes can access more remote locations at smaller airports, negating the requirement to depart from a major city, and possibly saving lots of time commuting to the airport.
Charter flights are not the perfect solution for executive travel. Most charter services require advance notice and booking to fly, working through a third-party booking service or scheduling flights with someone unfamiliar with your business needs. Chartering a plane is often more expensive than other methods of flying, especially for those who frequently travel by air. Each trip’s cost, although not unreasonable individually, adds up to a total dollar amount that some accountants may balk at. Many charters also have stringent cancellation policies that may not include offering refunds. In terms of privacy, although fewer people fly in a chartered plane as compared to commercial airlines, there is still little available for working executives.
Jet Card Memberships
Using a jet card, a membership service for accessing private aviation, is as close as you can get to owning a fractional share of a business jet. There are several jet membership companies operating worldwide, and your experience and the cost can vary depending which you choose and the type of aircraft you prefer to fly aboard.
When you purchase a jet card, you generally prepay a certain number of flight hours, and each trip you take is deducted from the original total. The pre-negotiated rate per hour means your assistants, finance department, and operations teams no longer need to fight for the best pricing, nor do they need to handle the intricacies of maintaining a business jet or preparing one for takeoff. Booking a flight with a jet card provider is quite simple and does not require contacting a third-party travel agent.
Some jet card memberships include guaranteed availability — when you call, your provider must find a plane for you. Others do not. There are also limits in locales you can travel to, sometimes with regional service areas, domestic-only, or varying coverage. If executives at your company need to travel outside these designated areas, their jet cards are rendered useless. Above all, before purchasing memberships to a jet card service, be sure to carefully examine their operating procedures. Note that depending on the size of jet available, the cost per hour will vary, and your jet card company may require you to pre-select aircraft size and amenities when you purchase your card. Consider what your company will look like three, six, and even 12 months down the road to ensure the service you purchase will remain a good fit.
Leasing a Private Jet
When you choose to lease a private jet, you get a lot of the benefits of owning your own aircraft with a cost savings that might make sense for your business. If your company doesn’t quite have the financial means to purchase a private jet for business trips, but your C-suite executives and business leaders fly enough hours to justify a private jet, you can consider leasing.
Dry-leasing refers to leasing a private jet without pilots, cabin crew, maintenance, or insurance, and gives you a longer timeframe for which you’re in possession of the jet. It would be up to your company to provide the skilled team to fly, care for, and maintain the business jet that you’ve selected to lease. Generally dry-leasing is a long-term lease over the course of multiple years. Wet-leasing, conversely, tends to be for a much shorter timeframe and includes the staffing necessary to fly.
While leasing gives you the option of walking away when your lease is up and never having to reconcile the depreciation of the value of any aircraft, your company also does not actually own the valuable business asset that is a private jet, and you do not recoup any costs by selling the jet to upgrade your fleet.
Fractional Business Jet Ownership
Although initially it may feel like an extravagant expense, business jet ownership can be ideal for some companies and c-suite executives. With two types of jet ownership common today, your firm could greatly benefit from one of them.
Fractional business jet ownership means you pay only for partial ownership of an aircraft. Much like a timeshare, fractional jet owners are granted a specific amount of time per year in the private aircraft, and the total number of hours depends on the size of the share you own. The total operating time for a fractional jet is based on 800 total hours per year — that’s including every fractional owner. So, depending on the size of your share, you may get as little as 50 flight hours per year, or as many as 400.
Shares are usually a five-year commitment, but shorter contract periods are sometimes available, depending on the company you work with. You can expect to pay additional fees on top of the cost of the shares you purchase, including an acquisition cost, which depends on the type of plane and size of your share; a monthly maintenance fee; and a pre-paid hourly fee that covers line items like fuel, aircraft maintenance, and on-board crew. These initial costs add up quickly, ranging from a few hundred-thousand dollars to several million.
Fractional jet ownership provides private flights for executives to carry out their business while en route to their destination, and does not demand sacrificing comfort; most business jets are equipped with amenities that cater to business travelers, including adequate tabletop space for computers and paperwork; kitchenettes for snacks, meals, and beverages; and restrooms spacious enough to accommodate changing into business attire during the flight.
Full Business Jet Ownership
Conversely, owning a private business aircraft outright eliminates stacked fees from a fractional jet contract and allows a company to operate their aircraft as little or as often as necessary. Owning an aircraft also ensures the amenities aboard align with your company’s needs, with the option to sell and purchase a larger or smaller aircraft if those needs change. Ownership also allows you to recoup some of the initial investment if you choose to sell.
The privacy and comfort of a private business jet are quite similar to those of fractional jet ownership, but owning an aircraft outright means there will never be a need to schedule flights around another organization’s calendar items. Full ownership eliminates the hoops your executives must jump through to board a plane and fly to their destinations for their next big business meeting, and puts aircraft maintenance and travel plans in the hands of an organization that truly understands their business needs: your own.
Note that owning a business jet is not lavish or over-the-top. Privately-owned business jets ensure efficient air travel, without wading through crowds at airports, waiting hours during layovers, or working with a third party to schedule flights. They allow business to continue in private, which ultimately means your executive team accomplishes more as they travel to their destinations.
Find Business Jets for Sale at AircraftExchange.com
Companies seeking to purchase pre-owned business aircraft can find vetted and authentic listings for aircraft from turbo props, to light jets, to mid-size jets, and large jets for sale at AircraftExchange.com.
Feel confident that the aircraft for sale on our website are represented by ethical, transparent, and knowledgeable aircraft dealers accredited by the International Aircraft Dealers Association, the only organization to provide accreditation to dealers all over the globe. Begin your search for your company’s next aircraft.