How to Buy Your Own Jet
Fabrizio Poli
Entrepreneur, Aviation Advisor, Airline Transport Pilot, Pilot Coaching-Mentoring, Aircraft Buyer & Leasing, Futurist, Speaker & Author.
With the lower price of fuel more business will be done internationally in 2015, so the time may be right for you to buy your own private jet. However, buying a plane isn’t like buying a car and seeking the right professional advice is definitely the way to go, unless you want the risk of sleepless nights and lots of headaches…
DO YOU REALLY NEED TO OWN ONE?
? At what point does ownership, which would set you back around $4-5 million for an entry-level jet, make economic sense? While there is no magical number, as a rule of thumb, if you spend over 250 hours a year in the air, that's when you might want to start shopping around for your own set of wings. Anything less and a charter or fractional ownership would probably make more sense.
? One of the key advantages of owning your own aircraft is that you can customise it to suit your needs and tastes. If work is priority in the air, you can set up a conference grouping on board. But if flying is the only time you can get any real sleep, then installing a bed with your favourite mattress is a no-brainer.
? You may not always get the same plane when you charter, and of course it may not be as readily available.
TRY B4U BUY PRIVATE JET PROGRAM FOR 3-36 MONTHS?
If you are either not yet ready to buy a jet or not quite sure which one to buy, Tyrus Wings offers a Try B4U Buy Private Jet Program.
The benefits are:
Aircraft available at your local airport 24/7
Same benefit as owning your own jet, but without the financial outlay
Crew 100% dedicated to you & your guests
This Solution Will Work For you if…
You own an aircraft and it is going into maintenance for a while. We will arrange an interim jet for you and your own crew can fly it.
You’re not sure which jet to buy. We will come up with a solution for you, so you can try before you buy.
You don’t want to charter anymore, fractional ownership will not work for you, not quite ready to buy, but you need a jet available 24/7
HOW TO BUY ONE
? If you're set on owning a private jet, there are two main routes to making the purchase. If you've done your homework and know which make you want, you can approach the manufacturer directly.
? However, most jet newbies are likely to engage a professional consultant or broker to help them through what can be a lengthy and complex process.
? Qualified aircraft brokers claim to not only find and negotiate the best deal on an aircraft, they also save you time and money in the process of completing the transaction.
? A word of advice from the experts: Brokers are well educated in the process of buying and selling aircraft, which will save you time and money in the process.
WHICH TYPE TO GET
? There are three basic types of jets available: Light, medium and heavy.
? Light jets usually have a 1,000 nautical mile range and can seat up to six people. Medium jets have a 1,500-2,000 nautical mile range and can seat 8-10 passengers. Heavy jets usually have a 2,500-3,500 nautical mile range and can seat 12-16 passengers.
? Choose one based on how far you need to fly and how many people you usually travel with. Obviously, if overseas travel is will be required, the aircraft will require the longer range aircraft.
? It is also advisable to get a plane that seats more people than you intend to take with you to allow for comfort during longer haul flights.
HOW TO GET FINANCING
? There are many companies and banks that specialise in aircraft financing. Like most loans, the company or individual will have to qualify for a loan as well as provide some form of a guarantee.
? Lenders typically have a certain niche that they finance. Some will offer higher loan amounts, some will only finance newer aircraft, and in certain countries where the aircraft may be located, it could be harder to obtain financing.
? Basically, find a good broker and that person or company will be able to assist you in finding the right financing solution.
HOW TO MUCH TO EXPECT TO PAY
? The cost of the aircraft will vary depending, among other things, how large the plane is, how old it is, and its maintenance history.
? Prices have dropped significantly in the past four years as a result of the global economic slowdown - private jets are the first things to go in bad times - and many aircraft can be had for $3 million to $10 million.
? If you don’t mind a second-hand model, older used jets can be purchased for under a million dollars,
NEW OR PRE-OWNED?
With many of the Private Jet manufacturers there will be a 2-3 year wait from when you order to when your jet is delivered. This does vary and sometimes though the right aviation consultant you may be able to buy a position from someone else and get your jet delivered sooner. You can always lease a pre-owned jet while you’re waiting for your new one.
However, buying a pre-owned is also a good solution, especially if you would like a jet sooner and don’t want to spend the money for a new one.
Here are a couple of examples:
Bombardier Global 5000
New Bluebook value: $50,190,000
2008 Model: $26.3 million (47 percent of original retail)
Projected 2019 value: $19.5 million (39 percent of original retail)
Bombardier Challenger 300
New Bluebook value: $24,860,000
2008 Model: $13 million ( 48 percent of original retail)
Projected 2019 value: $10 million (40.5 percent of original retail)
OTHER COSTS TO LOOK OUT FOR
? This somewhat long list will give you an idea of the true cost of jet ownership.
? Annual insurance premium.
? Hangar Space
? Maintenance
? Salaries and benefits for crew
? Landing Fees, handling fees and even navigation fees
? Catering
? Fuel
HOW TO MANAGE THE INVESTMENT
? Professional management companies handle all aspects of owning an aircraft for the owner. They will maintain the aircraft to the manufacturer’s requirements as well as handle hiring pilots.
? Some can even offer the aircraft for charter to help offset some of the maintenance costs while the owner is not flying it.
? One downside to chartering your aircraft out is that it will put wear and tear on the aircraft and with every hour it flies it moves it closer to its next maintenance schedule.
DON’T UNDERESTIMATE THE IMPORTANCE OF THE RIGHT CREW
I have seen people in the past spend $50M on a private jet and then make the fatal mistake on going cheap with the pilots. The personality match between Chief Pilot and the owner is key. At Tyrus Wings we assist our clients in finding the right crew for their operation. A private jet is private and last thing you want is changing pilots every 6 months. Read this article I wrote a few weeks ago that will give you further insight into the pilot aspect of your own jet:
https://www.dhirubhai.net/pulse/20141203004548-4404516-are-your-pilots-safe?trk=mp-reader-card
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Fabrizio Poli is an Aviation Analyst & Managing Partner of Boutique Aviation Company Tyrus Wings. He is also an accomplished Airline Transport Pilot having flown both private Jets and for 5 different airlines. Fabrizio is also a bestselling author and inspirational speaker. You can tune in weekly to Fabrizio's business Podcast Living Outside the Cube.
Concierge
9 年Good article, I'm going to get one this weekend.
CEO at Solarwox Renewable Energy Ltd
9 年Still on the same subject, the technical issue of airports and possible landing airfields should also be considered as some aircrafts are not able to safely land in very short runways particularly in a private or rural airfield. Whereas a buyer needs to consider the luggage capacity & fuel consumption of an aircraft, a buyer needs to know how high a plane can fly to stay away from turbulent winds & how fast it can ascend to that height.
CEO at Solarwox Renewable Energy Ltd
9 年Good article Fabrizio. However, there are many more details you didn't point out. For instance, some of the newer light aircrafts have the capacity for extended nautical miles. The G450 and some midsize jets have capacity in excess of 3000 nautical miles. Also, the cost of engaging a good broker or a consultant is another point potential buyers are not often aware. Bad brokers often times side with sellers to take advantage of buyers who are apparently well off. This and many more needs closer examination by buyers.
Vice President at Elevate Creative Group
9 年I want a HondaJet ??
Education | Travels | Aviation Consultant
9 年Gr8 Work, Keep Going & Stay in touch !