For those contemplating business aircraft ownership, Jet Tolbert says the Scheduled Airlines’ skies are certainly not your limit!
Assessing the Right Time to Enter Whole Aircraft Ownership
Is business class not cutting it anymore? Are you tired of long layovers and the occasional probing inquiry from airport security? For those who are contemplating buying a business airplane, Jet Tolbert says the Scheduled Airlines’ skies are certainly not your limit!
If you have flown with the Scheduled Airlines you have undoubtedly experienced that wish to deplane as soon as possible. If you have yet to own a business jet, but are reading this article, perhaps you have chartered a business airplane (maybe several times) and you appreciate the marked difference that flying privately makes to the quality to your travel.
Perhaps you’re now thinking about how to leave the Airlines for good. Charter trips can seem expensive and difficult to justify at times – but that’s just when you look at the actual cost per hour flown. There is no doubt that on-demand charter and fractional ownership shares are sold at a premium (and for good reason since they provide unique service).
If you can fill the seats often on your charter flights, you see cost savings over transporting the equivalent number of people business class on the Scheduled Airlines (for charter, you pay to hire the airplane whereas you pay by the seat on the Airlines). Thus charter may have been an acceptable alternative to the Airlines up to a point.
But when do you know it’s time to fully embrace whole business aircraft ownership and jump into the market to make your first purchase?
Whole aircraft ownership might seem like a lot to bite off, but there’s a point at which the numbers become financially justifiable.
For a first-time buyer there are many options that will cap your exposure to the costs of whole ownership, including balancing a lower purchase price with lower operating costs or shared ownership arrangements (which we will discuss in a subsequent article).
These options become even more attractive when you consider that with whole aircraft ownership you are wholly-empowered to determine your own schedule to fly where you want to go, when you want to go.
The Calculable Tipping Point
So how do you know which option is best for you in Business Aviation? As a rule of thumb, if your usage is limited to less than 50 hours travel per year, and you are comfortable with ‘blackout dates’ and advanced scheduling, then on-demand charter and fractional ownership might provide the lift you are seeking.
If you are sure about your usage, maybe a block charter purchase (i.e. 25 hours) is the best way to get guaranteed lift on a fleet of aircraft at a discounted charter rate. (Often a charter operator will discount their pricing in exchange for guaranteed charter usage from specific customers.)
Keep in mind you will want to vet a charter or fractional ownership provider carefully and use qualified aviation counsel to review any agreements you make. A proven track record from the provider in terms of safety, and the firm’s ability to perform as promised are paramount to a successful charter experience.
There is a break point, however, somewhere around the 100-150 hours level where charter and fractional ownership solutions become much more difficult to manage.
It’s at this point that purchasing an aircraft becomes very attractive.
Need more proof to share with your CFO and get a nod from a partner? Any reputable broker will be able to assess your charter and fractional usage and estimate your expenditures to create a pro forma under different aircraft acquisition scenarios.
When accounting for the myriad of variables, and with professional counsel to structure the ownership experience correctly, some Business Aviation users flying relatively few hours a year have found they are very satisfied transitioning to full-ownership status.
Getting it Right
For many businesses, individuals and families, what truly makes aircraft ownership worth the money and effort is the difference it brings to the new owner’s life in terms of time savings, productivity and flexibility – all vital tools to a business or entrepreneur seeking to get out ahead of the competition.
The complexities of aircraft ownership are not easily navigated without knowledgeable, professional guidance. Forming a strong relationship with the right partner can deliver the benefits of Business Aviation and the enhanced, enriching travel experience you want and deserve.
