When is the right time to buy a private jet?

For those exploring whole aircraft ownership, the following ideas may be a good starting point for a discussion about purchasing a private plane.

Why we fly private -- Generally, people who ride on private jets do so for convenience, to maximize productivity and save time. Other reasons include exclusivity, privacy, security and access to airports in markets not served by the airlines. Some users may choose to entertain on-board or offer up the jet to family and associates which can generate goodwill and increase influence. Others seek to escape their earthly bounds on a whim. While all good reasons to use private planes; the question we’ll look at here is: For whom is actually owning the private aircraft best?

In almost all cases, as we advance through life, our time becomes relatively more precious as demands increase. Kids grow-up and move away; grandkids are born. Things seem to happen faster and schedule efficiency takes on greater importance. Our years of productivity are not unlimited, and its essential that bread-winners in their peak earning years define a maximum productivity strategy. For certain individuals, there’s a point in life (sometime before the “golden years”) when the the time-money-energy equation is ripe for consideration of private jet ownership.

Enter the time machine. FedEx founder Fred Smith called the private plane a force multiplier. It can enhance enterprise productivity, and experience shows that principals can lead more effectively, wielding greater influence when employing this important business tool. More geographically mobile and nimble executives means better responsiveness to dynamic situations. Simply said, one can achieve more. The potential to harness opportunity unlocking value in new markets, connecting people and compressing the space-time continuum are all benefits of private aircraft ownership.

Skeptics may argue citing the old adage of Fs; i.e. If it floats or flies it’s better to rent. However, for some individuals there comes a point in life when it’s cheaper and more rewarding to own. Defining the ownership strategy is the first step to exploring this. Additionally when you own the jet, you can enjoy all the control of full ownership which is a vastly different experience to riding around on chartered or provided machines. That said, ownership should still make dollars and sense.

In general, aircraft direct-operating costs (DOCs) are about one-quarter of charter rates. So, it makes sense to own provided utilization is high enough. More than 200-300 hours per year is sufficient to make the numbers work. The potential owner should consider this while remaining mindful that the more their aircraft is flown, a deeper comparative discount to chartering will be enjoyed. Private owners are incentivized to utilize their airplane more to distribute fixed costs over a greater number of hours.

When considering a private aircraft purchase, it’s key to understand what’s driving the buyer’s interest. Whether it makes strategic sense is highly dependent on the principal’s five to ten year plan. What’s the enterprise geography? What are the goals for the business? Where is the constellation of likely users? How often will the trips go and to what destinations? What kind of planes are acceptable for the client? etc. Understanding these questions and looking strategically at the client’s position in life with respect to their vision for ownership entry and exit may help to identify if whole aircraft ownership is appropriate.

If the the answers to these questions support a further look at whole ownership, a feasibility study is the next step.

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