The number of private jet service providers is estimated to increase by 4-7% over the next 12 quarters. Consequently, the customer base is expected to increase by 12-19% over the same period.
As more flyers opt for private aviation services, those who have used private services in the past work towards cultivating a relationship with their previous service provider. If you’re planning on buying private jets for your aviation business, remember to adjust your customer acquisition dynamics to help you remain competitive.
7 Facts to Know Before Buying a Private Jet
A private jet is an expensive investment. Are they worth it? If you plan on buying private jets, know these 7 facts and get a valuation first.
1. Define Your Typical Passenger
Before agreeing to buy a private jet, you need to ask yourself who will be boarding your aircraft. To make it easy for you, ask yourself the following questions;
- Will you be using the jet to support partners?
- What is the largest group of people who will be boarding the jet?
- Will you at any time require increasing the number of the group to include sales representatives or company executives?
The answers to these questions will guide you when choosing the right size of your private jet. It’s also important that you consider the cabin size since some cabins look tinier than others. Buying a jet with larger cabins ensures that your jet can accommodate passengers of all sizes.
If you are unsure of what jet size you should buy, consider consulting with private commercial consultants.
2. Have a Realistic Budget
Buying a jet is an expensive venture, and you need to consider all the costs involved, not only the buying price, before investing. How often do you fly and does your flying habits justify investing in all those millions?
According to aviation experts, if you fly a minimum of 350-400 hours a year, then buying a private jet is worth it. If your flying habits are below these rates, then the cost of owning a private jet outweighs the benefits. In this case, it’s wise to opt for other flying options.
However, you might find that even though you don’t reach those hours per year, you are always accompanied by associates during your flights. Since commercial flights charge per seat, you may find that paying for those trips costs you more than owning a jet.
3. Are There Any Hidden Costs?
The purchase price of your jet is just the beginning of the expenses. When planning your budget, you need to take into account other expenses such as insurance, fuel cost, pilots, and catering services.
Roughly, all those other costs range anywhere between $100,000 and $200,000 per year. Consider seeking help from an aircraft management company to help you with the management of your jet.
4. The Distance of Your Average Business Trips
It’s important to assess the type of distance you’ll be using your private plane before making up your mind on the right jet. If most of your trips are with the US, then there’s no need to invest in a jet with a flying range of 6,000 kilometers and above. Even if you’ll make occasional trips overseas, it’s possible to reach London without the need to refuel.
In consideration of this fact, you need a jet that’s relative to your needs. For instance, if 10% of your trips are longer than 6,000km, then your suitable jet should have a flying range of 9,000-12,000 kilometers.
5. Should You Buy a New or Used Jet?
Many first time buyers find it hard to choose between buying a new and old jet though both choices have their pros and cons.
Many aviation experts will agree that new jets are better in terms of maintenance, fueling, speed, comfort, and security than previous models. Another major benefit of new jets is that they’re quite versatile in terms of features. For instance, they use synthetic vision technology, which allows pilots to have the same visibility level at night as they do during the day.
Used jets, on the other hand, are better since their depreciation rate is slower than that of other auto assets. Although it will lose value over time, a jet has a longer lifespan of about 50 years. This means that a 10-year-old aircraft will be in good performing shape despite significant depreciation.
When deciding between a new and used jet, take into account the warranty on the plane. With a new aircraft, you get to enjoy full warranty which is unlikely with a used jet. Given that aircraft parts and repairs can be costly, it can give you peace of mind knowing that you have a full warranty for your jet.
6. Do I Consider Allowing My Jet to be Chartered?
Allowing your private jet for chartering may help you compensate some of the costs of your jet. Ask yourself whether you’re ready to make such a move and what kind of expectations you have in terms of profits.
It’s important to note that in the chartering business, some seasons are better than others. Also, as your plane ages, it’s likely to affect the number of trips it takes. Once you factor these issues, you’ll be in a position to make an informed decision on the best a jet to buy.
7. Advantages of Buying Private Jets
Before deciding on whether to buy a private jet or not, you need to ask yourself how you’re going to benefit by owning one. Some things you’ll enjoy about owning a private jet include;
You Have Access to Different Cities
With a private jet, you can visit cities around the world that don’t have scheduled commercial flights. Additionally, you can visit three cities within the US in a day and still make it home in time for dinner, something highly unlikely when using commercial flights.
Your Destination Gets Closer
Unlike commercial airplanes, private jets have access to thousands of airports only accessible to private aircraft. This means you can land closer to your destination when on a private plane than when using the commercial airplane.
A private jet allows you to give short notice for any changes, define your flying schedule, and arrive in small terminal a few minutes before departure. This is unlike commercial flights that are strict about arrival times and highly inconvenience in case there’s a strike.
Always Do a Valuation before Buying a Jet
As you may already know, buying private jets is an expensive venture, and you need to be sure that you get the value for your money. To avoid any surprise costs, be sure to ask for an in-depth inspection of the jet before making a purchase.
If you’re in the aviation business and looking for an appraisal, valuations, and litigation consulting services, don’t hesitate to contact us.