The Essentials of Buying a Jet
Although purchasing a private plane is a sizable financial commitment, InsiJets is here to facilitate the acquisition and subsequent possession of the aircraft. Our Acquisitions & Sales team will become your closest, trusted advisor and guide you through purchasing a private jet, taking into account all aspects of ownership, including asset management, financial planning, and tax implications. Insijets ensures that you clearly understand the costs and operations involved in owning a private jet while providing strategies to help offset those expenses.
The benefits of acquiring a private jet
Whilst there are countless benefits to purchasing a private aircraft, InsiJets highlights some key privileges.
- Luxury of ease: Owning a private jet provides the ultimate experience in comfort and convenience when traveling. Having direct access to a private aircraft provides an entirely unique journey when traveling, becoming your home in the sky while ensuring the most luxurious experience.
- Ultimate journey, every time: There is nothing comparable to the luxury of consistency. When you own a private jet, you can depend on your crew to meet your needs each and every time. Having the ability to fly with the same loyal pilots offers an experience not found in any other type of aviation.
- Tailored for you: A certain freedom is associated with owning your own aircraft, as you can design the interiors and customize the exteriors as you see fit. From a platinum paint job to a marble bathroom and velvet seats, the choice is yours.
- Sharing cost: A bonus of owning a private jet means you can offset the ownership cost by chartering it. For example, an owner uses their private jet 180 hours a year and charters it for 320 hours a year. The estimated revenue per sold charter hour of a Phenom 300 private jet with Insijets is $4500 (subject to the agreed sale price with the operator). Minus the variable costs per hour at approximately $2808, this is equal to a profit per hour of $1692, which comes to a yearly profit for sold hours of $541,591, which can be used to cover fixed costs.
The hurdles to acquiring a private jet
Despite the many benefits, there are also some hurdles to owning a private jet that you should consider.
- Initial Investment and Operational Cost: The cost of investment and operation can be a significant obstacle. Private jets can range in price from $3 million to $90 million, depending on whether they are new or used, and the cost of ownership per year can hover around $1.5 million (depreciation included). Variable costs depend on the number of hours operated and miles traveled, and a typical owner could anticipate $800,000 in variable costs when flying 400 or more hours per year. Maintenance, crew expenses, catering, parts, and landing/parking fees contribute to variable costs.
- Managing the Staff: Hiring and managing flight staff, as well as other fixed costs, can also be a significant barrier to owning a private jet. The cost of a private jet includes pilot salaries (from $60,000 to $150,000 or more per pilot plus benefits), recurrent training (from $30,000 to $100,000 annually), insurance ($30,000 or more), renting a hangar ($30,000), and a wide range of other fixed costs such as refurbishing, recurrent pilot training, computer maintenance, maintenance, and navigation chart service.
- Overseeing Travel Schedule: Another challenge to owning a private jet is managing flight schedules. Each aircraft owner’s needs are different, but there’s an art to finding the right balance between retaining a private jet for personal use and chartering it out for additional income. Ensuring that the schedules of owners, pilots, and passengers are in sync can be difficult if an expert team like an aviation management team does not manage it.
- Fuel Costs: Fuel costs are a significant expense for private jet owners. Fuel efficiency should be a factor when choosing an aircraft, as fuel costs can range from $400,000 to $900,000 annually, depending on usage. For example, with a Phenom 300 private jet, fuel costs approximately $1120 per hour based on usage of 400 hours per year.
What to consider when acquiring a private jet
If you are considering purchasing a private jet, it is important to be prepared and take the right steps to ensure a successful and worthwhile investment. Here are some of the critical aspects to keep in mind during your private aircraft acquisition.
SELECT A TRUSTED AIRCRAFT ACQUISITIONS EXPERT
Just like buying a house or other real estate, working with experts can save you time, money, and stress. Private aviation advisors are experts in identifying the right aircraft for your needs and can guide you through the complex process of purchasing a private jet. The correct partner can also help you understand tax implications, contracts, and technical subjects related to acquiring a private aircraft. Selecting the best partner who can give you confidence that you are making the right choice is important.
DECIDING YOUR BUDGET
When deciding your budget, it is vital to consider the upfront cost of purchasing the aircraft and the multiple expenses associated with aircraft ownership. An expert aviation advisor can help you determine what aircraft will work within your budget and help plan for offsetting ownership costs through ventures such as chartering or fractional ownership, for example. They can also assist you in selecting the best management company or help manage the private jet with a dedicated in-house office.
CHOOSING BETWEEN NEW AND PRE-OWNED PRIVATE JETS
Choosing between a new and pre-owned aircraft depends on your preferences and budget. While a new private jet comes with the latest state-of-the-art technologies, design and accessibility, it also has a higher upfront cost. On the other hand, a pre-owned aircraft offers the same capability as a new one but with a lower upfront cost and slower depreciation. A trustworthy partner can help you identify and inspect used private jets to find the best fit for your unique needs.
PRIVATE JET MATCHING ASSESSMENT
Consult with an advisor about your typical profile and preferences for travel to narrow down your search to a list of aircraft makes and models that fit your needs. An advisor should provide a detailed list of the features and benefits of every category of private jet as well as their typical operating costs. They should seek to find you an aircraft that fulfills all of your unique needs and requirements, as well as your budget.
PRE-PURCHASE TECHNICAL INSPECTIONS
Before finalizing any purchase, our team ensures all pre-purchase technical inspections are cleared. We first schedule an initial inspection with an engineer, who checks all maintenance and service records, as a damaged aircraft can be repaired, but knowing what type of issues and damage has taken place and how it was repaired is critical.
Once the first technical inspection has been completed, another formal technical inspection focusing on the engines and overall condition of the aircraft takes place. This can be carried out by an unbiased third party suggested by Insijets at a certified facility.
UNBIASED ASSESSMENTS
During the second inspection, the total time on the airframe, the total time on the engines and the amount of time passed since any major overhauls are verified. If any major overhauls have taken place, the details come to light during the inspection to determine if they might affect the safety or performance of the aircraft and the effect in the eventual purchase. In addition, a complete listing of any extra installed equipment, such as engine monitors, strobes, oxygen, special performance-enhancing systems, seating and other kits that may impact on the aircraft’s safety and performance, is made. InsiJets provides a full technical report after both inspections for further reference.
VARIOUS AVIONICS PROGRAMS
During the technical inspections, a full listing of the avionics according to make and model number and when they were installed is also recorded, mainly for safety and regulatory requirements. While it may not seem essential at first glance, avionics (a combination of aviation and electronics) are the electronic systems used on aircraft. Avionic systems include communications, navigation, the display and management of multiple systems, and the hundreds of systems fitted to aircraft to perform individual functions.
There are several benefits to having different avionics programs in place, such as aircraft maintenance software. Not only is it user-friendly, but it also makes tasks such as keeping maintenance records, scheduling, and rescheduling flights and overseeing inventories easier and verifies all information listed during the technical inspections. Some avionic programs also help maintain flight crew and staff payrolls and additional reports and flight data.
AIRCRAFT MANAGEMENT & EARNING REVENUE
One of the major shortcomings for the client to open their own office of skilled aviation professionals, pilots, to manage and also sub–charter the aircraft is that it is a costly and complex endeavor. Therefore, employing an aircraft management company to help manage your aircraft can be highly beneficial when purchasing a private aircraft. With extensive experience managing various types of aircraft and private jets, the right aircraft management company can help reduce costs associated with maintenance, fuel, and hangar fees.
Another advantage of working with a management company during the purchase of a private jet is that it allows for a clear understanding of maintenance and operation costs. A management company can schedule and manage all pre-purchase inspections, ensuring the well-being of your newly purchased jet. InsiJets will select the best suitable management company on your behalf and negotiate the best deal for you, helping streamline your purchasing process, prevent unnecessary costs and the future management of your new aircraft.
PEACE OF MIND
With InsiJets’ Acquisitions & Sales teams, owners have a trusted partner for purchasing, operating, maintaining, and potentially selling their aircraft. With the right advisors from InsiJets in place, you can make a confident and informed decision about your private aircraft purchase.
With the right advisors from InsiJets in place, you can make a confident and informed decision about your private aircraft purchase.
