Private jet ownership is the ultimate sign of status and provides owners with an exceptional amount of freedom, flexibility, and control.
Full aircraft ownership is the top tier of private aviation solutions. However, there are many questions that surround the world of jet ownership. Therefore, it is important to ask questions before embarking on the ownership journey.
For example, what are the different types of ownership? How much does it cost? What actually are the benefits of ownership? How do I find the right jet to purchase? And, most importantly, should I buy a private jet?
For the purpose of this article, it will mostly focus on 100% private jet ownership, however, a brief description of fractional jet ownership will be provided.
- Types of Ownership
- What is Private Jet Whole Ownership?
- What is Fractional Jet Ownership?
- Fractional Jet Ownership vs Full Ownership
- Benefits of Whole Ownership
- Benefits of Fractional Jet Ownership
- Should You Own a Jet?
- Considerations When Purchasing
- Types of Aircraft to Own
- When Buy Over Rent?
- Private Jet Running Costs
- Finding the Right Jet
- Is Owning a Private Jet Profitable?
- Other Private Aviation Solutions
- Summary
Types of Ownership
When talking about ownership, there are two main kinds: fractional ownership and whole aircraft ownership.
While both options contain the word “ownership”, they both come with different costs, risks, and benefits.
What is Private Jet Whole Ownership?
Whole private jet ownership is when you have 100% control and possession of the aircraft.
You know who has been on the aircraft, where it has flown, the hours it has logged, along with all of its maintenance and inspection history.
Additionally, you can customize and equip the aircraft any way you wish. For example, you can choose the upholstery, cabin layout, and in-flight entertainment, to name a few. Moreover, you can choose who flies the plane and can ensure the aircraft is maintained to your own personal standards.
Generally speaking, whole private jet ownership is the most complicated way to fly by private jet. There are far more moving parts than a private jet charter, jet card, or fractional shares.
However, the benefits that come with private jet ownership make it hard to truly rival it.
What is Fractional Jet Ownership?
Fractional jet ownership is when you own part of an aircraft. This is known as a fractional jet share and can also be referred to as partial jet ownership. A typical fractional share of the aircraft to own is a half, quarter, or eighth.
The assumption is that a private jet will fly a certain number of hours per year. Therefore, if it is assumed that an aircraft will fly 400 hours in a year and, if you have a 1/2 share, you can use the aircraft for 200 hours in a year.
Fractional jet ownership does not necessarily tie you to just one aircraft (i.e. “your” aircraft). Therefore, the availability of an aircraft can be guaranteed and you can choose to fly in larger or smaller size aircraft depending on each unique mission requirement.
However, fractional ownership programs usually have a limit on lead times to book and the number of hours you can fly during peak holiday periods.
Depending on the number of flight hours per year, the upfront cost of fractional jet ownership will change. This will then impact the fractional shares available.
Fractional Jet Ownership vs Full Ownership
Choosing between having your own aircraft or just a fractional share of an aircraft is a decision that should not be taken lightly.
There are many factors to consider. Here are some key factors and questions to consider when thinking about enrolling in a fractional jet ownership program or purchasing your own aircraft.
Firstly, available capital. Buying a private jet isn’t cheap. Therefore, if you will struggle to put down a lot of money upfront or struggle with securing financing then fractional jet ownership will likely make more sense.
Next, it is important to consider your flexibility. How rigid are your plans? If you own your own aircraft you can guarantee its availability on peak days and with short lead times.
Fractional ownership doesn’t afford quite the same privileges. Most fractional ownership programs will have minimum lead time requirements, especially around major holidays.
However, on the flip side, fractional jet ownership does provide more flexibility when it comes to changing aircraft. With most programs, there won’t be just one aircraft for you. You will be able to move around the entire fleet based on mission requirements and availability.
Full aircraft ownership does, however, come with more continued costs involved. For example, the acquisition cost, monthly management fees, crew costs, training costs, maintenance, and more.
Benefits of Whole Ownership
Full ownership comes with a wealth of benefits.
Firstly, you have total control over the aircraft. You know where it has been, who has flown on it, and the maintenance history.
You can customize the aircraft however you want. You can choose the exterior paint, the upholstery, and so much more.
Additionally, you have a dedicated aircraft choice. Do you prefer a Global over a Gulfstream? Then you can hit the market looking for your perfect Global. You don’t have a seek out a fractional ownership program that has the desired aircraft. You just go right ahead and buy your chosen plane.
One of the key benefits that come with ownership is the lower flight hour cost with higher utilization. If you fly a lot, then the hourly fee will likely be lower when you own versus rent. This is especially beneficial if you spend time on a lot of international flights. This means that full ownership can be more cost effective than renting.
Moreover, private jet ownership comes with high availability with no peak days. Add in the tax benefits that come with owning a private jet, and it can become a very sensible option.
Benefits of Fractional Jet Ownership
In contrast to the full-fledged ownership of aircraft, fractional jet ownership offers many benefits that many people like. One of these is access to an entire fleet of aircraft. This makes it easy to change aircraft and ensure that one is always available. Additionally, if one aircraft is down for maintenance, you can access another aircraft in the fleet.
A key benefit of fractional jet ownership is the ease of use. All aircraft are professionally managed and maintained. As a result, there is no need to worry about scheduling conflicts or additional logistics.
Most fractional ownership programs also factor in the repositioning costs, resulting in limited direct charges. This makes it easier when flying on one way flights.
When it comes to the end of your fractional jet ownership contract, most operators will guarantee to buy back the aircraft at a fair market value. However, this value is highly dependent on current market conditions. Therefore, you still bear the risk of depreciation.
In summary, fractional jet ownership results in lower initial costs than whole ownership, along with greater ease of use. On the opposite side, few benefits of whole ownership are kept when fractionally owning an aircraft.
Should You Own a Jet?
There are many factors that will influence whether or not you should buy a private jet.
Firstly, you need to consider how many hours per year you fly. You need to sit down and plan out the typical missions that you fly over the course of a year. Generally speaking, if you fly fewer than 200 hours per year then another private aviation solution will be beneficial, namely jet cards or private charters.
Second, do you need guaranteed use of an aircraft, especially on peak days (i.e. major holidays)? Private charters, jet cards, and even fractional owners will all likely pay surcharges when demand is high. Additionally, the lead time to book will be greater around peak days. This isn’t the case with jet ownership.
Third, do you make last-minute flight plans? Yes, you can charter a private jet with a couple of hours’ notice. However, if you do this regularly, knowing that your dedicated aircraft is sitting and waiting at your local airport makes it so much easier. Moreover, if this happens around peak days, you have an unstoppable combination.
Do you also want total control over your aircraft? Choose the layout, fabrics, features, crew, and facilities. Have your preference on appearance and features. Choose the exact model and know exactly how it is treated.
And finally, status. If you can afford it and want the status that comes with being a jet owner, then that is just as valid a reason to purchase one.
Considerations When Purchasing
When purchasing a jet you need to be aware of the costs involved, along with your utilization.
No two missions are the same. Therefore, you need to plan out where and who will be flying. If you are flying to short runways then you will need an aircraft with excellent ground performance.
If you are flying lots of international flights across the Atlantic, then you need an aircraft with long-range capabilities.
You also need to consider the costs involved in ownership. Costs can be broken down into three main categories.
Firstly, the acquisition cost. This is the actual cost to do everything to purchase the aircraft. From the actual cost of the plane to the legal fees involved.
Second, the annual fixed costs. These are the costs that you need to pay to just have the aircraft sitting on the tarmac. These include costs such as crew, storage, insurance, and management fees.
Thirdly, hourly variable rates. This involves the fuel cost (along with fuel surcharges), a monthly maintenance fee, ground fees, and crew overnight fees.
Therefore, you need to keep in mind the ongoing costs to have your jet just sitting in the hangar. The cost is much more than just the occupied hourly fee.
Types of Aircraft to Own
There are hundreds of types of aircraft that you can choose from. There isn’t a single aircraft that can be applied to every situation.
You will need to pick out a specific plane that works for you. Choosing the right plane will ensure that you save money over the wrong option.
Types of aircraft that you could own include turboprops, very light jets, a light jet, midsize jets, heavy jets, and VIP airliners.
All come with their own benefits and drawbacks. However, the general rule is that the larger the aircraft, the more additional costs are involved and extra fees. Moreover, larger aircraft typically come with a greater capital cost.
When Buy Over Rent?
You should consider private jet ownership over renting a jet when any of the following is true:
- You need guaranteed use of aircraft on peak days (e.g. major holidays)
- You fly over 200 hours per year
- You want absolute control over the type of aircraft
- You make last-minute flight plans
- You change plans last minute
- You want the status
Additionally, you should consider buying a private jet over renting when you are seeking depreciation deductions and tax benefits. Moreover, most companies offering fractional shares outside North America can prove tricky. Therefore, outside North America owning your own business aircraft will likely make more sense. Some of the most popular fractional programs include NetJets and Flexjet.
However, renting a private jet makes sense when you have a low annual flight time, fly occasionally, want a simplified monthly fee, or want to avoid running expenses, such as pilot salaries.
Private Jet Running Costs
As mentioned, when it comes to running private jets there are annual fixed costs and hourly variable costs.
You need to pay annual costs no matter what. Even if you don’t fly your aircraft you still need to pay your crew, train your crew, store, and insure the aircraft.
However, variable costs are adjusted based on the flight hours your fly. Therefore, the more you fly, the more your variable costs will be. These costs include factors such as fuel, maintenance, landing fees, and handling fees.
Running costs for a private jet can range from $200,000 in annual costs and around $1,000 for a very light jet such as the Cirrus Vision Jet.
Prices can then range to around $700,000 in annual costs for a large aircraft such as the Gulfstream G650ER, with an estimated hourly cost of around $5,000 per flight hour.
Of course, this is not taking into account the depreciation in value of the aircraft that comes with use. Additionally, this does not take into account whether or not the owner is using the aircraft for charter flights when not in use.
Finding the Right Jet
Finding the right business aircraft can be a tricky and time-consuming process.
However, joining our service will provide you with all the information and tools that you require to find your perfect aircraft.
You can sort and filter through over 140 different business jets, along with the individual operating costs for each model and the acquisition cost for over 1,000 model years of private jets.
Is Owning a Private Jet Profitable?
Purchasing a private jet is not typically done with the intention of it being profitable.
Some owners may choose to charter out their aircraft when they aren’t using it. This is usually done through a management agreement with a management company.
However, this will increase the wear and tear of the aircraft, along with reducing the flexibility that you have while using it.
It is unlikely that it will result in profitable ownership, however. Therefore, most owners will charter their aircraft out in an attempt to reduce their cost of ownership.
In today’s climate (Q3 2022), private jet charters are in such high demand that regular income can be derived from them.
Additionally, almost every private jet will depreciate in value as your ownership period increases. Buying and selling for profit is unlikely. The rare exception is with brand new aircraft given it is so difficult to get a new slot allocation.
Other Private Aviation Solutions
If ownership isn’t for you then there are many other ways to fly by private jet to suit your needs.
As mentioned, shared ownership may work. Additionally, you can fly using a jet card, private jet charter, empty legs, or even buying just a seat on a private aircraft.
Summary
Owning a business aircraft is not for the faint of heart. There are many factors that you need to consider when choosing the right private aviation solution for you. Additionally, it helps if you know the number of flight hours you fly per year.
Jet ownership provides benefits that are hard to get with any other method of private air travel. These benefits extend far beyond partial ownership.
Yes, there are costs and risks involved. However, most owners don’t rush into the unknown and go straight to ownership. Most have experienced the joys and benefits of private aviation. Just like any other business deal, the benefits far outweigh the costs.
If you are looking to find the right aircraft for your next acquisition, consider signing up for our premium service here.
