Are you considering purchasing a private jet? As Canada’s boutique travel solutions provider, XXX is pleased to provide you with the concrete data, facts, in-depth knowledge and expertise to help you make a fully-educated decision.
This article is our 101 on Aircraft Ownership that intends to showcase the possibilities of stepping into private jet ownership by providing you with all the insight and information we have at our discretion. With decades of experience in the private aviation industry, we will inform you about the different solutions available for aircraft ownership. From your first consideration of acquiring a private jet to finally parking your jet in the hangar, XXX can provide you with streamlined guidance throughout the whole process.
We’ll go above and beyond to support you in your endeavours.
Private Jet Ownership – A Look at the Data
Private aviation is growing worldwide, with an explosion of on-demand chartering, private flying clubs launching new memberships programs, and fractional ownership becoming popular. Still, only a few individuals who regularly fly private decide to purchase and privately own an aircraft for their exclusive use.
This is supported by the latest statistics, confirming that there are currently around 17,000 privately owned aircraft registered worldwide. The US and China are among the fastest-growing markets for private jet ownership, with the US leading the market worldwide. Canada's private aviation fleet is currently the fourth largest in the world.
It is needless to say that owning a private jet isn’t de rigueur in even the most exclusive circles. Some high-net-worth individuals and companies could afford to own a private jet or multiple aircraft and decide not to do so. Still, there is a considerable amount of our clients who proceed into aircraft ownership who make that decision consciously and often ask for our guidance through the process.
While many clients decide to continue using on-demand chartering and the pay-as-you-go plan, the scenario of sole private jet ownership can be a rewarding investment for certain individuals, organizations and companies.
The Journey of Becoming an Aircraft Owner
Most often, the people who one day become private jet owners first chose to fly private by chartering jets on-demand since the setup of the commercial first class did not serve them anymore.
The schedules, waiting times and routes of flying commercial did not suit their tight schedules and robbed them of their precious time, which is why they chose to charter.
Over and above that, the privacy, comfort, security, and independence of flying private are essential additional factors for many of our clients.
There are very few people indeed who purchase a private jet without making use of private charter services quite regularly before.
Those clients who are chartering-on demand frequently, and possess the financial resources for aircraft ownership, gradually consider exploring aircraft ownership of some sort. This is where XXX gladly assists them by providing and showcasing all the possible solutions and options for aircraft ownership. High-quality light jets are available from $3 million to $15 million, and ultra-long range jets, like a pre-owned G4 long-range jet, can be acquired from $8-80 million.
Along with the traditional option of whole ownership, there are other solutions that are a sort of compromise between whole ownership and on-demand chartering.
The Different Options of Private Jet Ownership
Owning a private jet can be accommodated through mainly three different ownership scenarios. The first scenario is that of whole ownership of a private jet, which can be seen as the traditional way of purchasing a private jet on your own or with your company and using that jet exclusively for your needs. This kind of ownership is recommended for personas with a net worth that can easily cover the running costs of a private jet. The initial purchase price and maintenance costs of a solely owned private jet add up quickly. Whole private jet ownership undoubtedly offers the most control, comfort and flexibility when it comes to owning private aircraft.
Another solution is fractional ownership which can be compared to a timeshare and offers a good compromise between value, control over the jet and costs. Though, you have to be aware that you will have less control and flexibility with this kind of ownership compared to sole ownership since you are sharing the private jet with other parties.
Lastly, there are jet cards and private flight clubs that offer on-demand access to private jets at your disposal in exchange for regular monthly rates.
We’ll take a more detailed look at the upsides and downsides of those three types of ownership scenarios below.
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Whole Ownership
Whole ownership describes purchasing a private aircraft and using that jet exclusively for yourself or the endeavours of your company or organization.
There come many benefits with sole ownership of a private jet which make it definitely worth considering, like flexibility, comfort, safety, customization of the jet and full control over flying schedules.
The significant upside of this kind of ownership is that there is only a short lead time necessary for reservations, and the owner has complete control over the jet. This is often especially appealing for companies and large organizations that don't want to compromise on efficiency, like missing urgent meetings due to adhering to commercial schedules. The inflexibility and long waiting times of flying commercial can make them forgo great opportunities. Private jet ownership allows for a maximization of spending time meaningful and efficient.
When it comes to encumbrances, one has to keep in mind that owning an aircraft requires a certain degree of management and upkeep for the staffing and maintenance of the private jet. It is usually best to have permanently employed staff, like captains, mechanics and stewards, on your payroll. Therefore, many private jet owners choose to hire a management company that employs the essential staff for their private jet.
For owners who decide to offset some of their fixed expenses by chartering out their aircraft, we recommend having at least 3-4 pilots on payroll and assigned to your jet.
Furthermore, it has to be ensured that both the captain and the aircraft fulfill the necessary requirements to fly to all the destinations of your choice. Therefore, with whole ownership, most owners decide to hire a management company to take over the management and responsibilities for the private jet. Otherwise, the sole owner would solely be responsible for all safety aspects, including insurance, crew training, compliance with regulations, and aircraft maintenance. Hiring a company for managing your private jet is, therefore, highly recommendable. XXX can assist you with managing your private jet or finding a reliable management agency to govern your aircraft, including all related responsibilities, and to take that burden away from you.
Control
When it comes to control, there is nothing that allows for more independence than whole private aircraft ownership. You will have complete control over your schedule and can use your or your team member’s time exceptionally efficiently. Furthermore, you can customize the private jet to suit your needs since you can fully personalize your jet's onboard experience and interior.
Costs
It is no secret that sole private aircraft ownership comes with a significant investment. XXX is specialized in helping you assess if the purchase of a private jet has the potential to maximize your ROI and quality of life.
A private jet can cost anywhere between $2 million to $200 million. Most importantly, there are regular and ongoing costs like aircraft maintenance, insurance, taxes, jet fuel, refurbishment and hangar costs.
Those running maintenance costs of wholly owning a private jet can be estimated at $500,000 to $1 million annually, based on approximately 300 hours of usage per year.
We suggest to many of our clients who wish to step into the whole ownership of a private jet the possibility of chartering out their aircraft to offset some of their fixed expenses. This can help increase their ROI while still having significant control over the schedule of their jet since the owner of the aircraft can decide when and how much they are comfortable chartering out their jet.
Many owners decide to charter out their jet from 50-200 hours per year since the slight limitation on the schedule is not of concern to them.
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Fractional Ownership
Fractional ownership is a solution chosen by many fliers who do not wish to commit to whole ownership.
With fractional ownership, a certain number of people collectively purchase a private jet and share a schedule for using that aircraft. We can explore pairing you with a selected small number of our other clients who also wish to purchase a private jet. The additional running costs like crew, upkeep, insurance, hangar costs etc. are shared between those parties, bringing down the overall costs significantly compared to whole ownership.
Since you will be sharing the jet's ownership with other fractional owners, this ownership scenario comes with some limitations regarding control over the private jet.
Control
There is less control with fractional ownership compared to whole ownership, but the guaranteed availability of the jet can be prearranged.
Often there are certain limits to using the shared private jet during peak travel periods, though. Still, fractional ownership allows more flexibility than flying commercial or chartering on-demand. The same applies to cancellations and rescheduling.
Depending on the type of fractional ownership, the collective owners can decide if they want to fly on their own or if they are willing to share the jet on specific routes to bring down the costs for all parties.
Costs
The upfront costs of fractional ownership are lower than for whole ownership, but they are still reasonably high. Depending on the number of fractional owners, the initial costs of the private jet purchase can be between $500,000 to several million dollars.
The regular monthly costs like maintenance fees, hangar costs, insurance, crew and ‘occupied’ hourly fees also have to be considered. They will be shared, except for the hourly fees, between the different owners.
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Jet Cards & Private Flight Club Memberships
A jet card or private flight club membership can be compared with a subscription to on-demand charter flights with slightly more flexibility and control over the aircraft.
For a monthly fee, fliers can use the private jets of a company. This type of ownership has become quite popular in recent years, especially among younger fliers who enjoy the comfort of flying private without having to invest their assets into whole or fractional ownership.
Depending on the club, it is common for jet card owners and private flight club members to share an aircraft on routes, allowing for the low monthly rates compared to the other options. Those monthly fees can vary from a few thousand dollars to more than $10,000, depending on the company, services, aircraft and the covered routes.
Control
Leading providers of jet cards and private flight clubs often promise guaranteed availability at a contracted rate. Still, the ability of the club to fly you to a place will be based on the coverage area of that provider.
Furthermore, you have to consider that there is a lead time for making use of your membership. Please be aware that even some of the most prominent companies offering jet cards can not guarantee their guaranteed availability anymore since the demand for charters has increased significantly throughout the last few years.
Usually, members have no control over the onboard experience like the interior design or the stewards. However, they can often customize the dining experience on the private jet to your preferences, with high standards. Keep in mind, though, that it is likely that you will have to share the private jet with a small number of people depending on your routes and monthly fees.
Costs
In most clubs, there will be an initial fee to be registered as a private flight club member. Those fees depend on the exclusivity, area coverage and provided services of the club. Monthly fees can differ between $1,000 to $25,000++. The same applies to jet cards.
After paying the initial membership fee, the flying will be based on “pay-as-you-fly” throughout the year.
Making the Most of a Private Jet Ownership
XXX has far-reaching experience and an exquisite network in the aviation industry that allows us to function as your aircraft ownership one-stop shop.
First and foremost, we are here to help you assess whether you should progress into jet ownership.
If you decide to go forward with acquiring a private jet, we can advise you on what kind of aircraft ownership will suit your needs best and be the ideal choice for your individual needs. With our in-depth expertise in the XXX private aviation industry, we are able to provide you with streamlined guidance through the process of stepping into aircraft ownership. We consult and guide our clients to the most suitable aircraft ownership option that increases their quality of life while providing them with their desired ROI.
In our initial comprehensive assessment, we’ll evaluate your needs and preferences and weigh the pros and cons of aircraft ownership for your individual case. Afterwards, if you decide to proceed into private jet ownership, we will guide you through the process of choosing a reputable agency for the regular monthly management of your jet. We can advise you which management company in your area will be recommendable for the operation of your aircraft, which is a crucial decision to make.
Furthermore, we are connected to an extensive network of trusted premium aircraft manufacturers who can tailor a private jet to suit your specific needs and preferences if you choose to step into whole ownership. XXX is able to guide you through the different types of jets that you might be interested in, and we can inform you about the leadtime when purchasing a jet. Currently, the lead time for receiving a brand new jet is estimated to be between 18-24 months. Alternatively, if you do not wish to wait several months for a brand new jet, XXX can assist and advise you on purchasing pre-owned aircraft.
We will be delighted to advise you on every aspect of private jet ownership and help you purchase the most suitable aircraft.
We trust this article will be the first step to consulting you on the different solutions and models available for aviation ownership.
XXX will be at your disposal whether you wish to learn more about a specific aircraft model or would like to set up a personal consultation where we can assess and consult you over your private aviation desires and needs.
No matter what kind of ownership model you’ll decide to move forward with, XXX will make sure to take you above and beyond!