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Before Buying Ponder These Private Jet Thoughts

txp_fan | Feb 1, 2010 |

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All entrepreneurs need to establish business goals that go beyond dollars. Something tangible an entrepreneur can celebrate and show-off as an attainment of their success. Acquiring and affording an executive jet may be that one goal that pushes a business forward, while alerting the entrepreneur (and others) to his progress. However, one should study certain realities before acquiring that executive jet.

The cost of ownership for private executive aircraft is colossal, unconscionably so. Executive jet acquisition will total a price tag in the millions of dollars. Following that, there will be jet service expenses like pilot salaries and maintenance costs. Unlike airplanes, jets take specialized knowledge to pilot and maintain, not something a hobbyist can manage. Plus, there is still the fuel cost, hangar fees, insurance, etc. The time one is a private jet owner is often short because they realize the unrelenting expense of ownership. Once that reality sets in, the owner considers selling. This is especially true when the eventual reversal of fortunes hit a person's net worth. Superstar athletes or big time movie stars may be able to manage owning a nice light jet while money is steadily coming in. But, as the eventual dips occur the jet is the first indulgence jettisoned.

Long-term ownership is so rare that the only entities that can manage long-term costs are large Fortune 500 companies. Corporate leadership can travel in luxury because the company picks up the expenses tab. However, in the current economic climate stockholders and the press are criticizing this corporate luxury. Jet ownership is an expense that is difficult to rationalize.

Rather than owning a private jet a better option for both individual and company is fractional jet ownership. That is where one buys into a share of a private jet. However, one is not just getting a fractional ownership of one aircraft but is actually purchasing into an entire fleet of executive jets. Fractional programs provide use of their entire fleet of jets and do not limit one to the aircraft they purchased a share. This allows more flexibility of aircraft and more availability nationwide. Availability is typically completed with a five-hour advance notice within the lower 48 states. The costs involved after the share is purchased are fuel and hours in flight.

Executive jet ownership has its alternatives beyond full ownership. These alternatives should be explored to make a better fiscal argument for flying in private aircraft for both companies and individuals.