AvBuyer: What are your options for private jet travel?
Just as there are various classes of executive jets to meet different passengers’ demands, so there are several ways of funding your flying requirements. London Executive Aviation (LEA) chief executive, Patrick Margetson-Rushmore, explains the options.
The simplest method of using a business jet is the straightforward ad hoc air charter. This is exactly what it sounds like – a charter arranged perhaps as a ‘one-off’, or on an occasional basis. As we say: ‘Phone it, book it, pay it, fly it and forget it.’ It’s that easy.
However, if you know that your company is going to be undertaking a certain amount of flying over a period of time, a ‘block hours’ or jet card arrangement may be a better option.
With this, you buy a ‘block’ of flying hours – say 25. You make a single, upfront payment and by way of incentive, you get a discount on the normal hourly flying rate. An added benefit is that all your details are stored on file, so the process of re-booking in the future becomes a case of a two-minute phone call.
A reputable private jet operator should be able to offer you a choice of aircraft – your 25 hours shouldn’t tie you to just a single type. If your circumstances change you should be able to use a different aircraft from the fleet and you know in advance what your cost will be – either more or less than the type on which you initially flew.
One disadvantage of block hours is that some companies say you have to use them within a certain time, or lose them. This is a policy that we frown upon and we advise people to check carefully in advance when evaluating alternatives.
The next step up is fractional jet ownership, which is a bit like buying a share in a racehorse. In exchange for quite a sizeable amount of money you typically receive one-eighth or one-sixteenth of an executive jet that is available to you whenever you need it. (You won’t necessarily be flying in ‘your’ jet, but in a particular category of aircraft.) As well as the upfront equity sum you also pay a management rate and a fee every time you fly. Overall, this usually proves quite an expensive way to fly, so you need to carefully analyse your needs, as you will typically be committed for five years. Fractional is most likely to make financial and practical sense for people who regularly make one-way flights from different departure points – for example, if you are likely to phone up and say, “I’m going to be in Milan next Friday and need to go to Frankfurt”, fractional can be an effective solution; for others, however, the decision can sometime be more about prestige, which they come to regret as the bills mount up.
The other potential disadvantage of a fractional share is that your options can be limited when you want to get out. If you decide you no longer want the aircraft, you will usually find that your only option is to sell your share back to the fractional company, which clearly gives them an advantage when it comes to agreeing terms. This is another point worth discussing at the outset before committing to a share.
The ultimate option is to buy your own aircraft. Buying a business jet is not cheap, but prices can be very competitive. A Cessna Citation Excel, for example, which is the world’s most widely-used business jet and can carry up to nine passengers some 2,000 miles, can be bought today for as low as $3-4 million. The Embraer Legacy 600, with its slightly larger cabin size, can be purchased for as low as $6 million.
To offset the costs of ownership, most aircraft owners also place their aircraft with a charter operator. The operator not only takes care of all the aircraft management issues, such as crewing, fuel purchasing and hangarage, but, when the aircraft isn’t in use by the owner, the operator can charter it out to third parties to provide a useful source of additional revenue.
The options for private jet travel are therefore broader than ever before, which helps to explain its rapidly growing popularity. If you need to make the most of your time there is a way to access private jets for – almost – any budget.
Published in AvBuyer, 7th May 2015.
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