Buying or chartering a jet: things you should know

No longer a luxury, private jet travel has become an essential business tool. While security concerns may play a role in the decision to purchase or charter an aircraft, flexibility, predictability and timesavings are more influential factors.

Important issues to consider:

To buy or charter: Charter is almost always cheaper than ownership. However, full ownership and professional management of the plane combine to make economic sense for more than 250 hours of annual usage.

Full ownership or fractional: Fractional aircraft ownership can be a solid option for certain users such as a golf professionals whose schedule is uncertain or a smaller-city resident with no access to charter service who flies too infrequently to justify full ownership.

What jet is right for you? Analyze your potential usage, cabin size preferences, range and performance requirements to determine which plane best suits your needs.

Jet prices/costs: Corporate jets can range from $2,000,000 for a small, pre-owned aircraft to $40,000,000 for some top-of-the-line models. Hourly operating costs vary from $1,000 to $3,000 per flight hour depending upon the aircraft.

Volume purchasing offers savings on fuel, insurance and other costs: Computerized monthly operational and financial reports including expenditures (and revenues for charter clients) for current month and cumulative annual basis. Aircraft Usage Report covers department and/or authorizer, average mission profile, passenger operations and operational performance.

To offset the costs of ownership: Chartering your private jet when it is not in use is an effective way to offset costs and secure a return on your investment. For maximum efficiency, select a professional management company with a worldwide charter certificate, a diverse fleet and a good marketing track record.

Charter service: In a charter program, the management company has full responsibility for marketing, scheduling, operations and collections. The earned income accrues to the owner at a pre-determined rate.

Maintenance: Your aircraft management company should provide FAA-certified maintenance service and insist that airplanes return to home base for maintenance at trip conclusion. Use an outside vendor only for emergencies or for supplemental lift to cover major inspections or refurbishments.

Don't buy too small a airplane: Now that the cost of capital is relatively inexpensive, purchase the airplane that will actually do the mission you require. Don't shy away from buying the right airplane for your specific needs because another choice is less expensive. And, don't allow hourly operating costs to be the defining factor. If you don't buy enough airplane to meet your primary mission goal, you will constantly wonder why your expectations are met only halfway. In airplanes, you get what you pay for. No more, no less.