What You Should Know About the Cost of Buying and Operating a Private Jet
Private jet aircraft ownership offers unparalleled levels of flexibility, luxury and time management compared to travel by commercial means. As is the case with private jet charters, it affords the individual or organization opportunities to set their own agendas and fulfill them on their own terms without having to conform to airline schedules or be subjected to delays. As well, the convenience of being able to operate from smaller local airports cannot be overstated.
There's no question that the overhead costs associated with buying, operating and maintaining a private jet can be high. However, it can be a wise investment for those in need of frequent global access with little or no warning.
There are many cost factors to take into consideration when considering a jet purchase, and we've outlined the major ones for you.
When contemplating an aircraft purchase, it's important to note the varying categories of private jets available on the market. According to Business Aviation, private jets are generally broken down into five main categories: super light, light, medium, super medium and heavy.
It can be a challenge identifying the type that fits your needs. The category of aircraft you choose will depend largely on the intended destinations you will need to have access to as well as the passenger carrying capacity. Aircraft ranges typically vary from 2,000 km to 11,500 km, and they will hold anywhere from four to 19 passengers. However, there are varying capital and operating costs among aircraft types, as we will see.
Buying an aircraft
There are usually two methods of acquiring a private jet aircraft: buying and leasing. Similar to automobile ownership, purchasing a jet outright gives the owner full control of the asset. Leasing, on the other hand, means that the aircraft is in effect owned by the financing company.
Aircraft consultants offer services related to determining the best fit for your needs. They will work with you to take stock of your overall travel requirements. Factors such as budget, travel frequency, required destinations and the number of travelers who need to be accommodated will be thoroughly examined. Recommendations would thereafter be made based on the prospective owner's needs. Consulting fees usually start at around $10,000.00.
Typically, those looking to purchase a jet would also engage the services of a broker. It's a complicated process to source out, negotiate, purchase and register a private jet aircraft, and a broker would usually handle many of these tasks. Aircraft brokers generally charge a fee of between 2% and 4% of the total purchase price. And their services can be invaluable to the process.
With or without the help of a broker, jet aircraft can either be purchased directly from the manufacturer or acquired on the resale market. As you can imagine, the cost of purchasing a jet will depend greatly on a host of factors.
It can be difficult to get accurate pricing for private aircraft. Manufacturers, much like automakers, have their "list prices" and then their negotiated discounts. Additionally, the resale market tends to be closed to non-brokers, although it is possible to find private sales online. However, there is enough public data available to draw a relative comparison of prices.
Prices for a light corporate jet will usually start at between $2 million and $3 million for an entry-level aircraft such as the Cessna Citation. The peak for private jets is around $50 million for a heavy jet. However, large business jets can retail for upwards of $100 million.
The purchase price itself represents the first capital cost. Once an aircraft has been acquired, the operating costs can be effectively split into two types: fixed and variable costs.
Fixed costs refer to the unchanging costs associated with owning and storing a jet aircraft. These include crew costs, insurance, hangar storage and miscellaneous expenses.
Aircraft broker Daniel Kearns writes that the annual fixed costs of operating a Gulfstream G650 aircraft total approximately $444,630.80. He breaks it down as follows:
"Annual Fixed Costs:
Crew Training $69,380.80
Aircraft Miscellaneous $28,500.00
Total Fixed Costs: $444,630.80"
While these cost estimates will differ based on the type of aircraft, they serve as a useful reference point for yearly fees incurred before the plane ever leaves the ground. Conversely, those who engage private jet charters instead of ownership would effectively be immune from a large percentage of these costs.
Once the purchase has been made and a private jet has been acquired, and after the fixed costs have been assessed, the focus shifts to the myriad variable costs associated with operating the aircraft. Fuel and maintenance costs alone will account for the large majority of these fees.
Costs to operate aircraft will, of course, vary by make and model. According to a 2015 survey of hourly operating costs of 45 private jets by the Aircraft Owners and Pilots Association, operational costs have an enormous variance. They found that the least-expensive jet to operate on an hourly basis is the four-seat Cirrus Vision SF50 at $661.53. By comparison, the 18-seat Gulfstream G650 costs an estimated $4,843.16 per hour. It would, therefore, be safe to conclude that the average cost per hour for light to medium-size jets would fall within the $1,000 to $2,000 range.
As we've seen, there are many costs and fees associated with private jet ownership. While there can be no doubt as to the benefits of owning your own jet, from the ability to travel in luxurious comfort to the flexibility they afford, buying a jet can be an onerous process.
However, it doesn't have to be. FlightPath has all the tools and expertise you need at your disposal to help make your aircraft purchase a pleasant and worry-free experience. Our experts are available to handle all aspects of the buying process. From customized consulting with you on your needs and providing brokerage services to handling negotiations and acquisitions, we're ready to assist you.
So whether you're looking for outstanding private jet charters, or want to purchase your own aircraft, we're standing by. Contact us today and let us help you to take flight.