Navigating the Ups and Downs of Private Jet Travel

Gone are the days when private jet travel was only available to those who could afford to purchase, staff, and maintain a private jet. Today, people who want the access and exclusivity of private jet travel have a wide menu of options with varying degrees of ownership — or without ownership at all.

Our clients often ask us questions about private jet travel, so we have built a framework matching their goals with the options available. For some, whole aircraft ownership can be a logical move; for others, a lesser commitment may serve perfectly well. It’s important to evaluate the compatibility of each choice with your personal needs and analyze the financial implications of such a large decision.

Why Private?

Private jet use has soared, if you will, since the pandemic. In 2022, worldwide private air travel increased 14 percent over pre-pandemic levels in 2019.[1]As the virus began to spread, flying private was a way to avoid crowded airports and flights, and the subsequent shutdown of commercial air traffic made private jet use attractive to others who had not considered it before. Every year, online magazine Business Jet Traveler conducts a Reader’s Choice Survey. In 2022, 13% of 1300 surveyed responded that the pandemic provided the impetus for beginning to fly privately – though more than two-thirds of the respondents (68%) pointed to a change in their financial situation.[2] Private aviation is appealing for reasons other than just health. In 2020, readers of Business Jet Traveler cited saving time, access to airports, and avoiding COVID-19 as the top three reasons for utilizing private jets.  (Figure 1)[3]– avoiding COVID-19 was the fourth.  

Source: Business Jet Traveler

Barriers to Full Ownership

The high cost of investment and operation, fixed costs, and managing flight schedules can be significant barriers to full ownership. The initial, up-front purchase of a private jet, depending on whether the aircraft is new or used and what model you chose, can range from $3 million to $90 million and ongoing fixed annual costs can be anywhere from $50,000 per year for a smaller jet to over $500,000 per year for larger, long-range jets. Here, we define fixed costs as expenses calculated monthly or annually, including pilot salaries and training, an aircraft manager, hangar fees, and insurance. We define variable costs as expenses associated with the operation of the jet and calculated by the hour. Variable costs include items such as fuel, maintenance, inspections, engine programs, crew hotels and meals, landing fees, parking, etc. These costs typically range from $1,000 per hour on a small jet to over $10,000 per hour for larger, long-range jets. For example, 400 hours of operation, or 34 hours per month, could cost an additional $400,000-$4,000,000 per year.[4]

Downtime for your jet can also be costly. There is a strict system for aircraft to be properly maintained, repaired, overhauled, and inspected set by the Federal Aviation Administration. If you miss an oil change in your car, you may break down on the side of the road. If you miss a maintenance check on your aircraft…it can be quite a bit more serious. Even for routine care, the average aircraft undergoes maintenance for sixty days per year.

Alternative Ownership Options

Some elect to partake in shared or fractional ownership to mitigate some of the costs associated with full ownership.

Shared Ownership allows multiple individuals or entities to share in the ownership of an aircraft via a formal agreement. Each joint owner is responsible for paying a percentage of fixed ownership costs, specified in the agreement, and individually covering their direct operating costs.

Fractional Ownership assumes one aircraft will be occupied 800 hours per year. Then it sells fractions of those annual operating hours to multiple owners – typically beginning at one-sixteenth of 800 hours, or 50 hours per year. A management company assumes all the responsibilities of crewing, maintenance, hangaring, insurance, and administrative costs. There are additional options for people who already own a plane.

Non-Ownership Options

There are several options that offer the exclusivity and access of private jet travel without full ownership.

Lease allows users to make a fixed-rate monthly lease payment providing access to multiple aircraft types and sizes, resulting in a multi-year commitment without an initial capital investment.

Jet Cards allow users to pre-purchase flight hours and lock-in rates for a set period, and members spend down their deposit as they fly.

Jet Membership Programs offer users access to the entire fleet owned by a vendor so that they can choose which aircraft they need per trip. Memberships are typically available in one to five-year terms.

Charter Flights allow travelers to hire a plane and pilot from the operator for exclusive use, for a specific, one-time flight. It is likely that you will be on a different plane each time with a different crew.

Which Option is Right for You?

When considering private aviation options, there are several factors to consider and questions you should ask yourself to determine the best option for you and your needs. Another thing to note, these options aren’t always mutually exclusive of one another. For jet owners (full or shared), a membership program or jet card can be advantageous to supplement ownership while the aircraft is down for maintenance, when additional cabin space is required, or when the flight range is more than a privately-owned plane can manage.

Choosing the right private aviation option may seem overwhelming. Wheels Up, a large private jet company offering membership and charter options, had hired attorneys for restructuring advice at the time of writing. If Wheels Up goes bankrupt, individuals with unspent funds likely won’t get their money back. It’s a good reminder to partner with a financially viable company and not pre-pay too much.

If you have questions about the viability of a company offering private jet services, or simply seek custom private aviation experiences, one of our relationship managers would be happy to help you identify the best solution to satisfy your needs.

[1] Private Jet Travel Rose 10 Percent in 2022, Business Traveler  

[2] 2022 Annual Reader’s Choice Survey, Business Jet Traveler

[3] 2020 Annual Reader’s Choice Survey, Business Jet Traveler

[4] Private Jet Ownership Cost Estimates, Executive Fliteways

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