21. Page 3-12
3. Program Characteristics
Private Jet Travel: Understanding the Options
Whole Aircraft Ownership
For some, buying an aircraft is the ultimate transportation solution. Except when
out of service for maintenance, the aircraft is always there to take you wherever
you want to go, whenever you want to leave. It can be painted and configured
however you like. Of course, you will need to find pilots, maintain the aircraft,
and see to the range of other requirements to keep an aircraft (or a fleet of them)
in the air.
Financial Considerations of Ownership
Not all companies, and few individuals, have the means to purchase jet aircraft.
If in such a position, however, the benefits are often indispensable. The largest
and most obvious financial consideration is the cost of aircraft acquisition. There
is no way to generalize the financing structure of an aircraft acquisition; it could
range from a relatively simple all-cash deal to the most complex, tax-considered,
lawyer-driven transaction that one could imagine. Regardless, it is a paper-
intensive, complicated process that often requires outside advisors to ensure that
regulatory, legal and insurance requirements are met.
After the aircraft is acquired, owners usually either: 1) hire an aircraft
management company to serve as an “external flight department” by providing
key services requiring aviation competence (i.e., hire and train pilots, flight
planning, aircraft scheduling, maintenance, fueling, etc.); or 2) conduct such
activities through an internal flight department. Building an internal flight
department offers the highest degree of control, but also a higher level of
complexity. Using an aircraft management company involves incurring the cost
of a “middle man”, but this will be offset to some degree by the management
company’s ability to pass through cost savings on volume purchases of fuel,
insurance, and the like.
Operational Considerations of Ownership
Aircraft ownership (especially if it is part of a larger fleet) offers a tremendous
amount of flexibility. There are no pre-set rules regarding advance notice
requirements, availability is always guaranteed (barring maintenance or crew-
related downtime), last-minute, or even enroute, travel changes are easily
accommodated, and there are no “peak days” where rules can become more
However, without access to a fleet, your flight options will be limited by the range
and capacity of your aircraft. Most buyers will choose an aircraft that meets their
“best fit” requirement, meaning that it will not be the most efficient travel option
for some trips and incapable of performing others, but will meet their needs most
of the time. Plus, when your “one-aircraft” fleet is “down” for scheduled or
unscheduled maintenance, your options revert to Charter or commercial airlines.
Buying is just the
It is always there,
but . . .
Independent Source: Deloitte Private Wealth, Private aircraft: Flying private makes sense for those with the right information (page 20)
*This website has no affiliation with Deloitte.