Are you a frequent flyer? Do you find even airlines' first-class service more frustrating than fulfilling? You can charter a jet, but the greatest freedom comes when you own one. Before you buy, though, you should consider whether the investment is truly justified.
Depending on size, range, model, and features, a private jet can set you back anywhere from $2 million to over $100 million. Much like used cars, private jets are subject to serious depreciation. If you are looking for a bargain, second-hand jets come much cheaper.
- A private jet can cost anywhere from $2 million to over $100 million.
- Ongoing expenses may include flight crew salaries and expenses, the costs of routine maintenance and unforeseen repairs, hangar rental, and aircraft insurance.
- Alternatives include private jet charter services, partial jet ownership, and membership in a private jet club.
The Hourly Rate
The first logical question that comes to mind is: How much do you fly? Aircraft vendors will tell you that if you spend 200 hours a year in the sky, it justifies the outright purchase of a private jet. Remember, they're also trying to sell you one.
Aircraft brokers who offer fractional ownership in a plane will say it’s more like 400 to 600 hours. They, of course, are also trying to sell you something. Fractional ownership is similar to a timeshare in real estate.
An unbiased rule of thumb is that an annual flight time of at least 240 hours is required to achieve a reasonable operating cost for a private jet.
Your Travel Routine
The type of travel you do might be even more important than air hours as a factor in whether to buy a jet. If, for instance, you frequently have to schedule one-way flights, then you’ll have to pay the cost of sending the plane and its crew back.
Alternatively, if you plan to remain at a particular destination for a week or more, the pilots, crew, and plane must be accommodated for the entire period of time or sent home. In both cases, the costs may well outweigh the benefits of buying in the first place.
Regardless of where and how frequently you intend to fly, jet owners are faced with substantial ongoing expenses, beginning with routine maintenance and on-the-ground downtime.
Then there are unforeseen repairs. A blown tire can cost $2,000 to $3,000 to replace. There’s also hangarage—meaning a parking spot in a hangar—plus crew salaries and aircraft insurance. As the owner, you have to cover everything.
As a rule of thumb, you can expect to pay around $500,000 to $1 million annually in operating costs. You can find a number of nifty aircraft cost calculators online. One site even breaks down expenses involved with specific jet brands and models.
If you do decide to make a purchase, there are a number of buying consultants and aircraft management companies that can help you arrange the purchase and maintain it for you.
If the running costs combined with the initial outlay simply don’t work in your financial favor, there are several far less expensive ways to join the private jet set.
You could book a charter for a specific trip, purchase partial ownership in a jet, or buy a private flight club membership. The private flight club membership enables short-notice booking for domestic or international flights on a range of jets at set hourly rates.
Any of these options provide the custom-craft experience without the management hassle and associated costs. It pays to shop around. There are many competitors offering charter flights, fractional jet ownership, and private flight memberships.
Unless money is no object, the steep annual costs of running a jet make it a cost-effective investment only for frequent flyers with specific needs.