It seems like a simple question: What’s the private jet cost to own? A million dollars? 10 million dollars? Just give me the number please.
But this question has a complicated answer: What kind of plane are you looking for? What are the REAL costs to own and maintain a private plane? When to buy? How to “sweat the asset”? What is “sweat the asset” anyway?
First you should know that full jet ownership is rarely worth considering for someone flying less than 100 hours per year, depending on the distances they travel.
I found a clear and excellent answer to all these questions in an article I’d like to share with you. It was originally published on PrivateFly.com:
Private Jet Cost to Own – One Private Plane to Go, Please
“$400k will buy you a 1979 Falcon 10 with around 12,000 hours on the clock but a brand new Gulfstream 550 might cost you upwards of $50m.
Then there are private airliners with custom made interiors which make that look like pocket change.
For most people a good first aircraft is something like a Learjet 45. It’s got 8 proper seats, a good WC, 4 hour range and strong performance. A 2001 aircraft with 4,500 hours will go for around $3m.
Check out what it’s like to fly in a new Gulfstream…
Buying a Private Jet – Consider the Other Costs of Owning a Plane
The costs can be categorized as ‘direct’, ‘variable’ and ‘fixed’. The direct and variable costs relate to the aircraft’s usage whereas the fixed costs are applicable regardless of how much the aircraft is flown and make up the most intimidating part of aircraft ownership.
Included in the fixed costs are crew salaries, aircraft management fees, maintenance, insurance and hangarage. Depreciation and interest should also be considered here.
Direct costs include expenses such as fuel and engine programs whereas the variable costs cover airport landing and handling charges, crew travel and subsistence etc. If we use the Learjet 45 as an example an owner flying 200 hours per year should expect to pay around £500k p.a.
How can I ‘sweat’ the asset?
In order to achieve an income on the aircraft it needs to be chartered by third parties when it is not utilized by the owner. To do this it needs to be placed on an AOC (Aircraft Operator’s Certificate) a service supplied by an aircraft management company.
These companies will also provide crew etc. In order to go on an AOC the aircraft needs to be EASA (European Aviation Safety Agency) and EU OPS compliant – regulations set by the Civil Aviation Authority to ensure safety and quality standards.
Not all aircraft are automatically compliant, for example aircraft with a US registration (N) are rarely compliant with EASA and specific upgrades/modifications are normally required which can be costly.
A typical charter rate for the Learjet 45 in the UK is around £2,200 per hour.
This means our owner flying 200 hours per year himself would have to achieve around 550 charter hours to cover the operating costs of the aircraft and pay for his own flying – ambitious but possible! (Source: PrivateFly.com)
Is Now a Good Time to Buy a Private Jet?
Actually, now is the best time to shop for your private plane. Plane values have dropped dramatically in recent years.
You can also consider fractional ownership, like the one offered by market leaders NetJets, but it’s probably the most expensive way to travel in a private aircraft.
Another option is of course renting a private plane. You can find out more about private jet rental rates in these articles:
- 8 Fascinating Facts about Private Jets and Private Jet Cost
- Added to Ski Trip Checklist: Private Jet Rental
- 3 Simple Ways to Get the Lowest Private Jet Cost per Person
- 5 Smart Things to Do When You Hire a Private Jet
- Private Jet Hire Cost – How to Estimate a Private Flight Rental Cost
- Private Jet Cost to Own – How Much Does it Cost to Buy a Private Jet?
- Executive Jet – Can Chartering a Private Jet Grow Your Business?
- Private Jet Rental – The Advantages for Business Executives
- Types of Private Jets – How to Choose the Best Aircraft Type for Your Trip
- Private Jet Cost – How to Charter a Private Jet From Anywhwere (And How Much Will it Cost?)
- Add to Bucket List: Private Jet to Las Vegas!
- What Are the Real Costs of Private Jet Ownership?
Marriage Proposal on Private Plane