How to Own a Private Jet – AIN

hello everyone well in a previous video we talked about how you can take your first steps to enjoying the comfort and convenience of flying in private aircraft well if you tried chartering flights or use jet cards or membership programs you may have got a taste for the high life and now possibly you're ready to consider owning your own aircraft or perhaps just part of one so I'm back here today with my colleague Jennifer English who is the editorial director of business jet traveler magazine she and a team have the inside track on how you can make the right move into aircraft ownership Jen welcome back and buying your own aircraft seems like a massive leap for someone who's never done more than just writing as a passenger so what's a good place to start for companies or individuals you know how do you know when you're ready to do this hi Charlie and then usually when you're at the point where you're flying 150 hours a year 200 hours a year and you're you know that you're gonna be committed to it for the next year or two then you really want to start thinking about ownership in some capacity and that can be through a fractional share or that can be through full ownership right I see now you mentioned fractional ownership it sort of sounds a bit like timeshare but I know it's more sophisticated than that we roughly speaking how does fractional ownership work fractional ownership means that you actually own a portion of a plane so you can have a quarter share a half share or a full share and generally the shares are based on flying approximately 800 hours per year so you can kind of do the math that way you can get a quarter share let's say in a smaller aircraft like a phenom but depending on what company are with you can then have also have access to the rest of the aircraft in the fleet of the company so for example NetJets which is a huge company than most people are familiar with they have an enormous fleet and so that gives you a much wider access whereas smaller fractional share providers such as plane sends their fleet is only Pilatus Aircraft so you would only have access to Pilates right good points so let's say hypothetically the the math works that they figure one aircraft would fly up to 800 hours per year so logically if you buy a quarter share that gives you 200 hours I guess but the key point is that you don't you're not literally having to fly the 200 hours in that one specific aircraft do you get you can use those hours on equivalent aircraft across the fleet did I get that right is that kind of yeah right fractional ownership it's interesting because from a cost standpoint is not necessarily more economical than even owning an aircraft outright yourself but what you get with a fractional share is you have another company who's handling all of the details of full ownership including managing the aircraft getting the pilots and staffing it doing all the maintenance all the cleaning everything is handled and so for somebody who really values consistency and a certain level of product and they want the same aircraft every single time that they fly and you just want the assurances and not have a deal with any headaches it's a great option but we always recommend with especially with fractional well with anything but especially with fractional shares you really should get an attorney who understands the programs there's two that we recommend to our wonderful one is fractional law the other one is share craft solutions and those firms really know the ins and outs of fractional and they can give you great advice because you really have to think about fractional share as if you are an owner and if you're not gonna be committed for about five years it doesn't really make sense it won't pay off because you have to look into all of the financial repercussions and tax repercussions because it still is like owning an asset that will be depreciating over time so you have to know the commitment that you're getting into that's a good point so in a way fractional ownership it spares you all this at an itty gritty worry of how on earth you'd hire pilots and actually manage an aircraft but you stress there it's a it's a big serious financial commitment you know and when you sign on that dotted line you're signing up to all sorts of terms and conditions you can't just a month later decide oh this isn't for me you know off I go yeah I mean if you think even after two years if you try to get out you'll lose major amounts of that asset so that's why it really would pay to get a consultant to help you the reason some people choose fractional share is that depending on what your how large of a profile you want to have or have how much you value your privacy especially large corporations if you are flying in a fractional share aircraft st. NetJets it is almost impossible to track the person who is in that aircraft flying because if you're tracking somebody based on their tail number it's gonna be an eptas tail number and we've heard stories in the past of companies snooping on other companies they'll figure out what their flight pattern is in their private jet and then they see that they're doing a deal you know in Europe and people have sort of played the market that way so that's complete peace of mind if you're in a fractional share because nobody can trace you right so it's a very high standard of service but it's sort of it's efficiently generic that nobody can really tie that flight to you yeah nobody can identify because you know you can still type in somebody's tail number and pretty much figure out who that is and I know that's a concern for some CEOs and high-profile individuals yes good point now I hear that some people you know that their travel needs are so sophisticated that they actually have sort of combinations of you know they might have a fractional share or two and then they might also have a jet card I mean I guess that's a pretty sophisticated consumer who's really looking at his or her travel needs and and shopping the market for what fits it best is that right yes that is right I think with fractional what is recommended is to start small if you start in a half share in a large aircraft and then you find that you're not using it you're locked into that to owning half of that aircraft but if you start with a small fractional share you can always add on you can always upgrade you can also buy a block of charter from another company and use that on the side some people even own their aircraft outright and then also will have a quarter share in an aircraft and a fractional program that they use when the aircraft that they own is under maintenance or out of service for some reason or if they just want the flexibility of always being able to get in an aircraft and go where they have to go or send somebody else and their company or someone in their family and that way you're never grounded yeah good point and I want to pick up on that point about being assured of getting a certain type of aircraft in a minute because you know I was looking at the sort of equivalent hourly rates the fractional ownership by comparison with what you can get in the open charter market and the fractional flight our rate seemed kind of high to me but I guess there are extra benefits such as you're only paying for the actual occupied hours and I guess you have certain assurances about availability of the fleet is that is that right yes that's absolutely right people who have fractional shares they're not doing it because they're saving money they're doing it because they value the consistency of the product they want to be able to get the aircraft that they want when they want it on you know in a short period of time they want a very consistent level of service and they're willing to pay a premium for it if that's not you usually just charter yeah good point and of course there are some alternatives to fractional ownership beyond charter for example I've looked at companies like Pfister jet and they have all sorts of programs where they're you know they're packaging up hours they even let you lease a share in an aircraft as I understand it and you know I guess as you evaluate those you have to consider all sorts of other factors like you know tax implications and your you know your business situation but it just shows you what variety there is in the market yeah that's right and I'm leasing is something that is it's interesting because people are doing that and sometimes it is so that you don't have an asset on the books but also maybe you don't want to be super locked in for five to ten years with a fractional share and you also don't want to own your own aircraft so leasing is worth looking into but again that's why it's very important to have really consult with a financial adviser and an attorney and figure out exactly what the right solution is for you yeah that's a good point you can imagine that scenario where somebody signed up to a fractional program and then months later they're doing their taxes and the Texas attorney says gee I wish you told me about this you know now we've got kind of a different situation to resolve but the idea all right well that's interesting now you know there will be some people who will say no I've really got the private aviation bug you know I've got the money I want to just own my own aircraft and that's fine if he can afford it but what sort of considerations do you have to have I mean you know you're not just buying the aircraft you're buying everything that goes with it I guess as well so what do you have to get it up owning an aircraft has a lot of advantages which is first of all its complete 100% freedom in every regard you can get the plane whenever you want you can decorate it however you want you can leave your own things on board you can choose your own pilots you can you can choose everything and you have complete control on the other hand it requires a lot of diligence in terms of getting the crew getting somebody to manage it in terms of keeping up all of the compliance and all of the safety requirements and the maintenance and there are management companies that you can hire who will handle all of that for you but you have to be parking it in a hangar you have so it's that's a lot of headache unless you're really all in and really want the freedom of having you know your own bed and having configured exactly the way you want yes it's a level of concern of worry that goes beyond just having the money essentially there is safety considerations and and so on I suppose yeah that's a good point you mentioned aircraft management there are companies as you say that will you know kind of shoulder all that worry for you and I the pilots and maintain the aircraft and am i right in saying that one other advantage with management is that potentially that company he can charter out your aircraft other people and essentially therefore spread the overall cost of the money you're spending on the aircraft if that sounds like a pretty good benefit if it suits your circumstances yes that is a benefit and that can get a little complicated again you really have to look into the tax implications and what how much you're allowed to do that and how much you can actually write it off and and how that helps you but it can work for sure if let's say you're only really fine like two months out of the year or you know exactly when you're gonna need the aircraft then you can give that aircraft to the management company to charter out and that is a way to recoup some of the costs well this is really fascinating so clearly you know there's plenty of choice out there but it's quite complicated choice and you know just because you're highly successful in one walk of life and you've earned the money to fly this way doesn't necessarily mean that you can you can get there without the help and that's where the the specialist legal advice comes in and the technical advice and and so on yeah thanks we've learnt a lot there and if you need to take a deeper dive into this topic Jen's business jet traveler can help you at BJT online.com you can read articles by experts on how to maximize the investment you're making in private aviation you can search the BJT directory for details on reputable service providers and you can check out which aircraft might suit you best and you'll also hear about some of the successful individuals who are already flying this way and it's quite inspiring I have to say so Jen thanks again for your advice and your time and thank you everyone for watching ok thank you Charlie thanks for watching this AI in video please like subscribe and share it if you've enjoyed it also visit AI and online.com for all the latest on the aviation industry 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Channel: Aviation International News

Views: 52,210

Rating: 4.9389534 out of 5

Keywords: aviation, flying, aircraft, private jet, dassault falcon, gulfstream, bombardier, embraer, cessna, textron, luxury travel, flexjet, netjets, planesense, fractional ownership

Id: Ge43Vs_RkQQ

Length: 12min 37sec (757 seconds)

Published: Thu May 14 2020