Everything You Need to Know Before Buying a Private Jet
At Jet Linx, we are familiar with the process of purchasing private jets because we have catered to the one-of-a-kind requirements of hundreds of aircraft owners and offered them individualized solutions for private aviation. Our Acquisitions and Sales team serves as a reliable advisor to potential purchasers, presenting them with aircraft that meet their personal travel requirements while also offering the highest possible return on investment. When you are looking to buy a private jet, we understand that your requirements are one of a kind, so we work hard to find a solution that is tailor-made for you.
When purchasing a private jet, there are many factors to think about in addition to the initial purchase price. These factors include how the asset will be managed, as well as how the owners might deal with the potential financial and tax ramifications of ownership.
If you are interested in purchasing a private jet, the Acquisitions & Sales team here will guide you through the purchasing process and help you develop a mission profile for your private jet. At Jet Linx, we paint an accurate picture of aircraft ownership by breaking down the various costs associated with the investment as well as the various options available to reduce those costs.
WHEN IS THE RIGHT TIME TO THINK ABOUT PURCHASING A PRIVATE JET?
For a select and well-defined group of buyers, aircraft ownership is a good investment. Nevertheless, regardless of the circumstances, our team will locate the most appropriate aviation solution for you. Jet Linx provides its customers with a variety of alternative solutions for private aviation, ranging from Joint Ownership to the best Jet Card membership programme in the industry.
In the past, there was a fairly typical hierarchy in place when it comes to the various private aviation alternatives. If you travel between 25 and 50 hours per year, you should utilise a Jet Card. If you fly between 50 and 400 hours per year, you should consider fractional ownership or entire aircraft ownership. On-demand charter is the best option for those who fly less than 25 hours per year. In recent years, these distinctions have become less clear as a result of the introduction of new products into the market, such as the Jet Linx Joint Ownership programme, which cater to more specialised users of private aviation.
While it might make sense for some users of private aviation to employ a Jet Card when flying more than 50 hours per year, it might make more sense for other users to acquire a private jet when considering the same number of annual flight hours. There are a variety of issues to think about, not the least of which are your way of life and your ability to financially support yourself. Let’s start with the positive aspects of having full ownership of an aeroplane.
THE ADVANTAGES THAT Come Along With Purchasing a Private Jet
• Flying privately in an aircraft that you own grants you access to a number of benefits, the most notable of which are comfort and convenience. When you have your own private jet, it’s like having an extra room added onto your house. The journey is made incomparably less bumpy and significantly more comfortable.
• Consistency of Experience: The payback is immeasurably greater when you are familiar with the members of your crew and are able to count on them whenever your agenda so requires. One can have an experience that cannot be found in any other kind of private aviation programme if they are given the opportunity to fly with the same trustworthy pilots.
• Personalization: You have the option of painting your jet gold if you’d like, and doing so is completely up to you. If you want to make a statement with the inside, you may do whatever you want to it, from expanding the galley to rearranging the cabin. Do you wish to bring your pets along with you? When you acquire a private plane, the possibilities are truly endless.
• The Generation of Revenue: When you buy a private jet, you have the ability to offset the cost of ownership by selling flying hours to Jet Card programmes or charter operators. This can be done in order to generate additional revenue. When aircraft owners select Jet Linx as their aircraft management provider, they gain access to a pre-existing stream of revenue in the form of our nationwide Jet Card programme. This secure stream of income contributes to offsetting the costs associated with ownership, and the wholesale charter market provides an opportunity to generate more cash when it is required to do so.
BARRIERS TO BUYING A PRIVATE JET
• Cost of Investment and Operation: The price of a private jet can range anywhere from $3 million to $90 million, depending on whether or not it is a brand-new aircraft or one that has been previously owned. The purchase price of a pre-owned Embraer Phenom 300, which is a popular model of light jet aircraft, would be in the range of $5 million to $7 million. However, the cost of ownership on an annual basis, which can range from around $1.5 million to $2 million, is not included in the purchase price (depreciation included). The amount of money spent on variable expenses is proportional to the amount of time spent flying and the distance travelled, however a typical Phenom 300 owner can expect spending $800,000 on variable costs if their aircraft logs 400 or more flight hours year. The costs associated with landing and parking fees, as well as fuel, maintenance, crew expenditures, catering, and parts, are examples of variable costs.
• Recruiting and Supervising Flight Personnel, in Addition to Other Fixed Costs: A variety of other fixed costs, such as refurbishing, recurrent pilot training, computer maintenance, avionics maintenance, and navigation chart service, are also included in the price of a private jet in addition to the pilot salaries ($100,000 or more per pilot in addition to benefits), insurance ($30,000 or more), and the cost of renting a hangar ($30,000).
• The Management of Flight Schedules and the Generation of Revenue: There is no one-size-fits-all solution for the requirements of an aircraft owner; yet, there is a fine line to walk between using a plane to generate cash and keeping it for personal use. If it is not managed effectively, synchronising the schedules of the owners, the pilots, and the passengers can be a difficult task. When managed by a dedicated team of industry professionals, scheduling flights and determining availability presents the opportunity to cut costs.
WHAT PRECAUTIONS SHOULD BE TAKEN PRIOR TO THE PURCHASE OF A PRIVATE JET?
CHOOSE A TRUSTED AIRCRAFT ACQUISITIONS EXPERT
When acquiring a private aircraft, it is in your best interest to consult with industry professionals, just as it is when purchasing a home. Private aviation experts provide specialist knowledge in determining the aircraft that is best suited to meet your requirements. They are also able to explain the tax implications, contractual obligations, and technical topics that are associated with purchasing a private aircraft. Finding the perfect companion ought to instil confidence in you that you are moving in the right direction.
DETERMINE YOUR BUDGET
When figuring out your financial plan, it is essential to take into account not only the initial cost to buy the aircraft but also the various ongoing expenses that come with aircraft ownership. An experienced aviation consultant can help you devise a strategy for mitigating the costs of aircraft ownership as well as decide what types of aircraft will perform most effectively within your financial constraints.
NEW VS PRE-OWNED PRIVATE JETS
The buyer has the ability to choose between brand-new and previously owned aeroplanes. Even while the purchase price of a new private jet is more than that of an older model initially, the warranties that accompany newer models can help lower the cost of maintenance in the immediate term. Buying a brand-new jet also comes with the most up-to-date technology, conveniences, and comforts; nevertheless, the purchaser has the option of deciding whether or not to invest in these features.
Many formerly owned aeroplanes are capable of performing in the same manner as their brand-new counterparts, but come with a reduced initial cost and the possibility of experiencing slower depreciation. It is essential to collaborate with the most suitable partner in order to locate and examine used private jets, but the immediate cost savings that can be realised by purchasing a pre-owned jet might be substantial. The phrase “pre-owned” does not necessarily refer to a private jet that is ten years old and has logged thousands of flight hours. Some previously owned aeroplanes are less than a year old and have logged fewer than a hundred flight hours in their careers.
AIRCRAFT MATCHING ASSESSMENT
Consult with a specialist regarding the normal profile of your missions as well as your own preferences for travel in order to narrow down the search to a list of aircraft manufacturers and models that are suitable for your requirements. A consultant ought to be able to supply a comprehensive rundown of the capabilities and advantages offered by each type of private jet, as well as the typical expenses involved in maintaining them. A reliable partner will make it their mission to locate an aeroplane that meets all of your specific requirements.
WHAT QUESTIONS SHOULD YOU ASK BEFORE MAKING AN OFFER?
After you have determined the type and model of aircraft that is most suitable for your requirements, you will want to collaborate with a private jet acquisition advisor to formulate an alluring offer in order to secure the most advantageous conditions of purchase. However, before purchasing a private aircraft, it is beneficial to ask some basic questions to an advisor. This is true regardless of how much trust you place in that counsel.
A surprising amount of aeroplanes aren’t the same make and model as they appear to be; therefore, it is important to inquire about the serial number. All of this information is displayed on the data plate, but it is also essential information that a prospective purchaser should be aware of before making a purchase. The only way to learn this information is if the vendor is willing to share it with you, which they always ought to be willing to do. This is the only way to find out.
• The registration number of an aircraft, which is also referred to as the “N” number or the tail number in some circles, is another source of useful information regarding the aircraft’s title. On occasion, this number will be presented in an incorrect format on the sales papers.
HOW COME THE AIRCRAFT IS AVAILABLE FOR PURCHASE?
• Even if there are many compelling arguments in favour of selling a private plane, the last thing you want to do is take on someone person’s headaches. Your advisor should be able to provide you with information on the history of the aircraft, which should include details on its maintenance, usage, as well as information on who managed the aircraft and how it was maintained.
INQUIRE ABOUT WORK HISTORY AND MAINTENANCE RECORDS
• It is possible to repair a damaged aeroplane, but, among other specifics, you will need to know what kind of damage was sustained and who performed the repair. The maintenance history of a private jet is perhaps more crucial than other aspects of the purchase. For such a substantial investment, having the peace of mind that comes from knowing the plane has been well-maintained is invaluable.
• Along the same lines, make sure to check the total amount of time that has been spent on the airframe, the total amount of time that has been spent on the engines, and the amount of time that has elapsed since the last significant overhaul. You need to be aware of the specifics about what was done to the aeroplane in the event that a significant overhaul was performed on it. This information should be provided to you by your advisor, who should also analyse how a purchase might be impacted by it.
• Your adviser should also ask the seller for a comprehensive description of the avionics, including the make, model number, and installation date of each item; this should be included in the request.
• Make sure to compile a comprehensive inventory of all of the additional equipment that has been installed in the jet. This inventory should include strobes, engine monitors, oxygen, unique performance-enhancing kits, articulating seats, and anything else that might have an impact on the jet’s ability to fly safely or efficiently.
INQUIRE ABOUT THE DATE OF THE MOST RECENT ANNUAL INSPECTION, WHO CARRIED OUT THE INSPECTION, AND WHAT WAS DISCOVERED DURING THE INSPECTION.
• Your acquisitions adviser need to be able to inspect the aircraft; nonetheless, it is essential to be aware of the date of the most recent examination in addition to the pedigree of the business that carried out the inspection.
HOW WAS THE AIRCRAFT STORED IN THE FIRST PLACE?
• It is necessary for you to have information regarding the location of the aircraft’s previous bases, in addition to the conditions under which it was stored when it was not in use.
FROM THE TIME OF MANUFACTURE, HAVE ALL OF THE MAINTENANCE RECORDS BEEN COMPLETED?
• The absence of logs should raise a red flag. It is usually possible to find a solution to the problem, but doing so raises a great deal of new issues and requires extra material to be thoroughly investigated.
HOW MUCH WILL IT COST YOU TO BUY AND OPERATE YOUR OWN PRIVATE JET?
PURCHASE PRICE
The cost of purchasing an aeroplane is determined by the manufacturer and model of the aircraft, as well as its age, range, and capacity. However, the ability of your adviser to negotiate an agreement with the most favourable terms available is just as significant. To give you a general idea, the price of a private jet can range anywhere from $300,000 to $90 million. Remembering that the purchase price is just one of many costs associated with aircraft ownership is the single most important item to keep in mind about purchase prices.
THE CUSTOMIZATION OF AIRCRAFT
The option to personalise your jet in exactly the way you see fit is one of the many perks that come along with ownership of a jet. However, the cost of a fresh coat of paint can reach hundreds of thousands of dollars, and depending on the market, it might or might not increase the value of the aircraft. It is advisable, prior to making any modifications to a private jet, to seek the advice of an experienced professional in order to gain insight into the kinds of modifications that will prove to be beneficial in the long run.
COSTS RELATED TO OPERATION AND MAINTENANCE
When selecting the right aircraft to buy, one of the most important factors to take into account will be the ongoing costs associated with maintaining the aircraft after the purchase has been made. The annual costs of maintenance and operation for an aircraft typically range from half a million dollars to one million dollars for the owner of the aircraft. Private jets that are less than a decade old typically have higher initial purchase prices but lower early lifetime maintenance costs.
FUEL COSTS
Because one of the most significant expenses associated with owning a private jet is fuel, prospective purchasers of aircraft should pay close attention to the fuel efficiency of the aircraft they are considering purchasing. To give just one illustration, the annual fuel expenses for a Heavy Jet with a fuel capacity of 50,000 pounds would range anywhere from $400,000 to $900,000. (depending on usage). However, as a result of our large national fleet, clients of Jet Linx aircraft management are eligible for bulk discounts, which can result in annual savings of up to 15% on fuel.
Flight Crew Members as well as Training
The cost of crew and training varies based on flying hours, but personal management of pilots and support crew is an additional cost that also requires a professional crewing team, accountants, and human resources. Crew salaries can range from $60,000 to $150,000 per pilot (plus benefits), and recurrent training can cost anywhere from $30,000 to $100,000 annually. Managing crew and maintaining a high standard of safety is an area where owners should not cut corners. Flying with a highly skilled crew offers an immeasurably better experience for owners and for revenue-generating passengers.
HANGAR FEES
The availability of adequate hangar space is necessary for the care and upkeep of a private jet. Renting private hangar space comes with an additional monthly cost for owners of private jets, but this expense can vary depending on the location. The annual price tag for this service can range anywhere from $25,000 to $80,000.
AIRCRAFT MANAGEMENT AND THE GENERATION OF SALES FEES
It is to a private jet buyer’s advantage to hire aircraft management companies such as Jet Linx to assist in the acquisition of a private jet because these companies have the expertise to manage over one hundred distinct types and categories of private jets and the scale to reduce nearly every cost that a private jet buyer will encounter. These costs include all fees related to maintenance, fuel, and hangar space. In general, owners of Jet Linx aircraft should anticipate a minimum savings of 15% on these costs, which will result in annual savings of thousands of dollars.
When you buy a private jet through a management company, you will also be able to get a clear picture of the costs associated with its operation and maintenance. You will be in a better position after having a pre-purchase inspection performed by the team that will be responsible for the health of your newly purchased Jet. When a private jet owner works with the Acquisitions and Sales teams at Jet Linx, they are able to rely on a single reliable partner for the purchase, operation, and maintenance of their aircraft, as well as for the selling of their aircraft.
With our Jet Card scheme, Jet Linx provides a built-in revenue stream for our customers. All of the aircraft owned by their respective owners will be made available for usage in the Jet Card scheme, which will allow revenue hours to be applied toward offsetting ownership expenses. On top of our Jet Card program, our fleet can also be released to the wholesale charter market for added revenue. Our industry-leading safety standards make our private jets highly sought-after in the charter market. Our aircraft owners enjoy two separate revenue streams, ensuring that their costs of ownership are reduced.
HOW DOES JET LINX HELP CLIENTS BUY A PRIVATE JET?
With the Complete Aircraft Transaction Program, Jet Linx not only assists clients in buying a private jet, but also provides additional value through the management of those assets and their eventual sale. This wraparound service provides complete satisfaction for the entire length of aircraft ownership.
HERE’S A STEP-BY-STEP LOOK AT OUR PRIVATE JET PURCHASE PROCESS IN CAT PROGRAM:
• Perform an owner and aircraft matching assessment to ensure a proper fit, per the client’s specific wants and needs;
• Arrange a visual inspection of the aircraft and demonstration flights for client and Jet Linx (as applicable);
• Source a trusted aircraft broker to locate potential aircraft;
• Assist client with the aircraft price evaluations, negotiations and offers;
• Help client craft an attractive aircraft purchase agreement;
• Perform an initial aircraft records review to ensure proper title and service have been performed;
• Assist with selecting the pre-purchase inspection facility by using a trusted industry vendor;
• Provide model-specific guidance and recommendations to the maintenance facility to conduct its standard pre-purchase inspection;
• Provide input and guidance on technical issues discovered during the pre-purchase inspection;
• Review the pre-purchase inspection findings and provide recommendations on how the client may want to proceed;
• Upon completion of the pre- purchase inspection, provide a forecast of maintenance required/due items for the next 24-month period;
• Coordinate the details of the aircraft purchase closing.
FREQUENTLY ASKED QUESTIONS ABOUT PURCHASING A PRIVATE JET
Jet Linx seeks to educate prospective aircraft owners. If you have questions, we have answers.
IS IT BETTER TO BUY A NEW OR PRE-OWNED PRIVATE JET?
Both new and pre-owned private jets offer positives and negatives when looking to purchase – we would not rate one type as superior to the other. Consider the following three elements: the initial purchase price, the operating costs (including offsetting charter revenue), and the devaluation of the asset over time. New aeroplanes have a higher purchase price but lower operating costs due to warranties. In general, major maintenance and inspection costs are relegated further into the future, so those looking for pre-owned aircraft should consider this when financing. Newer aircraft can be more efficient (climb faster, burn less fuel, require less maintenance) than used ones. However, older aircraft can always be modified, for a cost.
ARE NEWER PRIVATE JETS SAFER?
No matter the age of a private jet, they all offer the same level of safety. While aircraft may have different equipment and offer different levels of performance capabilities, there is not a difference in the level of safety between new and used private jets.
The level of safety offered comes from the safety standards followed by pilots, crew and operators. Jet Linx leads the industry when it comes to safety; we guarantee the highest standard of safety in the industry.
WHAT IF I BUY A USED AIRCRAFT AND UPDATE IT INSTEAD OF BUYING A NEW PRIVATE JET?
Upgrades to equipment, paint, and interior are always possible, but sometimes the retrofit cost plus the downtime makes this process undesirable. When you consider residual value, upgrading an older model may not make economic sense, but this is something you would want to consult with one of our experts. This is a great example of when you should consult with Aircraft Acquisitions & Sales experts at Jet Linx. WHAT ABOUT FRACTIONAL OWNERSHIP?
You can always consider a fractional share in a private jet, but beware of the disadvantages. Fractional shares mean lower residual value, limited aircraft choices, fewer financing options, and the fact you only own part of an airplane. You are restricted in what you do with that asset, as it has to remain part of the fractional operators program. Transferring a ¼ share to another operator doesn’t really work.
Jet Linx now offers a Joint Aircraft Ownership program, allowing you and a suitable partner to split ownership of a jet. This is the lowest net cost option to buy a private jet, and it is also the closest you can come to a true sole ownership experience.
WHERE CAN I BUY A PRIVATE JET?
There are many aircraft listing sites or the Jet Linx aircraft marketplace that show what is available on the market, but it is always best to establish a relationship with a trusted broker who can provide guidance and expertise during the buying process. Regardless of what your decision is during the purchasing process, make sure you are working with experienced professionals, such as our own Sale & Acquisition experts.
