Careers that call for frequent, routine travel to different parts of the globe can necessitate the use of a more immediate, accessible form of air travel than commercial flights. So for those in such a situation, given that money is no object, a private jet might seem like a practical choice. You'd be surprised just how attainable a private jet can be these days, especially for those who can afford them. Coming in a variety of models and sizes, private jets can speed up your travels and perhaps even help you save on airfare, depending on how often and how far you typically fly. In the effort towards acquiring a private jet, you'll find that you might have two main choices. The first is to buy your private jet outright, and the second is to lease a private jet instead. Which option will work best for your needs and budget? Find out here.
Types of Personal Planes
Before we dive into the specifics of buying or leasing, it's worth knowing the different types of personal plans available. The price of a jet can vary widely depending on its size, capacity, and amenities. So knowing which plane will suit your needs best can also help you decide whether to buy it or to lease it.
|TYPE||SEATING CAPACITY||AMENITIES and FEATURES||DISTANCE (Without refueling)||COST|
|Compact light jets or very light jets||4 - 7 passengers, with no cabin attendant||Lavatory on board||1,174 nautical miles||$2 - $3 Million|
|Small cabin jets||8 passengers, with no cabin attendant||Lavatory on board||1,500 nautical miles||$4 - $7 million|
|Super light jets||8 passengers, 1 cabin attendant||Spacious interior, lavatory on board||2,030 nautical miles||$10 - $15 million|
|Midsize cabin jets||8 passengers, 2 cabin attendants||Lavatory on board, better fuel economy||3,500 nautical miles||$20 - $32 million|
|Super midsize cabin jets||12 passengers, 2 cabin attendants||Lavatory on board, spacious, faster||4,000 nautical miles||$35 - $50 million|
|Heavy jets or large cabin jets||10 passengers, 2 cabin attendants||Luxurious comfort, lavatory on board, spacious interiors||4,500 nautical miles||$40 - $60 million|
|Ultra long range heavy jets||12 or more passengers, 2 or more cabin attendants||Lots of baggage space, stand-up cabins, reclining, flat-lie bed seats, enclosed lavatory on board, luxurious interiors||6,000 nautical miles||$60 - $70 million|
|Bizliners||18 passengers, 3 or more cabin attendants||Completely customizable interiors, lavatory on board, provision for dining space, private suites, and business centers||7,848 nautical miles||$90 million or more|
Buying a Private Jet
Of course, the first thing on your mind would probably be to purchase a private jet. On its own, a personal plane can be a smart investment, given that it can have an impressive resale value. But that's not all there is to consider.
Up front, the cost of a private jet can set you back anywhere between $2 million and $90 million, depending on the model, size, and amenities that the plane offers. Keep in mind that the size of your plane will also have an impact on the distance it can travel.
Aside from the cost of the plane itself, it's also worth considering the expenses associated with the operation and maintenance of your jet. Fuel, crew salaries, maintenance checks either planned or unplanned, hangarage, and insurance can all come to around $700,000 or $4 million in annual expenses.
Once you factor in all of the costs, and you find that the capital and operating expenses are both within your budget, then you might find buying a jet to be a better choice.
Other buying contracts exist for private jet use. One such option is called the fractional ownership which lets you 'buy' a portion of the plane. This can be done through a management company, and shares are typically divided into quarters, eights, sixteenths, and so on.
Paying for a fraction of the jet's cost gives you a number of hours to use the plane for your own personal purpose. While it might actually cost more in terms of the plane's value, fractional contracts will be easier on your pocket up front.
Pros of Buying a Private Jet
- Potential Investment - Just like a home or a car, your personal jet is an investment. This leaves you the opportunity to sell your plane later on and earn back a portion of the money that you spent using it. In the same light, some owners turn to renting out their private jet to make a profit off of their ownership.
- Option to Upgrade - Another thing that you might want to consider is the fact that owning a jet gives you the option to upgrade it as you deem necessary. You'd be surprised just how far you could personalize the different aspects of your plane, helping you create a comfortable experience that's better suited to your preferences.
Of course, it's also worth mentioning that these upgrades can improve the cost of your plane, increasing its value should you decide to sell it at a future date.
- No Flight Restrictions - Often, leasing a private plane means that you'll have to agree to certain restrictions. These are put in place by the lessor to guarantee that their plane is kept in proper condition during the time of use. Of course, this also means that you might not be able to use the plane with as much freedom as you would have had you owned it instead.
Cons of Buying a Private Jet
- Expense - Perhaps the biggest set-back of owning a private jet is the cost associated with upkeep and operation. Depending on how often you use your plane, you'll have to consider the price of fuel. Then of course there are the costs associated with maintaining your plane and paying the people who fly it.
- Parking - When it isn't in use, where should you keep your private plane? A private jet should have its own designated hangar. In some locations, your local government might even require that you show proof of this dedicated parking area before you're allowed to secure your personal plane.
- Liquidation - When the time comes that you no longer have a use for your private jet, what are you supposed to do with it? While there's actually a fairly large market for private planes, you need to consider the fact that many of those who are capable of buying them will likely have the funds to purchase brand new.
Another thing you might want to consider is the fact that private jet models can phase out older designs. This can significantly impact the price of your plane, putting a dent on the amount you'll get off of a resale.
Leasing a Private Jet
On the other hand, you have the option to lease your private jet. What that basically means is that you can rent the jet for a certain period of time. What happens at the end of your contract will depend on what you decide with the lessor. More often than not however, these contracts let you end your lease without the pressure of having to purchase the plane. Typically, there are two types of lease agreements you'll find:
- Dry lease - What this basically means is that you'll rent the plane for a period of time without any of the added essentials. You'll get just the plane - no crew, no pilot, and no cabin attendants, among other things. You'll have to look for those important aspects on your own, but a dry lease will let you hold on to the plane for a relatively longer term.
- Wet lease - As opposed to the dry lease, a wet lease gives you a complete package. You'll get your plane, and all of the necessary personnel that you need to get it up and running. They will typically cost more, and they usually last for a shorter period of time.
Needless to say, the dry lease contract probably works best for those who might have a specific team of professionals that they want to hire to operate the plane for them. But if you want a private jet that's ready to go, then perhaps it would be best to opt for the wet lease in order to eliminate the hassle of finding your own team.
Pros of Leasing a Private Plane
- Flexibility - Being able to get a feel of using a personal plane should give you a load of insight as to whether you actually need it or not. So at the end of your lease contract, you get to exercise the flexibility of whether or not to go in for a purchase.
Leasing contracts let you choose to simply terminate the contract at the end of the lease, to renew the contract with the same or a different personal plane, or to purchase the same plane.
Now, having been able to use the plane during the time of the contract, you'll be better equipped to decide whether or not you truly would benefit from owning one or from simply leasing the plane when you need it.
- Change Planes When Necessary - Another reason why you might want to lease a plane instead is the fact that you can change your plane of choice at the end of the contract. This lets you adjust your private jet to better suit your needs, if there are changes to your preferences and requirements.
For instance, a business owner who finds the need to take a group of executive with him during his travels might switch from a compact light jet to a slightly larger model that's better suited to accommodate more passengers.
- No Burden of Liquidation - Lastly, it's also worth noting that leasing a plane leaves you no burden to liquidate the plane at the end of its usable lifespan. There's no need for you to go through the tedious process of finding a buyer, letting you release the plane from your possession at the end of the contract with no added responsibility to find out what happens to it next.
Cons of Leasing a Private Jet
- Usage Restrictions - Of course, your lessor will exercise what measures they can to make sure their plane is returned in good condition after the end of your contract. That simply means that you'll have to follow specific usage restrictions such as hours of flight and perhaps even allowed destinations.
For a lot of people looking into using a private jet, these limitations can be a deal breaker especially because you would expect a certain degree of freedom when it comes to the use of a private jet.
- Maintenance Costs - Depending on the coverage of your contract, there might be a few maintenance costs that you'll still need to pay for out of your own pocket. This means exerting financial effort towards repairing damages you might incur out of wear and tear. Of course, for any practical person, paying to fix something that isn't yours might seem like an unreasonable, unnecessary expense.
- Never Ending Payments - If you will always need your private jet, then leasing becomes a problem because you'll never stop paying for its use. In the long run, leasing can actually turn out to be more expensive because you never end up owning anything, and thus have to keep paying for the use of your chosen plane.
Of course, with buying, you will still have to continue to pay for maintenance and operation costs even after you've purchased your unit. But once that's out of the way, then the plane will be yours and you won't have to worry about continuing to pay for rental fees for the foreseeable future.