Should you Buy or Rent a Private Jet?

The first step to determining whether to charter, buy a fractional share, or own a whole jet is to establish how often you’re flying annually, and assess whether your travel pattern is likely to change in the foreseeable future.

But there’s much more that goes into a decision on which form of utilization works best. Some Business Aviation users with relatively large annual travel requirements enjoy the non-committal element of flying private charter trips. Others who fly relatively few hours enjoy the control that owning an aircraft brings.

To understand whether charter, fractional, or whole aircraft ownership is the right choice for you, it is worth considering the benefits of each...

The Benefits of Private Jet Charter

I always ask prospective aircraft buyers whether they’ve flown privately before. Surprisingly, at least 50% of the people who inquire about purchasing an aircraft have not.

The first thing I suggest to them is to book a charter flight for their next trip, because chartering a jet is the best way to evaluate whether the world of private aviation is right for you.

A two-hour round-trip charter flight is likely to cost between $10k and $50k, depending on the distance and the size of the jet being chartered. If spending that much money is too big a swing for you, then you might want to reconsider why you want to buy a private jet. In essence, the benefits of chartering include:

Access to a Wide Inventory: Aircraft charter allows you to select a different airframe based on your trip. Therefore, if you are going on a short trip alone or with one other passenger, a Turboprop, Entry Level or Light Jet will suffice. A week later, if you need to bring the entire family or executive team from Florida to Las Vegas, a Mid-Size or Super Mid-Size Jet will suffice.

Since you charter, rather than own a specific jet model, you can pick and choose the right jet for the trip. Over time, if you begin to move towards the idea of full aircraft ownership, you will have built up a good idea of which aircraft would achieve 80% of your missions, and therefore which would be a good acquisition.

Predictable Costs: Another attraction of jet charter is that you ‘only pay for what you use’. Charter users don’t have to worry about fixed costs (hangar, insurance, pilot salaries, etc.).

Those stepping up from Ad Hoc charter to Jet Cards (block hour charter purchases) know they’re spending $25k, $50k or $100k for travel with no additional surprises. If something breaks, it’s not your problem (assuming you didn’t break it!).

While you may pay a premium for this non-committal convenience, if you’re not flying that much annually, the premium may be worth the reduced exposure/responsibility that comes with owning the asset yourself.

The Benefits of Fractional Ownership

For some users who are ready to increase their ‘ownership’ commitment by a few gears, they can enjoy some of the benefits of both charter and ownership by moving into fractional ownership.

With a fractional share, the shareholder can access a wider array of airframes, but still have something to call their own (especially on their tax returns).

Acquisition Costs/Capital Outlay: The main benefit of fractional ownership is acquisition costs/capital outlay, and here’s an example of why... If you had $1m to spend, you could get a Light Jet able to seat 5-8 passengers and fly the length of the US east coast that was built back in the 20th century. Alternatively, you could spend the $1m on a 1/2, 1/4, 1/8, or 1/16 share of a newer, much more capable aircraft.

Splitting the Costs: The other benefit of having a fractional share is that instead of footing the whole bill for the aircraft (as would be the case for the older jet you could wholly-own), you are instead splitting the operating costs with the other fractional share owners.

...The Related Downside: As well as the costs, usage of the aircraft is split with the other owners. Let’s say you have a 1/4 share. Although the owners each expect to fly 100 hours per year, theoretically leaving plenty of time for the other owners to use the jet, guess what? Most of the travel demand occurs around the holidays, exactly when you planned to fly...

This will require some planning and is why most fractional ownership fleets are handled by aircraft management companies, which can ensure each owner gets appropriate access to the aircraft when they want it.

The Benefits of Owning a Private Jet

Owning a private jet offers users the most control. But that comes with a hefty up-front price tag as well as ongoing costs such as maintenance, fuel, crew, insurance and storage. 

Nevertheless, for those who can afford a jet, there are many benefits.

Freedom of Travel: Chief among the benefits is the freedom of travel that full ownership affords. You are no longer a slave to the airlines’ schedules, long check-in lines, security procedures, or limited destinations.

Neither do you need to give the same advance notice as is often required by charter operators and fractional ownership fleet operators. The jet is ready and available exclusively for your or your company’s use. You have maximum control of the schedule.

Personal Time Machine: Closely related to the freedom of travel is that your private jet will act like a time machine. Your time in the cabin becomes productive time in a private jet with a suitable in-flight connectivity solution.

Moreover, you can travel to multiple destinations in one day if required – assuming they are relatively close together.

And with your own jet parked at the local airport and ready to fly, you can be far quicker to respond to the needs of key clients/prospective business deals than the competition who are still bound by the constraints of the airlines.

The Experience: Flying isn’t just about getting from Point A to Point B. It’s about the experience too. What good is the ability to travel faster if you still arrive tired and hassled? If you need to step straight into a meeting, or procure an important business contract, you will feel better prepared if you arrive rested and refreshed.

By owning a private jet, you have full control of who you travel with, and the cabin environment itself, tailoring it to your exact needs. Today’s business jet cabin is highly attuned to offer the optimal balance of work, rest and play en route to a destination, or as I like to say, to allow you to “experience your jet life to the fullest”.

In Summary...

So there you have it – several methods of private aircraft utilization. Each comes with its advantages for those it is designed to suit best. No matter which option you choose, the most important thing you can do at this stage is to begin to assemble a team of trusted advisors to help you make the right choice.

Once you’ve decided, revisit the matter periodically asking yourself whether all of the advantages still apply to you, or whether your travel needs have evolved or devolved to require a revision to your aircraft ownership stakes...