Buying a Jet: Getting Past the Ramp Appeal

Five questions to consider when planning to buy a business jet…

Jet Tolbert  |  07th July 2016
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Jet Tolbert
Jet Tolbert

Jet Tolbert is president of Florida-based American Aircraft Sales where he oversees all aspects of aircraft...

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Business Jet Ramp

Ramp appeal can be a powerful hook for some business jet buyers, notes Jet Tolbert. There’s often a big difference between the aircraft you want and the aircraft you need, though. Telling the difference requires some honest answers to some important questions.

While an aircraft purchase is usually planned exhaustively in close concert with experienced advisors, ultimately the principal buyer is the guiding force who determines which aircraft will be purchased. This can be dangerous as many principals do not have the expertise to make the best choice from the options available, while some salespeople and advisors may simply sell them what they want, as opposed to what they need.

For those reasons, following is a list of five questions a C-Suite executive should ask as a litmus test to assess the motivation for the purchase and ensure the right things are being asked of their acquisition agent during the aircraft identification process…

#1: Does your budget consider the total cost of ownership?

On the ‘total cost of ownership’ list should be down-payment, monthly payment, fixed overhead, maintenance, upgrades, market depreciation and direct operating costs.

While it may seem like a no-brainer, often these factors are not well planned for, with the budget failing to account for the different ways to efficiently utilize the aircraft being considered.

The right equation will account for all of the above variables in combination with different ownership structures like high utilization, average use, low utilization, along with low owner utilization combined with charter subsidy (helping offset some of the fixed costs). It will also need to address anticipated changes in mission needs over the short- and medium-term.

#2: Does the aircraft performance meet my mission needs?

While it’s a good start to establish “the aircraft’s the right size, looks good and I can afford it based on the projected hourly costs - and it even has the right range to meet my mission,” more in-depth analysis accounting for all the combinations of projected city-pairs and passenger loads is required.

That way the prospective purchaser will know what they’ve bought when a fuel stop is required for some of the less frequently travelled city-pairs.

It’s vital to evaluate the most demanding airport the jet will fly to in terms of altitude, temperature and fuel requirement to the next destination. Armed with such information, the analyst can better determine which aircraft types will make the next leg non-stop and with the best safety margin.

#3: What’s in the image and appearance of a jet?

Maybe that occasional extra fuel stop is worth that ‘super-sexy’, sleek-looking airplane that captures your attention and imagination. Most likely it won’t be, though…

You must be careful that the jet you buy is for the long-haul. Understand there is far more than what meets the eye when it comes to a smart aircraft purchase.

#4: Does the cabin work for everyone?

How many seats does the candidate aircraft have; is the cabin stand-up; and what about sleeping the configuration? Just remember that while you should definitely have all the amenities that you want, the purchase is not all about you. Whether flying for business or pleasure, there is always someone else important to consider.

Maybe it is a valued director of manufacturing, or perhaps it’s your better half. Regardless, these people need to be as comfortable in the airplane as you are if you're going to enjoy the full benefit of the purchase.

So you will need to make sure that the important passengers on your jet are getting to the final destination fully-rested and prepared. Sometimes saving money on a smaller cabin is not an option, and picking a medium jet over a small one is the best investment.

#5: How should I balance maintenance requirements with flexibility and schedule requirements?

The benefits of a new or newer aircraft are obvious. You’ll enjoy a better dispatch reliability with less time spent undergoing maintenance. That comes at the cost of higher upfront capital with greater exposure to market depreciation.

A maintenance projection of the prospective aircraft will shed light on upcoming inspections and anticipated downtime. A seasoned expert will also be able to advise on any potential unscheduled maintenance. Together, these projections will provide an idea of how much the aircraft will realistically be available to use, and how much it will cost to maintain.

In Summary…

Today’s market offers unprecedented availability in aircraft from factory-new to older; aircraft that are technologically relevant and at bargain basement prices. Guidance from a seasoned aircraft acquisition firm will make all the difference in understanding what this means to an aircraft purchaser – and how to seize a great opportunity, while steering well clear of potentially costly emotion-led decisions!

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