Just as there are various classes of executive jets to meet different passengers’ demands, so there are several ways of funding your flying requirements. London Executive Aviation (LEA) chief executive, Patrick Margetson-Rushmore, reviews them here.
The simplest method of using a business aircraft is via straightforward ad hoc air charter. This is exactly what it sounds like – a private jet charter is arranged, perhaps as a ‘one-off’ or on an occasional basis. As we say at LEA, ‘Phone it, book it, pay it, fly it and forget it’; it’s that easy at the entry level for Business Aviation usage.
However, if you know that your company is going to be undertaking a certain amount of flying over a period of time, a ‘block hours’ or jet card arrangement may be a better option.
With this, you buy a ‘block’ of flying hours – say 25. A single, upfront payment is made, and by way of incentive you get a discount on the normal hourly flying rate.
An added benefit is that all your details are stored on file, so the process of re-booking in the future becomes a case of a two-minute phone call – thus it’s worth looking ahead at your travel requirements if you’ve been using charter on an ad-hoc basis to determine whether your need is likely to increase, and if so, by how much over the coming year.
A reputable private jet operator should be able to offer you a choice of aircraft – your 25 hours shouldn’t tie you to just a single type – so if your circumstances change you should be able to use a different aircraft from the fleet and you know in advance what your cost will be (either more or less than the type on which you initially flew).
One disadvantage of block hours is that some companies operate a ‘use them or lose them’ policy in which unused hours after a certain timeframe are lost. This is a policy that other operators – LEA included – frown upon, but I advise people to check carefully in advance when evaluating alternatives.
Stepping Up: Fractional
The next step up on the ownership ladder is fractional jet ownership, which is a bit like buying a share in a racehorse. In exchange for quite a sizeable amount of money, you typically receive one-eighth or one-sixteenth of an executive jet that is available to you whenever you need it. (Note: you won’t necessarily be flying in ‘your’ jet, but in a particular category of aircraft.)
As well as the upfront equity sum you also pay a management rate and a fee every time you fly.
Overall, this may prove quite an expensive way to fly, so you need to carefully analyse your needs, as you will typically be committed to a fractional program for five years.
Fractional is most likely to make financial and practical sense for people who regularly make one-way flights from different departure points – for example, if you are likely to phone up and say, “I’m going to be in Dallas next Friday and need to go to Tucson”, fractional can be an effective solution.
A disadvantage worthy of consideration with a fractional share is that your options can be limited when you want to exit. If you decide you no longer want the aircraft, you will usually find that your only option is to sell your share back to the fractional company, which clearly gives them an advantage when it comes to agreeing terms. This is another point worth discussing at the outset before committing to a share.
The ultimate option is to buy your own aircraft. Buying a business jet is not cheap, but prices can be very competitive. A Cessna Citation Excel, for example, which is the world’s most widely-used business jet and can carry up to nine passengers 2,000nm, can be bought today for as low as $3-4m. The Embraer Legacy 600 with its larger cabin size can be purchased for as low as $6m.
To offset the costs of ownership, several aircraft owners also place their aircraft with a charter operator. The operator not only takes care of all the aircraft management issues, such as crewing, fuel purchase and hangarage, but, when the aircraft isn’t in use by the owner can charter it out to third parties to provide a useful source of additional revenue.
The options for private jet travel are therefore broader than ever before, which helps to explain its rapidly growing popularity around the world. If you need to make the most of your time, there is a way to access private jets for – almost – any budget.