The private jet industry caters to a very exclusive clientele. Multinational corporations and rich entrepreneurs use private aviation services to tend to their businesses.
There are a myriad of reasons why private air travel has numerous advantages:
It allows for better and more efficient time management since flight delays and crowded airports are no longer a hindrance.
- The aforementioned protagonists are in control of their own schedule. They are the ones that dictate when the flight takes off. The plane waits for them and not vice versa.
- The hassle of checking in baggage with standard commercial airlines is completely eliminated.
- Better safety is guaranteed since clients have the ability to select their own pilots and flight crew. This helps them gain peace of mind since they would be aware of their qualifications and track record.
However, just like any other industry, the private jet business is an investment, albeit an extremely expensive one. On one hand, there are certain businesses or individuals that opt for outright ownership of private jets. On the other hand, some prefer to be more prudent and choose to lease private jets. Perhaps the latter group are right in their approach.
Here are 3 reasons why leasing a private jet is a better alternative than to own one.
1-) (Significantly) Lesser expenses.
As previously stated, private aviation services are a niche and a very exclusive industry. Chartering a private jet is already a very expensive proposition.
The biggest drawback of owning a private jet is undoubtedly the high costs associated with it. The costs of purchasing can set you or your business back anywhere between $2 million for compact light jets, and $90 million plus for bizliners.
Just like vehicles, planes require constant upkeep and maintenance throughout the year. Granted, these types of costs vary between one aircraft and the other, but they typically range between $500,000 to $4 million per year.
Fuel should also be taken into account. Fuel expenses depend on the size of the plane, the number of passengers it can hold, and the flight destination. Assuming oil prices are stable throughout the year, fuel costs can range between $400,000 and $900,000.
Another key variable factor is the parking expenses. Needless to say, private jets are not parked on some open grass field. They need to be stored safely inside their own designated hangar where they can be either checked for maintenance or be refueled.
Hangar rental costs can vary between $3000 per month for small Cessna airplanes to $20,000 or $30,000 per month for large Gulfstream or Bombardier Global Express Corporate Jets. That is between $36,000 and $240,000-$360,000 per year.
Last but not least, there is the potential liquidation sale. Let us assume, for the sake of argument, that you or your business have chosen to purchase a private jet. After some time, you opt to sell it. Granted, the private aviation market is fairly large and private jets do have a fairly good resale value.
What must be taken into consideration, however, is the possibility of private jet models being phased out by newer ones. This can significantly impact the price of your plane, and put a huge dent on the amount you or your business will get off of a resale.
All these costs combined together add to what is already a hugely expensive investment. Additionally, we opted not to include the insurance premiums associated with owning private jets since fees and policies between one insurance company and another.
Long story short, with the exception of partial maintenance costs, leasing a private jet is a much cheaper alternative.
2-) The possibility of switching planes in certain situations.
Another benefit of leasing a private jet is the possibility of changing your plane of choice. You or your company have the option of choosing a private jet that best suits your needs and preferences.
For example, a CEO of a Fortune 500 company decides to go on a business trip with his aides and the company’s top executives. Instead of travelling in a compact light jet, he must switch to a larger model that’s better suited to accommodate more passengers. Leasing a private jet under similar or slightly different circumstances can come in handy.
This option is simply out of the question in the event that you, or your business, opt to own a private plane instead.
3-) The burden of liquidation is ruled out.
As previously discussed, when owning a plane, there is the constant fear of a liquidation sale and the end of its usable lifespan. Leasing a private jet eliminates those fears.
You will not have to go through the tense and tedious process of finding a willing buyer. Instead, at the end of the lease contract, you will have no responsibility whatsoever in terms of finding out what happens to the plane next.
All in all, private jet travel is the ultimate sign of luxury and affluence. The private jet industry only caters to people of considerable financial means. But even opulence should not lead to carelessness.
Even though the term may be a bit misplaced, leasing a private jet is a “cost-effective” measure that provides all the amenities required by you or your business, without all the costs associated with owning one.