Planning for the cost of buying a private plane includes the cost to operate and maintain the aircraft in order to eliminate unwelcome surprises. Below are five missteps to watch out for in an aircraft acquisition:
- Identify Your Needs
- An older plane may have a lower purchase price, but look at the operating costs and any needed upgrades
- Will you try to offset ownership costs by allowing a charter company to charter the aircraft to third parties
- Aircraft brokers can provide useful services & information
Go beyond only looking at the purchase price to achieve the best experience, both during the acquisition process and when owning, operating and enjoying your business jet.
Article – How Much Does it Cost to Buy a Private Plane
As a business leader, the connection you make through in-person meetings with important clients and vendors is not matched by a conference call or video chat. If airline flights to your destination are limited, making it a four-day trip for a single site visit or a week-long trip for your sales team to meet with a prospective customer, you have lost efficiency and probably reduced safety. If you travel by private plane, you can significantly reduce travel time and even hold private strategy sessions on the plane.
If this sounds appealing, you’re probably wondering, “How much does it cost to buy a private plane?” However, the complete answer is not a single number. Will you buy a new or pre-owned plane? Will you buy a plane that is nearly new and still has some warranty remaining or will you buy an older aircraft that will be less expensive to purchase?
Whether you want to buy a new or pre-owned plane, you need to ask questions beyond how much the purchase price is. You should also ask how much it costs to operate and maintain the private plane on an annual basis.
A private plane is beautiful and delivers great time savings and convenience, but before you buy, you need to know the expected cost to own and operate the aircraft. You have to pay to hangar it, insure it, maintain it (even if it is not flying) and hire a professional flight crew. And if you cannot afford the annual operating costs after you purchase the plane, your bargain purchase price was no bargain.
How To Determine How Much It Costs To Buy A Plane
To determine how much it costs to buy a private plane, start by identifying your needs. Buying a plane based on your answers to these initial questions helps you incorporate the plane into your current business operation. Will the plane be a business asset used by you and key personnel for business trips, or will the plane be primarily used for personal trips for you and your family? How many passengers and how much luggage will be on a typical flight? Do you need a plane to fly from New York to Florida or from New York to Los Angeles?
You’ll also need to decide whether to try to offset ownership costs by allowing a charter company to charter the aircraft to third parties. Determining a realistic estimate of costs that charter revenue may offset is as important as realizing that charter revenue is unlikely to offset all the costs so that your flights are free.
Next, contact an aircraft broker with your information and ask if they provide a service to help you identify what type of plane suits your needs, the purchase price range and standard operating cost estimates, as well as the availability of that make and model of aircraft on the market at that time.
Because you will work closely with your selected broker, it is best to interview more than one aircraft broker to find who you feel most comfortable with. Ask each broker how they charge for their services, what services are included, how many aircraft they have brokered, if they have a written policy to avoid conflicts of interest and if the person you are speaking with will personally work with you on your acquisition. The business agreement with the selected broker should be in writing. It’s also good practice to obtain an independent legal review of the brokerage agreement.
What To Do After You Know the Cost to Buy a Private Plane
After you know the range of the purchase price for a private plane that suits your needs and the cost to operate that plane, you have the necessary information to decide whether to take the next step and work with an aircraft broker to identify a plane on which to present an offer.
Your aircraft broker will discuss the factors to consider before making an offer on a specific aircraft, including the plane’s pedigree, operational history, hangar location, damage history, number of owners, quality of records and the maintenance performed on the aircraft.
How Long It Takes To Buy A Plane
After you decide to buy a plane, if you have a specific timeframe in which you want to close on the purchase of the plane and have it operational, your broker must know this information at the outset. Whether the deadline involves taking the family on a special spring break trip or a tax deadline, this deadline may affect the aircraft you choose and the price you offer.
There are many parties involved in an aircraft purchase and delays can happen. Some planes will have recently completed a major inspection and the pre-purchase inspection may take a few days while other aircraft may require a three-week pre-purchase inspection followed by two weeks to repair any discrepancies identified during the inspection. Only one of those planes may fit your timeline and, therefore, the purchase price alone cannot be the sole factor influencing the acquisition of a plane.
Aircraft buyers are often surprised by the number of initial decisions involved when buying a private plane. Fortunately, using these guidelines to go beyond just asking the purchase price can result in a better experience, both during the acquisition process and when owning, operating and enjoying your private plane.
Please contact Jetstream Aviation Law for legal assistance with your next aircraft acquisition
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.
Michelle M. Wade is a Partner with the aviation law firm of Jetstream Aviation Law, P.A. and counsel clients on the acquisition, financing and operation of corporate jets operated under Part 91 and Part 135 of the US Federal Aviation Regulations. Jetstream Aviation Law can be found at www.JetstreamLaw.com. Michelle Wade (email@example.com)