Can you make money owning your own jet

Microsoft founder Bill Gates had been a billionaire for over a decade before he bought his first private plane. Private jets have symbolized extravagance since the dawn of air travel—the stuff of billionaires, celebrities and spendthrift Fortune CEOs. But as the Democratization of Everything has shown, even jet travel can shed the stench of excess. Thanks to lower-cost Uber-style jet charter businesses like Victor and private air shuttles such as JSX and Tradewind Aviationwhose growth have coincided with the rise in jet usage and ownership, the experience of flying private has become more accessible, and its users less ashamed. Inthe industry surpassed 3 million flights for the third straight year, according to aviation data company Argus. Meanwhile, VistaJeta Malta-based luxury charter operator, reported in a study that the average age of private jet passengers was a younger-than-you-might-expect And there is no shortage of private jet packages offered by hotel companies seeking a piece of the pie: Four Seasons offers weeks-long journeys around the world on a customized person jet monej by jour operator TCS World Traveland Fairmont Hotels and Resorts recently launched cocktail-themed destination-hopping packages with Canadian can you make money owning your own jet operator AirSprint. Related How to Create a Private Foundation. But flying on a private jet and owning one are entirely different things. By most estimates, commercial fliers lose two hours each way. And it helps their executives be in multiple places on the same day. Contrary to the image odn the Champagne-swilling socialites that jet-setting influencers project on social media, most aviation companies actually market to business clientele by stressing the increased productivity resulting from private aircraft use.

5. Gulfstream G550

I recently received a call from a past client. The aircraft owner who is looking to reduce the cost of operating their aircraft, places the aircraft onto a commercial Part certificate. When the owner is not using their aircraft, it can be earning revenue by flying charter. You will generate revenue that will offset the cost of owning and operating the aircraft. The aircraft owner typically pays all the aircraft specific charter expenses such as fuel and maintenance. The excess of charter revenue over those expenses helps offset the fixed costs resulting in a net decrease in total cost to the owner. Charter rates in the US are very low relative to what these aircraft cost to operate. But there are fixed costs such as hangar, insurance, pilot fees, etc. If the owner paid cash, there is a cost of capital to the owner as they cannot invest this money elsewhere. Very, very few charter operators can generate that much revenue flying in a year. But, for the owner who flies infrequently or on a very fixed schedule, the revenues from charter can help reduce their cost of flying. They also get to use their aircraft about 25 times per year at eights hours per round trip.

How to Lead

The charter operator get the use of an aircraft without the large capital investment. The arrangement can be beneficial for both aircraft owner and charter operator, but only if both parties compromise, cooperate and communicate. If you are like many business aircraft operators, your aircraft is not being used as much as in the Log in.

Tell us a little more about yourself

Are you a frequent flyer? Do you find even airlines’ first-class service more frustrating than fulfilling? You can charter a jet , but the greatest freedom comes when you own one. Before you buy, though, you should consider whether the investment is truly justified. Much like used cars, private jets are subject to serious depreciation. If you are looking for a bargain, second-hand jets come much cheaper. Aircraft vendors will tell you that if you spend hours a year in the sky, it justifies the outright purchase of a private jet. Remember, they’re trying to sell you one. They, of course, are also trying to sell you something. An unbiased rule of thumb is that annual flight time of at least hours is required to achieve a reasonable operating cost for a private jet,. The type of travel you do might be even more important than air hours as a factor in this decision. Or, if you plan to remain at a particular destination for a week or more, the pilots, crew, and plane must be accommodated for the entire period of time or sent home.

Most Popular

As the number of extremely wealthy people worldwide has grown, so too has the market for private flights. Instead, rich people are turning to more economical means of private air travel such as fractional ownership of planes where you split the costs and title to the aircraft with a small group of other users almost like a timesharejet card membership programs where travelers typically pre-purchase a package of flight hours on a specific model of plane to be used by a certain caanand on-demand chartering think an Mohey service for private planes where you can book one on short notice.

In the U. Luxury travel expert Doug Gollan, who is also editor of travel gou Private Jet Card Comparisonsestimates that 25, to 30, people hold jet card memberships, versus 8, to 10, people who are fractional owners of private jets. Nevertheless, private ownership still represents most private air travel in the U.

Gollan added jdt the number of charter companies has doubled sincewhereas the number of firms offering owj ownership option has remained static. Charter and membership companies continue to attract a younger clientele. VistaJet, for instance, saw the average age of its passengers drop from 40 to 38 last year.

And millennials could be fueling this trend for years to come, experts said. Even the Queen of Pop must endure flying commercial: Madonna was spotted traveling in economy class while visiting her eldest son owinng the U. A private plane itself costs tens of millions of dollars to purchase. And private-jet owners will need roughly ten times that in net worth to afford the cost of upkeep, which includes storing the plane, hiring staff to operate and maintain it and redoing the interior as needed.

Private jet program members are 61 years old on average — and owners are even older, with an average age of 65, according to the VistaJet report.

This is in part because of the limitations of private air travel. Smaller planes may not be able to fly longer distances, meaning their owners may need to use an on-demand charter service or hold a jet card membership to be able to make those trips.

Economic Calendar Tax Withholding Calculator. Retirement Planner. Sign Up Log In. Home Personal Finance Travel. By Jacob Passy. Comment icon. Text Resize Print icon. Jacob Passy. MarketWatch Oen Center. Most Popular. Advanced Search Submit entry for keyword results. Berkshire Hathaway Inc. Alphabet Inc. Volume 2. Apple Inc. Volume Facebook Inc. Snap Youu.

Accessibility links

Pascucci’s accountant subsequently insisted that charter indeed covers all his costs-right down to the pretzels and peanuts-but we decided to talk to some industry experts to get their opinions. Is it really realistic for an aircraft owner to expect charter to offset all his expenses? Responses from those we interviewed ranged from highly skeptical to jef optimistic. Others, including Cyrus Sigari, president of the recently formed very light jet management company Jetaviva, took a more positive slant. Along with the fixed and variable costs of operating the aircraft, you must account for acquisition costs as well owm tax depreciation and any real depreciation.

Search form

Tax depreciation in particular is «a big part of the puzzle,» said Sigari. But while tax situations and aircraft depreciation vary widely ownn play crucial roles in determining whether you can achieve zero-net-cost flying, our experts agreed that you must follow certain ground rules to even have a shot at covering your ownership costs with charter revenue. Here’s what you must do: 1. Find the right management. If a company is aggressively marketing your aircraft can you make money owning your own jet its clients, [covering all your costs] is certainly achievable. Say goodbye to easy access. To maximize charter revenue, you’ve got to make your yoru available for customers as much as possible, which can be tough.