Is Owning a Private Jet a Sensible Investment?

Without question, having your own private jet is one of the most aspirational things to aspire to. Owning a private jet is often associated with luxury, status, and convenience.

The allure of bypassing commercial flights, having control over your travel schedule, and enjoying unparalleled privacy is undeniable. However, even if you have the financial strength to consider the option, the question remains, is owning a private jet a sensible investment?

While private jets offer undeniable advantages, the financial and logistical considerations are significant. For many, the fractional jets ownership model provides a compelling alternative, offering many of the benefits of ownership without the hefty upfront costs and responsibilities.

Let’s explore the pros and cons of private jet ownership and look at why fractional ownership might be the better option for some individuals and businesses.

The Appeal of Private Jet Ownership

Owning a private jet is the epitome of convenience and luxury. There are numerous valid reasons why it’s so attractive to high-net-worth individuals and businesses.

Private jets allow you to bypass long security lines, crowded airports, and rigid commercial flight schedules. You can travel directly to your destination, often landing closer to your final location thanks to access to smaller regional airports.

Private jet ownership delivers unmatched privacy, making them ideal for business executives, celebrities, or anyone seeking discretion. The cabins can even be customized to include luxury amenities like full beds, state-of-the-art entertainment systems, and gourmet kitchens.

You are also in control of your travel itinerary. You can depart at your preferred time, adjust schedules on short notice, and even travel to multiple destinations in a single day.

There is also the aspect of brand image in a corporate setting. For businesses, owning a private jet can enhance their brand image, signaling success and exclusivity to clients and stakeholders.

The Costs of Owning a Private Jet

While the benefits are undoubtedly impressive, the costs associated with private jet ownership are substantial. It’s essential to consider these expenses before deciding if it’s a sensible investment:

The upfront cost of a private jet can often be a long way north of $3 million, depending on the size, range, and features. It is also worth highlighting that private jets are not immune to depreciation. In fact, it’s estimated that a jet can lose as much as 10-15% of its value per year, making it a poor investment from a resale standpoint.

Operating Costs

Operating a private jet is expensive and some of these costs include –

Fuel – Costs vary based on jet size and flight distance but can easily reach thousands of dollars per flight.

Maintenance – Routine inspections and repairs are critical for safety and can easily cost between $500,000 to $1 million annually.

Don’t forget that there will be crew salaries to pay.  Pilots, co-pilots, and flight attendants must be hired, with salaries and benefits adding up to hundreds of thousands per year.

Insurance is another serious cost consideration. Coverage for liability, hull damage, and other risks can cost between $30,000 to $500,000 annually, depending on the aircraft and usage.

Storage and Fees

Storing your jet in a hangar can cost anywhere from $10,000 to $100,000 per year, depending on location. On top of that, you will have to pay landing and parking fees. Airports charge fees for landing and parking, which vary widely based on location and jet size.

Is Owning a Private Jet a Sensible Investment?

As you can see, the annual cost of owning a jet is very significant. The answer to whether ownership is viable largely depends on your travel needs, financial situation, and willingness to bear the associated costs.

For some high-net-worth individuals or corporations that frequently travel long distances, owning a jet may make sense as a convenience rather than an investment. However, for most people, the steep costs and depreciation make full ownership financially impractical.

Fractional Jet Ownership – A Viable Alternative

For those who want most of the main benefits associated with private jet travel without the financial burden of full ownership, fractional jet ownership offers an excellent solution.

What Is Fractional Jet Ownership?

Fractional ownership allows you to buy a share of a private jet, similar to owning a timeshare property. Your share determines the number of hours or days you can use the jet annually.

Advantages of Fractional Ownership

The cost savings compared to outright jet ownership can be substantial. Instead of spending millions on a full jet, you only pay for the fraction you need. A typical entry point for this sort of scheme will be much lower than outright ownership.

Another obvious advantage is that you will be sharing operating costs with other joint owners. Maintenance, storage, and crew expenses are divided among all owners, significantly reducing your financial burden.

Enjoy Access to a Fleet

Many fractional ownership programs give you access to a fleet of jets, allowing you to choose the best aircraft for each trip based on your destination and passenger needs.

That level of flexibility should not be underestimated. Being able to use a jet that is specifically designed for short or long haul flights can make a big difference to costs.

Professional Management

The fractional ownership provider handles all aspects of jet management, including maintenance, crew scheduling, compliance, and logistics. This takes all of that hassle away from you and gives you the assurance that your jet is fully compliant at all times.

Predictable Costs

With fractional ownership, costs are transparent and predictable. Owners typically pay a fixed monthly management fee and an hourly usage rate, making budgeting easier.

No Depreciation Worries

Since you don’t fully own the jet, you’re not impacted by depreciation. When your ownership term ends, you can renew, upgrade, or exit the program without worrying about resale value.

Flexibility

Fractional ownership programs often include perks like guaranteed availability, short-notice bookings, and flexibility to use jets at multiple locations. You might not have exclusive access to a jet, compared to outright ownership, but you can still enjoy a good level of flexibility.

Owning a private jet is a statement of luxury and convenience, but it’s an option that needs to be considered carefully, due to the high costs and depreciation. All things considered, for frequent travelers who value efficiency, privacy, and flexibility, fractional jet ownership offers a compelling alternative.