Private Business Jets - Jet Charter or Fractional Ownership?
| Private executive jets give the business traveller some great advantages over the standard scheduled airliner. This includes more flexibility, better time management, privacy and security - and of course no missed or cancelled flights. |
While the corporate jet option is not for everyone, business travellers who normally fly first class are switching over in ever greater numbers. For those not wanting to purchase or lease a business jet outright there are 3 cost effective options...
1. Executive Jet Charters - Consider how often you need to use a private jet and how many people need to fly. For those who fly less than 10 hours per year, single use jet charter is probably your best bet.
In effect this is just like renting a car – jet rentals are available from either a private jet broker (such as AirCharterTeam or StudioJet) or directly from a charter jet operator (such as OneSky or PrivatAir). Obviously the larger the aircraft, the more expensive will be the hourly rental cost.
Let's take a look at the likely hourly cost of hiring an executive jet:
Light
Executive Jet
LearJet 35 - 7 passengers (1,900 mile range) $1,800/hr
Midsize
Executive Jet
Hawker 800XP - 8 passengers (2,700 mile range) $2,700/hr
Heavy
Executive Jet
Gulfstream IV - 13 passengers (4,500 mile range) $5,200/hr
At the top end, a Boeing Business Jet or Airbus A319CJ can cost upwards of $10,000 - $15,000/hr.
In addition, ensure you check for any extra costs - empty leg charges, airport fees, catering and also how the time will be calculated - how much taxi time will be included for instance.
Because of the empty leg cost, jet chartes are more economical when flying on a day return. With the introduction of Very Light Jets into the marketplace, jet charter fees are set to become more competitive.
2. Fractional Ownership - For those flying between 50 and 500 hours per year it becomes more cost-effective to enroll in a fractional ownership program. This gives you access to a specific number of hours in a jet over 12 months - you are able to book on a few hours notice. The biggest company in the industry is Netjets - owned by Warren Buffet's Berkshire Hathaway.
NetJets fractional shares start with 50 hours per annum or a 1/16th share. For a Raytheon Hawker 400XP this will set you back $406,250.
Please note that you will have to pay a monthly management fee - in this case $11,640 or annually $139,680 - and an hourly occupancy fee of $1,554 (so your 50 hours will cost $77,700).
So
the total annual cost will amount to $623,630.
(Don’t forget miscellaneous
taxes and charges will also crop up depending where you fly)
The Hawker 400XP has a capacity of 7 passengers, so at full capacity we are talking about $1,782 per passenger per hour.
Fractional ownership means you avoid the empty leg charges. So if your travel itineraries includes flying out somewhere, staying a few days and coming back, then fractional ownership will be more economical than jet chartering.
The NetJets fractional share contract lasts for 5 years, after which you can sell your share back to NetJets.
3. Block Hours - Block hours are useful for those needing 10 - 25 hours annually.
Netjets have an introductory discount scheme for those not needing 50 hours. Their Marquis Card lasts 2 years and will allow you to have 25 hours flying time (at 10 hours notice) – this costs from $115,900 for the smallest aircraft, the Cessna Citation V Ultra. Bombardier Aerospace subsiduary Skyjets also offer block hours with a minimum of 25 flying hours.
If you fly more than 500 hours per annum then purchasing the jet outright is probably more economically viable. Always undertake a full financial analysis with a qualified professional before purchasing any form of private jet.
Air Travel Articles & Resources > Private Jets Resources > Jet Charters vs Fractional Ownership
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