The costs of owning a business jet should be given as much, if not more, consideration as the purchase price. The expense of owning and operating an aircraft can be divided into two areas - fixed jet/aircraft costs and variable jet/aircraft costs. The expense associated with maintaining, storing, and operating a business jet can be significant, and seemingly complex to a first-time buyer. Private jet owners who do not gain at least a basic understanding of how these costs are calculated, and which costs are necessary and which are optional, will pay significantly more than jet owners who take the time to educate themselves. Generally, high-profile celebrities, top-class business executives and athletes, politicians and musicians are the ones who can afford private charters.
Private jet prices are reasonable - considering the uninterrupted access to first-class facilities. Compared to booking seats via commercial aviation companies, the services of a private aircraft operators like EFI appears to be affordable only for the rich and famous. Here are two factors that go into costing private jet prices: Aircraft range and size. The range, or the distance that an aircraft can fly during take-off until landing, is a major factor in the cost of private jet rental. This is due to the amount of fuel necessary during the entire operation. Usually, a bigger aircraft (with a higher passenger capacity) can reach a higher range. And the aircraft’s higher range, the costlier the rental.
Another factor is the aircraft size. Because it offers more room, a bigger aircraft is preferable for more convenience. Usually, a bigger aircraft (with a higher passenger capacity) amounts to a higher cost.
Fixed Capitalization Costs: This is the purchase or lease amount for the aircraft - including interest. Fixed costs are items calculated monthly or annually and include pilot salaries and training, aircraft manager, hangar and insurance etc. Depending on the make and model, fixed costs can be anywhere from $50,000 per year for a smaller jet like the Cessna Citation Mustang, to over $500,000 per year for a larger long-range jet such as a Gulfstream G550 or Bombardier Global 6000.
Hangar: Executive Fliteways will arrange to have the aircraft stored in our secure, heated hangar with 24-hour operational access. These costs vary with aircraft size and airport location.
Aircraft Insurance: Executive Fliteways aircraft are maintained on a fleet policy, which provides the most comprehensive coverage available in the aviation insurance industry. Two components of insurance, hull coverage and liability, are required and the limits chosen will determine the costs. Hull coverage is determined by the assigned value of the aircraft and we recommend a minimum liability limit of $100 million.
Flight Crew: Executive Fliteways will screen, interview and conduct background checks of flight crew candidates. These individuals will be presented to the client for final hiring approval. The costs for flight crew hiring, screening, drug testing, uniforms, communications, salaries and benefits vary with the type of aircraft and crew position.
Flight Crew Training: Executive Fliteways conducts ground, flight and simulator training for all crew members. We are firm believers in the philosophy of Simuflite, the company that provides our simulator training ? ?The best safety device in an aircraft is a well-trained pilot?. Our program at Simuflite requires initial and annual recurrent training, and the costs vary with aircraft type, crew position, and phase of training.
Management Fee: Executive Fliteways provides a variety of administrative services that are covered by this fee. They include scheduling aircraft, coordinating maintenance, dispatch, accounting, FAA compliance monitoring and record keeping, sales and marketing of the charter aircraft and the preparation of monthly management reports. The amount of the management fee varies with the size and complexity of the aircraft, as well as the amount and type of flight activity.
Maintenance Subscriptions and Navigation Data: We will ensure that your aircraft is equipped with the charts, maps and approach plates required to navigate the aircraft as well as any and all maintenance and service manuals. This includes computerized maintenance tracking as well as the computerized or online updates for both the navigation systems and maintenance bulletins. The cost will vary as to the extent of the geographical regions covered. In addition, any manuals required for the aircraft operation or pilot training are provided.
Aircraft Stock and Supplies: The aircraft are stocked with standard beverages and snacks. The owner may choose special items to be stocked for his own trips.
Miscellaneous: These items or services are billed on the monthly management statement and may include special owner requests, one-time fees, or services outside the normal scope of business.
Variable costs are the expenses associated with the operation of the jet and is calculated by the hour. Variable costs include items such as fuel, maintenance, inspections, engine programs, crew hotels and meals, landing fees, parking, etc. These costs typically range from $1,000 per hour on a small jet like an Embraer Phenom 100 to over $10,000 per hour on larger aircraft such as a Global 5000 or Gulfstream G650ER.
Average Cost per Flight Hour: The total flight hours is the length of time an aircraft operates – from takeoff to landing. Private jet operators charge rentals based on their per-flight hour rates. Your "meter" starts when the aircraft starts running. Depending on what you intend to do or where you are flying off to, you might be surprised that you can actually afford a private jet rental.
Fuel: The fuel consumed by the aircraft varies with the size and type. The price per gallon varies with location, and we make every effort to negotiate fuel price in advance or to pre-arrange contract fuel at many airports.
Aircraft Maintenance and Parts: All maintenance is performed under the supervision of our Director of Maintenance, either in-house by our mechanics, or at specialized outside vendors. Owners are made aware of major maintenance for their budgetary and scheduling purposes and are provided with a detailed report each month of all work performed on the aircraft.
Engine Reserve: Since jet engines have a limited number of hours before they require major maintenance such as overhaul, each hour of flight incurs an accrued amount for this expense. Certain companies have created engine insurance plans that allow the owner to pay ?by the hour? for these costs.
Examples are Executive Fliteways' EMS program: The high costs of jet engine repair and overhaul make these programs recommended. The hourly rates of these programs are determined by engine type and manufacturer.
Charter Fee: This is the amount paid to Executive Fliteways for each charter flight, as a percentage of flight hour revenue. This charge does not apply to Part 91 (Owner) flights.
Crew Hotels, Meals and Travel: These are the expenses that are incurred by the crew while out on trips. The owners of aircraft pay the actual costs.
Catering: Food service requested by charter customers are associated with that charter flight. Food services requested by aircraft owners are billed at actual cost to the aircraft owner.
Landing and Parking Fees: These costs are billed to the owner as incurred on each flight.
Aircraft Cleaning: Most of the cosmetic maintenance of the aircraft is handled at home station. This includes exterior wet wash, dry wash, lavatory service, carpet shampoo, polishing of bright work and the cleaning of the interior cabin. Costs for cleaning vary with size of the aircraft and services provided.
Oil and Other Shop Materials: These consumables, which include turbine oil, hydraulic fluid, aviator?s oxygen, nitrogen, TKS fluid and methanol are provided as required.
Occasionally, additional costs for the safe and timely operation of a flight may arise. These may include off-station hangar space during inclement weather, de-icing of the aircraft, international fees, international handling, customs' fees, and over flight permits. These costs are billed to the owner as required.