Private Jet Ownership Costs
While private jet travel will never be more cost effective than commercial flights, your time has value and the time you gain avoiding the TSA lines and going direct to your destination is priceless. New private aircraft such as the Embraer Phenom, Citation Mustang and Nextant 400 are all driving down private jet prices with their efficient flight costs as compared to existing models. The volume of private jet flights and executive jet charter within EFI's client list allows our aviation specialists to offer private jet prices at lower rates than elsewhere in the market.
Jet-pooling or purchasing by the seat is not something that EFI offers or endorses. Many private jet companies have come along offering seat-buying programs as a way to cut private jet prices. Invariably however, these companies have gone out of business leaving clients with nothing to show for their deposits.
Many private aviation companies offer jet membership, or block-time cards. Sometimes these will be approved re-sellers of unused fractional shares, or charter brokers who make arrangements with charter companies who sell blocks of time to them, at a discounted rate. These flights still need to be conducted under FAA mandated ‘charter rules and regulations’ (FAR part 135) SkyCards do not offer the shared depreciation that come with fractional models. The occupied rate charged against a card, or an account of block-time.
Just How Much Does a Private Jet Cost to Hire or Buy?
You may be wondering how much does a private jet cost as you’re looking to buy or hire one of these fantastic pieces of modern technology. Costs vary enormously based on the type of private jet that you desire, size and complexity. If you are in the market for chartering or purchasing a jet for yourself or your company then read on and we will address your question.
Costs of Hiring or Chartering a Private Jet: Many companies these days are reconsidering the necessity of purchasing a private jet outright. Not only is the initial purchase price a very high fixed cost, but the ongoing costs are sometimes a bigger consideration. Even without actually flying anywhere, jets cost a huge amount just to keep them serviceable and in keeping with all of the certificates of airworthiness requirements. Ongoing costs to consider include regular (and any unforseen) maintenance, hangar space, pilot and crew salaries, insurance and more. Private jet chartering eliminates this additional cost and complication, as companies hiring a jet can just pay on a ‘per flight’ basis, rather than paying for the aircraft to sit on the ground when not in use.
Private jet hire companies typically operate on a bespoke quotation principle, where you contact them to discuss your requirements in terms of type of jet, passenger numbers, distance of journey etc. and they will supply you with their best quote. Quite surprisingly there are even private jet broker websites that operate in a similar way to a regular flight booking website by searching for prices among other private jet companies.
Hourly Jet Hire Rates: The hourly rate that a jet would hire out for depends on its size. They tend to be classified into three different size categories, these are ‘light / small jets’, ‘medium / Mid-size jets’ and ‘fullsize / heavy’ jets.
Purchasing a Jet (an example jet): A new Skyhawk can cost anywhere between $38 and $43 million brand new, depending on the upgrades you add at the time of purchase. On the other hand, a pre-owned model will typically cost you anywhere in the $14 million to $35 million range. A significant variance, depending on the flight hours, upgrades and features that are on the aircraft.
Maintenance And Operating Costs: With the G450 all we had to worry about were fuel, oil, engine reserves and landing fees. But now we have crew salaries and benefits including a flight attendant. And once you’re flying with an aircraft of this size, a lot of other fixed and variable costs come into play such as APU allowance, navigation chart service, computer maintenance and catering, to mention just a few. Let’s not get bogged down in details and just say that our total cost of ownership per year, for a Gulfstream®G450 is roughly $4 million. This is based on 423 hours of usage per year. This does not include insurance or parking which I’ve broken out separately to go along with my Cessna 172 analysis.
Insurance(s): Let’s figure hull insurance at $34,520 and "single limit liability" at $12,500 for a rounded total of $47,000. However, it’s important to note that insurance can increase based on several factors not limited to average flight hours, age of the aircraft and more. And, as the jet gets bigger and carry a higher payload, you can almost count on a larger premium.
Hangar vs tie down: Well, clearly you’re not going to leave our multi-million dollar investment out in the rain — or, here in Arizona, in the sun—so we can count on a hangar fee of around $81,000 per year. If you want to park your plane at a large, international airport, such as Los Angeles International Airport (LAX), you may pay closer to $160,000 a year or $12,000 a month.
Upgrades/Add-ons: The amount of upgrades offered in the aerospace industry are almost limitless with options to change out almost every product on your plane. Considering Honeywell’s extensive portfolio of next-generation technology, we can add satellite communications, in-flight connectivity solutions such as JetWave™, a cabin management and entertainment system like Honeywell Ovation™ Select cabin management system, the SmartView™ synthetic vision system and more.
And although they’re not ‘aesthetic’ upgrades that you and your passengers will get excited about, it’s important to count the equipment you’ll need to cover the ADS-B Out, FANS 1/A and other mandate requirements that are coming up before the Dec. 31, 2019 deadline.
For the Skyhawk we allowed $5,000/ year. But for our Gulfstream and other business aircraft alike andre Fodor of Avbuyer.com suggests it could be different every year depending on how you fly. After all, we haven’t covered the cost of paint, furnishing your aircraft and other cabin-related upgrades that will make our transatlantic flights that much more comfortable. To be conservative, let’s budget $100,000 to $500,000 a year to cover upgrades.
All totalled, you can figure an initial purchase price from $14 to 43 million and annual costs of $4,628,000.
As you can see, there are several options for those fortunate enough to purchase an aircraft of this caliber. Whether you purchase new or used is clearly a matter of personal preference and budgetary constraints. For more information on owning an aircraft please visit faa.gov.