So you want to buy a private jet…January 23, 2018
Anyone who frequently enjoys the resplendent luxury of private aviation has, without fail, found themselves at one point or another wondering what it would be like to have an aircraft all their own.
Sometimes it’s as soon as the moment they first step aboard their chartered jet — their favorite show already on the television, their favorite meal on the menu — sometimes it’s days, even weeks, after a private flight that the lingering notion preternaturally compels them to Google around, just to see, what it would actually take to make their aviation aspirations a reality.
Because let’s face it, buying a plane is a slightly more complicated process than simply handing over a check in exchange for a pair of keys…
Between the quirky set of financial rules and the slew of federal regulations (not to mention the esoteric technologies and aviation lingo), purchasing — and, equally important, maintaining — one’s own aircraft can feel more like setting up a small second business than buying a large, expensive tangible good.
Moreover, if done wrong, that fancy new private jet can turn into a money pit in no time…
Fortunately, with over 25 years in the industry, we here at Aircraft Service Group know everything there is to know about the acquisition, management, and maintenance of private aircrafts — and we’re here to help.
So if you find yourself habitually typing “buying a jet” in search bars late at night, feel free to reach out to us; our team of experienced pilots, skilled maintenance technicians, knowledgeable dispatch and concierges, and financial professionals are on-call and ready to help craft a customized, comprehensive strategy for you, tailored to the last aspirant whim.
In the meantime, here are a few things to keep in mind when hunting for your first aircraft…
Know the “pedigree” of your potential plane.
Much like when shopping for one of man’s best friends, it’s vital to know the “pedigree” of your potential new plane.
That means finding out…
- where it lived and how it was housed (avoid the hot, salty air of Louisiana in favor of dry, clear Arizona)
- where — and who — took care of it (dig through the logs to ensure everything is accounted for!)
- how it lived its life (was it a corporate chariot, or a charter horse flown to generate revenue?)
Just remember, while it may sound counter to one’s intuition, the worst thing for an airplane is to sit stagnant. It’s a giant piece of machinery, and machines need to be used at least every once in a while to remain in peak shape.
It’s all about maintenance cycles.
Above all else, know what phase of its maintenance cycle your would-be aircraft is in, as heavy items typically come due based on calendar and usage, causing a large fluctuation in the value of individual aircrafts even if they’re the exact same model.
For instance, a seller may tell you that he sold his plane for $1.7 million; yet neglect to mention spending $700,000 on maintenance right before the sale went through…
On a related note, when doing your research, don’t ever assume you know for sure how much another buyer paid for a similar plane. The community of aircraft buyers and sellers may be relatively modest in size, but accurate information about past sales is still difficult to come by.
Inspect everything. Even the inspectors.
It doesn’t matter who you are buying your plane from or how well (you think) you know them, insist on a pre-buy inspection — and at a certified 145 repair station.
Because it’s not just about getting the tires kicked and the engines checked; it’s about examining the litany of flight logs and the paperwork, as well as scouring the engine programs and/or logs.
Think of it like the aviatic form of saying, “Show me the Carfax!”
Consult a tax attorney.
The recent changes to the tax code may specifically incentivize the purchase of an aircraft, yet like any major asset or estate, proper planning needs to take place before the actual purchase of your aircraft in order to best reap the financial rewards.
Do yourself a favor, and make an appointment with an aviation tax attorney (we have several practices we can refer you to).
To get the most of your aircraft, you have to be dedicated to thinking long-term.
When shopping for one, that means being patient and waiting for the right aircraft, at the right price, at the right part of its maintenance cycle to come along. After the purchase though, it means working with a management company who employs a team of dedicated aviation accounting professionals who can create a full operating budget, monthly reports, and yearly forecasts for you.
Chartering as a revenue stream.
Anyone who says you can actually make money chartering your plane is full of sh…elled peanuts.
However, if done properly, you can expect to alleviate a large portion of your fixed costs, thus bringing your owner utilization rate down substantially.
Look for a management company with an in-house charter sales force, whose sole job will be to keep your plane in the air — and generating revenue — when you’re not using it yourself.
To learn more about how we can help serve your private aviation needs — whether it be jet sales, helicopter sales, or a custom ownership plan — feel free to reach out to us via the contact form at the bottom of this page.