Private Aircraft Supply and Demand
Historical perspectives show that the supply of private aircraft is very high. However, the current soft demand has caused the prices for preowned private aircrafts to plummet to an all-time low. Private aircraft manufacturers are offering buyers great incentives right now, even though they want to keep their operations running at full capacity. These recent trends have led to a slight increase in private jet sales, as buyers take advantage of oversupply. Industry professionals and aviation consultants have noticed a rise in private plane buyers who are first-time buyers. This is due to today's low prices on private jets.
Financial benefits of ownership over chartering or fractional ownership
How does one decide which option is best for them? Three factors are important when deciding whether to purchase a private plane with aircraft renter insurance: financial, operational, and status. The status question is completely personal and can only be determined by the individual. The financial issue is about the potential savings in travel costs and tax benefits of ownership as compared with alternative methods of private flight travel such as charters, fractional ownership, or jet cards - currently used by the buyer.
Private ownership for operational reasons
Owning a private plane can be more than just about the status and cost. It's an option that is preferred, even though it may be more costly than other options. Let's take a look at each.
Financial considerations
Private travel is possible through air charter or jet cards. Once you have flown more than 200 hours per year, it is cheaper to purchase and use your own plane than to charter, use a jet card or fractionally own the jet.
However, calculating the cost of ownership is not as simple as determining how much flight time you have and how much hourly. Economic factors such as the type of flying, where you fly, and the number of passengers on the aircraft all play a part in the cost of ownership. Ownership is more cost-effective if you fly primarily round trips. This allows you to avoid deadheading fees, multi-day ground handling fees, and the cost of airline tickets home and back. A fractional ownership share, or a jetcard, could be better than full ownership if you only fly one-way. This is because fractional and jetcard costs are based on one direction flights.
Private ownership is possible if you use the same type of aircraft for at least 80 percent. If your mission is constantly changing, and you travel long distances on certain aircraft, but not on others, or with just a few colleagues, it may not make economic sense to buy a private plane. Because one type of aircraft will not be able to meet all of your travel needs. Charter might be a better option in this situation, as you can choose the best aircraft for each flight. A fractional ownership program or jet card allows customers to choose from three to four aircraft types (light, medium-size, supersize, large cabin/long-range jets), and can use multiple aircraft at once. This is a great option for those who require access to many aircraft types.
When you think about owning a private plane, don't just focus on the flights that you are currently making. Consider the many ways your company could benefit from an aircraft, such as to visit clients, prospect for new business and manage far-flung business operations. If you find yourself in a situation where you are missing out on many opportunities, don't be surprised.