Business jets are no longer to the playthings of billionaires. For some businesses, they are valuable tools and, while not exactly cheap, they can be surprisingly cost effective. For example, a five-person sales tour of three European cities might take three days on scheduled airlines plus two overnight hotel stays thanks to check-in delays and inflexible airline schedules. Total cost: perhaps £7,000. In a chartered private jet, you could do the same trip in a day. Total cost: perhaps £11,000. Factor in the savings in salaries for the wasted two days and the opportunity cost of tying up key people for so long and it looks like a good deal. Besides the time efficiency, there is less stress – the plane waits for you, not the other way around. It is also more private, more secure and you’re not tied to the big airports. For example, around London you could fly from Biggin Hill, Southend, Northolt or Farnborough or London City.
The benefits are clear, but what about the costs? It depends on how you do it, how often you fly and how much you are willing to invest. There are four main ways to get airborne: charter, fractional ownership, hour purchase and outright acquisition.
Chartering a plane is just like booking a taxi. Ring up the operator and tell them where you want to go and when and they will quote you a price. For example, London Executive Aviation (www.flylea.com) has a range of planes from a twin-propeller Seneca all the way up to a Citation Excel jet. Prices range from £1,200 for a day return to Manchester in a light twin to £8,600 for a trip to Madrid in a top-end jet. Lynton Aviation operates a similar range of aircraft and also offers helicopters. Chartering is a good way to test the benefits of private aviation and is suitable for up fifty hours a year flight time.
Fractional ownership involves a capital investment to buy a share in a real aircraft and is more appropriate for companies using between 50 and 400 hours a year. The smallest fraction is usually 1/16th and since the smallest jet costs $4+ million, this is a significant investment. There are monthly management fees and you have to pay an hourly rate for the time you spend in the air. However, the benefit is that your share entitles you to access to the operator’s entire fleet so that you can have access to a plane on as little as four hours’ notice anywhere in Europe. Fractional ownership benefits from a network effect – the more people in the group, the better the service – and the biggest operator in Europe is NetJets. Warren Buffet bought the company in 1998 which is a mark of respectability, especially coming from a man who christened his first plane “The Indefensible.” NetJets have a downloadable guide to fractional ownership on their website.
An intermediate step between charter and fractional ownership is hour purchase through the Marquis Jet company. They buy large fractions in NetJets aircraft and then resell them in 25 hour packets, beginning at £80,000 for a seven-seat Citation Bravo. This works out at £3,200 per hour. Because these are hours on the NetJets fleet you get guaranteed availability on ten hours notice. There is no further capital cost, monthly maintenance, positioning charges or obligations.
Finally, you can buy your own plane. Expect to pay at least $4m for an entry-level CitationJet and prices go up to $55m for your own Boeing 737 with double bed, shower, kitchen, office, dining room and a dozen first class seats. Ownership becomes increasingly viable above 400 airborne hours a year, but there are significant costs and hassles involved, some of which can be subcontracted out. The US-based NBAA has a good guide to setting up a corporate aviation department on their website.
Finally, if this is all a bit too pricey, Cabair will sell you an hour’s trial flying lesson for £130 and you can fly for yourself!
– Matthew Stibbe is a freelance journalist and pilot.
Lynton Aviation, www.lyntonaviation.com, 01582 437 800 (Helicopters: 01895 830 900)
London Executive Aviation, www.flylea.com, 01708 688 420
NetJets www.netjets.com, 02073 619 620
NBAA, www.nbaa.org, (202) 783 9000
Marquis, www.marquisjet.com, 02078 380 960
Cabair, www.cabair.com, 02082 362 400