At What Point Does Buying a Jet Make Sense Over Chartering?
Private jet charters are a popular method of air transportation for business and leisure travelers. They provide all of the perks of flying privately, without having to commit a large sum to the initial acquisition, or to subsequent maintenance. However, there comes a point where buying a jet might make more sense for some. In many instances, the decision will hinge on a combination of aircraft availability, convenience and, of course, money.
There are a couple of trends occurring in the jet rental market that are causing some charter consumers to consider jet ownership more seriously. First, the demand for private charters is approaching all-time highs. There is also an increase in the number of shared-use models at the moment (i.e. fractional and joint ownership).
This increase in demand not only limits the inventory of available aircraft for hire, it can also drive up the cost of chartering a plane. Here are some other reasons why private aviation consumers might consider buying a jet.
Frequency of Travel
From a financial standpoint, there’ll come a point where it’ll simply make more sense to buy a private jet than to charter one based on how often you fly. For example, if you’re routinely spending more than $250,000 annually on jet charters (or you’re flying X number of hours a year) you’re approaching a threshold where the cost of ownership might actually save you money.
Of course, there are other factors that will affect this decision:
- Personal finances
- Buy a new or used jet
- Type of aircraft
Urgency of Travel
If you travel both spontaneously and to different locations, the convenience of owning a private jet might make sense. Or, if you frequently travel to remote areas or centers that are underserviced by commercial airlines, ownership might also be worth considering. That’s because your aircraft will always be ready when you are.
Familiarity and Convenience
There’s something to be said for knowing what to expect from a private jet. With ownership, you know exactly what you’re getting, and you have the freedom to configure your cabin environment to your personal taste, including:
- Layout and décor
- Office equipment
- Entertainment systems
- Updates to the latest cabin technology (wi-fi, satellite phones etc.)
You’ll also be familiar with the aircraft’s performance capabilities, which assists in planning flights to meet your scheduling needs. And if you retain the same crew, there’s further reassurance.
Favorable Tax Codes
Recent changes made by the federal government’s 2017 Tax Cuts and Jobs Act, have made buying a jet more appealing, as it qualifies owners of both new and used jets for 100 per cent bonus depreciation of their assets. Combined with the current low interest rates, now is an opportune time to buy.
If you’re considering buying a jet and would like assistance with managing your asset efficiently, call Stratos Jet Management & Consulting at (407) 657-5001.
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