To Own or Not To Own

Industry rules of thumb suggest that aircraft users with an annual need for up to, say, 50 flight hours typically charter. From 50-100 flight hours, a block of charter time is best perhaps purchased at a negotiated rate.

From 100 to 200 hours, joint ownership, co-ownership or a fractional share may make the most sense, with full ownership often being most appropriate above 200 or more hours annually.  

Nevertheless, it is clearly true that many private users are in the position to make the decision whether to own an aircraft or not based purely on their own personal needs and requirements rather than a rigid application of an estimation of the number of flight hours to be operated.

When asked by a prospective purchaser the cost of operating a new private jet, one aircraft salesman was heard to say,
“A couple of million dollars for the first hour, thereafter a couple of thousand bucks an hour”. This is simplistic but valid assessment of the principle. The true overall cost per hour reduces significantly with each hour flown.

The typical annual utilisation for a privately owned and operated corporate jet aircraft is between 300-800 hours. Utilisation projections can be used to establish an approximate budget for planning purposes, however fixed and variable costs should be identified separately. The fixed cost is the facility or opportunity cost, i.e. the ‘cost of the first hour’. The variable cost is the actual cost of use, i.e. the cost of each subsequent hour.

A personal aircraft provides the opportunity to dictate that the highest possible standards of safety, security, flexibility and on-board service are constantly assured. 

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