Plane Conversations

Why Own a Private Jet?

In previous posts I have compared the cost of ownership of private or corporate jets with the cost of chartering a jet from an operator.  From a purely economic standpoint, jet ownership for a company or individual may not be cost-effiective unless utilization hits a level high enough to spread out the fixed cost of ownership.   Even in low-utilization situations there are certain scenarios where ownership makes sense.  Is there a magic number of annual flight hours you must hit before you can justify owning the aircraft? Not necessarily.  It varies within each situation depending on capital or acquisition costs of the asset and other fixed costs, as well as the availability of suitable aircraft in the immediate area to lease or charter.

So, why do corporations and individuals buy jets when they could charter or rent?

Companies that travel on short notice and require guaranteed access to aircraft are good candidates for ownership.  If your clients need you right now and are willing to pay for your time, then you need the jet when you need it, not when someone else may get it to you.  There is a premium to pay for this convenience, but if it is an integral part of delivering whatever service you are providing, the premium is justifiable.

If you follow the adage of “working where you have to and living where you want to,” you might find yourself in an area of the country where there is neither airline service nor aircraft charter service.  In that case, access to any kind of air travel is only going to happen when you own an aircraft. There are more corporate aircraft located out in small town America than most people would think.  Some people just do not want to live in the big city.  Go figure.  If you are a business located in a micro-urban area, the corporate aircraft may be the only way to get to other markets. The trade-off may be higher transportation costs off-set by the lower general operating costs of doing business in a small town.

Companies and individuals also own aircraft for reasons of security and privacy.  If you own your aircraft, you have total control over who flies in it, when they fly and where they go.  You also have total control over who is flying and maintaining your aircraft.

Last, but not least, you might own the jet just because you can.  A lot of criticism comes from the have-nots against the haves, especially when it comes to flying around in the private jet.  Is it excess or is it simply exercising your right to spend your money as you see fit?  As Oprah Winfrey noted in her commencement speech at Duke University, “It’s great to have a private jet. Anyone that tells you that having your own private jet isn’t great is lying to you.”  If you have earned your money in a free market economy, you deserve to spend your money how ever you want.  I can understand the outrage over companies that used their big, private jets to go to Washington, D.C. and ask for a bail-out funded by our tax dollars.  However, I see no reason or logic in critizing successful entrepreneurs and business people just because they have earned good money and want to spend it on private jet travel.  I hope our country never gets to the point where the government tells us how to spend our money just to appease the masses.

In the end, there are many factors to consider when choosing whether to own an aircraft or to charter one:  Will your usage of it justify the costs?  Do you need to travel with little or no advance notice?  Given your location, do you even have other options?  Do you need the control over equipment quality and pilot experience?  Or, have you worked hard all of your life and see private jet ownership as a just reward?  Only you can answer those questions and determine if, despite what the casual observer might think, aircraft ownership makes sense for you.

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