Friday, 9 November 2018
Raise your hand if you hate long airport security lines, long layovers in random cities, lost luggage, and spending an entire day traveling from one side of the country to the other. All of you?
You aren't alone, and there is good news: the private flying industry is experiencing a renaissance. There are now dozens of companies offering a myriad of ways to fly private, from membership cards and fractional ownership shares to charters, apps that let you secure seats (a little like Uber), and the outright purchasing of jets (not as expensive as you might think).
Brian Foley is an independent aviation analyst with more than 35 years of experience, and has been watching this dramatic shift in the private jet market. “In the past, you had to own a jet to experience private aviation, then you could charter one, and then there was the advent of fractional ownership, which operates sort of like a condo timeshare," he says. “Those were your only choices from 1965 to 2000, but now there are more ways than ever to fly privately."
Which style of private travel is right for you? Here's a brief breakdown of the options.
For those of you skittish at the concept of buying your own airplane, it makes sense to give the app version of private jets a try. Dozens of companies now allow interested parties to apply for a membership to gain access to seats on private planes. JetSmarter is one such company. You can either pay for an available seat as you go or purchase an annual membership for $9,000 (in addition to an initiation fee), granting you unlimited access to pre-planned routes on private planes.
Another option is the Marquis Jet Card with NetJets, a longtime company in the private flying industry, which has a variety of options from fractional ownerships to leases. The Jet Card allows fliers to purchase 25 hours of flight time at once and then book seats on pre-planned private jet routes. The cost of these 25-hour cards varies wildly depending on the type of aircraft you're interested in and can run anywhere between $120,000 to upwards of $360,000.
There is an argument to be made for purchasing an entire aircraft, and Janine Iannarelli is a trusted voice for this reasoning. As founder and president of Houston-based Par Avion Ltd., she's worked as a private jet broker for more than 32 years, selling airplanes to a variety of clients domestically and internationally. While she has also witnessed the rise in popularity for seat-finding apps, it makes her somewhat uncomfortable.
“I'm not a fan of it," she says. “The premise of owning an aircraft is knowing who you hire and fly with. I would never get in an airplane with a stranger. Whole airplane ownership is for people who want to control their destiny. They want to be responsible for employing people they trust and have confidence in."
Iannarelli says it makes sense to look into purchasing a full aircraft if you are already chartering more than 150 hours per year. Prices for airplanes can vary wildly depending on the size and age of the aircraft. A small jet (five or six passengers) that travels short distances and is less than 15 years old might run $1.5 million to $3.5 million, whereas a midsize jet may cost $10 million to $12 million, and a large jet with a large cabin could range from $12 million to $25 million.
It pays to hire a qualified representative to assist in the process, she says. “Because there is great potential for leaving money on the table," she says. “There are a lot of things to consider."
Beyond flying more than 150 chartered hours per year, Iannarelli says it's important to look at your flight distances. If you go to Europe once per year, but travel between Denver and San Francisco a few times a month, it could make sense to buy a plane for your short trips, not your long ones.
“I have clients that will fly commercial first class and then arrange for a charter on the other side of the Atlantic," she says. “Ask yourself where you go, how often you go there and how many people you need to transport. Once you answer those questions, establish a budget."
The content provided is for informational purposes only. Neither BBVA Compass, nor any of its affiliates, is providing legal, tax, or financial advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA Compass or any of its affiliates.
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