10 ways to cut the cost of flying privately

Business Jet Traveler » August 2010
Any trip can be more efficient at slower speeds, which also result in less we
Sunday, August 1, 2010 - 5:00am

Flying in business aircraft, whether small or large, is an expensive proposition. But a variety of methods can help you keep costs to a minimum while maximizing safety and efficiency. 

Remember that you, the owner or customer, set the agenda for your trips. Your first priority must be an unwavering insistence on the highest levels of safety. When it comes to other factors, if you want your pilots and service providers to spend Marriott-style dollars on hotels and other services, then don't set Ritz-Carlton expectations. Here are 10 ways to save: 

1. TAKE ADVANTAGE OF A BUYER'S MARKET. If you're thinking of purchasing an aircraft, now would probably be a good time, as prices remain relatively low for many used models. Meanwhile, charter prices have firmed since bottoming last year but aircraft availability is high and there is more competition in the jet card marketplace. In the fractional world, preowned shares are readily available at depressed prices. Just make sure your "bargain" really is one: Necessary maintenance and upgrades to older airplanes can add hundreds of thousands of dollars to the cost. And if you buy a fractional share, keep in mind that you will likely have to pay current monthly management fees no matter how low the purchase price, so that will boost your total cost. Also, don't skip pre-purchase technical inspections, and be wary of any turbine-powered aircraft that has sat unflown since damage can occur if engines aren't run regularly.

2. OPERATE EFFICIENTLY. Make sure your investment in private jet transportation is in line with your usage-you'll waste money if you charter constantly and fly a lot, or if you buy your own jet but rarely use it. The traditional rule is that if you fly fewer than 50 hours a year, you should charter or buy a jet card. For 50 to 400 hours a year, a fractional share can make sense. If you fly more than 400 hours a year, it can be more economical to buy a jet and hire your own pilots or contract with a management company. 

3. CHOOSE YOUR DESTINATIONS WISELY. You're the ultimate arbiter of where your airplane goes and you shouldn't leave that up to pilots or management company dispatchers. Realize that destination decisions can have a huge effect on what you pay for fuel and services. If you tell your pilot you want to go to Miami, for example, he or she may assume you want to land at Miami International. But if your meeting is near enough to alternative airports like Kendall-Tamiami or Opa-Locka, you can save hundreds or even thousands of dollars on a tank of gas. The same is true of many other large metropolitan areas.

4. KEEP AN EYE ON FBO COSTS. Don't let the pilots pick a fixed-base operator (FBO) simply because they like the free steaks that come with a tank of jet-A. If you'd rather patronize the lower-priced, less majestic FBO at an airport with multiple competing facilities, then say so. And while you're at it, ask the pilots to make sure they're pulling out all the stops to get the best fuel-price discount at the selected FBO, or switch to one that is more competitive.

5. SLOW DOWN. Unless you've had the "fly efficiently" conversation with your flight crew, pilots may assume you want to get where you're going with all haste. But pulling back the throttles and flying at the most efficient altitude for the winds can save significant money over the long term. Generally, you want to fly fast into headwinds and throttle back with tailwinds. But any trip can be more efficient at slower speeds, which also result in less wear on the aircraft. And if you've equipped your airplane as an office-in-the-sky, more time in the air could mean you get more work done.

6. PAY LESS FOR FUEL. Savvy fliers know that fuel prices vary considerably. They're highest at major airports with only one FBO and lowest at out-of-the-way airports that see little traffic. But no matter where you fly, you can save on fuel. Your charter company or fractional provider will already have pre-negotiated fuel rates, but you should ask them to confirm that their surcharges match the actual cost of fuel, which fluctuates with oil prices. Flying your own airplane? Ask your pilot to negotiate a lower rate with the FBO or to sign up for one of the many contract fuel programs-AML Global, Avfuel, Avcard, Colt, Mercury, Multi Service, UVair, World Fuels and others-that offer significant savings. Or consider an account with FuelerLinx, which aggregates pricing from multiple contract and FBO sources, arranges a fuel release with the chosen provider, then follows up with your invoicing to ensure that you paid for what you bought. "How often are flight departments checking their invoices?" asked Suzanne Moller, FuelerLinx director of business development. "Do they have a system in place or are they hoping what was quoted actually matches up to the invoice sent after the fact?"

7. SAY NO TO OVERPRICED SERVICES. Business airplanes cost lots of money, but a well-timed question or two can help keep a little more of it in your pocket. You'll hear the same excuses for high prices everywhere you go: it's FAA-certified, so it costs more; everything at airports is more expensive because property costs are higher; insurance is expensive because of the high liability; jet engines are unimaginably costly because of the close-tolerance, high-temperature parts. There's some truth in all of these statements, but it's also true that if you don't ask for a discount, you won't get it. And now may be a good time to ask, because service center hangars have been less crowded during the downturn and service providers are willing to negotiate on everything from maintenance to avionics upgrades, interior refurbs and paint to keep their crews busy.

8. BUY POWER BY THE HOUR. Prepaying doesn't always save money in the long-term, but it does help preserve the value of your asset (since programs can be transferred to new buyers) and simplifies budgeting. And when that million-dollar-plus invoice for the turbine engine overhauls arrives, you'll be happier that your engines are already covered. Most engine and aircraft manufacturers as well as independent provider JSSI offer some kind of program covering parts to whole aircraft and anything that can happen to engines. 

9. CONSIDER SKIPPING THE LATEST GIZMOS. There is no end to the ways you can spend money on cool new technology for your aircraft, from gee-whiz cockpit avionics that set your pilots' mouths salivating to endlessly entertaining cabin electronics. But do you really need that stuff? Ask your pilots to demonstrate how a new black box will benefit you and quantify the return on investment. Unless there is a government mandate (a big one is coming with the FAA's plans for NextGen air traffic control) or a safety consideration, you might not have to spend those dollars. 

10. THINK ABOUT SELLING-BEFORE YOU BUY. You've heard the adage that the happiest days in a boater's life are the day he buys the boat and the day he sells it. That line could sometimes apply to aircraft owners. You need to consider the disposal of the asset before you buy-not when you're under pressure to recoup as much from the investment as possible during an economic downturn. Carefully read the fractional-share contract and the part about how much you can get for the share if you need to sell it back to the provider. Most contracts specify market value, but that can vary considerably, and you need to be prepared for downturns like the recent one that slashed used aircraft values by double-digit percentages. You may also want to consult your tax expert to determine what ownership period will maximize depreciation benefits. The amount you save by doing so could offset a big chunk of your expenses.

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