Private air travel options 101

Buyers' Guide » 2008
Tuesday, July 1, 2008 - 5:00am

"If I took a private jet to Boca, I could save a whole travel day on both ends." When a thought like this pops into your head, it can trigger a process that ends up as a thoroughly memorable experience-or one fraught with frustration. As with most things, the more time you spend in the beginning, the better you'll come out in the end.

Like real estate, private jet travel really offers only two basic ways to get involved: renting and buying. Everything else is just a variation of these.

Think of chartering aircraft as the equivalent of renting a house. Owning an aircraft is the equivalent of owning a house. Owning a fractional share in an aircraft-the option first popularized by NetJets-is the equivalent of owning a timeshare in a house or condo.

Decide Where You Want To Go

The lowest-cost way to experience an executive aircraft for the first time-besides bumming a ride in your friend's jet-is to charter a flight.

The first step is to decide exactly what you want the flight to accomplish. As simplistic as this may sound, it has more significance than even some experienced air travelers realize. If you are like most airline passengers, you probably don't pay much attention to the makes and models you fly on. But when you use private air travel, you have numerous choices in aircraft size, comfort, speed and range.

All aircraft represent compromises and are constrained by the irrevocable laws of physics. Some models trade cabin space or short-runway capability at mountain airports for range and speed-or vice versa. For example, to get coast-to-coast range, you usually need a relatively large airplane. But the bigger the aircraft, the more it costs to fly, buy and rent.

So you need to pin down where you plan to go, how far this is from where you are, how many people you want to take and when you need to be at your destination. You don't need to figure the distance to the tenth of a mile; round numbers will do. And you don't need to know the exact airports you'll be using. In fact, there are likely some ideal general aviation airports near your departure and destination points that you may not even be aware of.

Because executive airplanes have limited seating, you'll need to pin down the passenger number. Just one extra person can make a difference in the airplane required. You'll also need to figure how much baggage you'll be bringing, including anything particularly bulky, like golf bags or skis, and other special items, like pets.

Deciding when you need to travel is critical. The more notice you can give a charter operator, the better the probability that you'll get what you need. Sure, you may get lucky and charter an aircraft on a moment's notice. But if you're a first-time customer, the longer you give yourself for preparation and the more notice you can give the operator, the happier you'll be with the result.

Talk To Some Experts

After doing this preliminary homework, expand your knowledge base by talking to experts. Friends with experience in private air travel are a good place to start. Though they may not be experts in all aspects, they can certainly share what they've learned. Ask for their recommendations.

Charter brokers are another good source, but be careful. Brokers are one segment of the industry that is not regulated, though the Feds are considering this. Good brokers won't tell you about the thousands of aircraft they have in their fleets because the truth is, brokers don't have fleets. What brokers have is access to charter operators who have airplanes available. Ask your friends for recommendations.

An even more hands-on approach is to visit a charter operator at your local general aviation airport. A good place to start is at the private aviation terminal building, or FBO. If the manager is worth his salt, he'll show you around (or have a good customer service rep do it) and explain how they handle things. If he doesn't, go somewhere else.

If you take these steps, you'll have the confidence to make a good choice of the aircraft you need, a broker you can trust (if you want to use one) and a charter operator that can safely and smoothly handle your flight.

Getting Serious About Flying Privately

Now you've gone and done it. After one flight in a private jet, you're hooked. What do you do next?

If you have the money, you could buy an airplane at this point. But even if you can do this, you'd be wise to curb your desire to write that big check for a while. Many a new aircraft owner has regretted his purchase after learning later that he could have saved millions of dollars if he had taken more time to learn the market and understand the ins and outs of operating an aircraft.

One way to gain more experience is to buy flight time using one of the jet cards. As with debit and phone cards, you make a fixed payment to the jet card company for time in a given size airplane. Details of the plans differ, so it makes sense to investigate several and read the fine print. Jet cards are really just a more formal way of packaging "block charter," something charter operators have been offering for years. The big difference is that while operators openly market details about their jet card programs, they say little publicly about their block-charter offerings. When asked, they typically respond with something like, "The greater the number of hours a client is willing to commit to, the greater the discount we offer."

Evaluate Fractional Ownership

When you buy a fractional share of an aircraft-even if it is as small as a one-sixteenth share that gives you 50 hours a year-you become an owner. It may not always feel that way because you must share your airplane with many other owners. In fact, you may never actually fly in the airplane that you own part of. But to most fractional shareowners, this doesn't matter.

What they like is the consistency provided by fractional ownership and the elimination of some of the hassles of ownership. For example, the fractional manager handles the maintenance, dispatch and hangaring of the aircraft; the hiring, training and scheduling of the pilots; dealings with the FAA; and insurance. You do pay for these services, of course, via the initial payment purchasing the share, a monthly management fee and a fixed flight-hour charge. The term of the agreement is five years, after which the provider promises to buy back your share at a price based on fair market value.

Consider Buying a Whole Airplane

The ultimate goal for many private air travelers is buying and operating their own airplane-all of it. If you've been chartering for several years or have owned a fractional share, by the time you get around to considering full ownership, you should have a good idea of which models will fulfill your needs.

Full ownership gives added flexibility and control over the other options we've discussed, but also adds costs, responsibilities and headaches. You can set up your own flight department and handle some or all of the tasks that fractional providers do, or you can pay someone else to do them. This is called "aircraft management," and is done by companies that may also offer aircraft for charter. In fact, about 85 percent of all charter aircraft are not owned by the charter companies that operate them, but by individuals and corporations who have handed over their airplanes to the charter companies to manage and charter.

Buying or leasing a multimillion-dollar aircraft, new or used, is much more complex than buying an expensive automobile or even a multimillion-dollar house. You must consider and answer many questions, including:

• Which model aircraft should I get? Should I opt for new or used? How should it be equipped?



• What insurance do I need?



• Should I charter the aircraft to earn revenue?



• What taxes do I have to pay?



• How do I finance the purchase?



• Should I form a separate company for my flight department?

If you're thinking, "I'll need professional help to answer these questions," you're on the right track. And you're in luck. Numerous aviation consultants, brokers and lawyers are available to shepherd you through the process. Using these professionals takes time and will cost you a bit, but in the long run they can save you a lot of money and grief.

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