The Privileges and Considerations for Private Jet Ownership

Private aviation is a multibillion dollar business, with valuations for the private jet market expected to reach $36.94 billion by 2028. Private jets are the ultimate status symbol and have long been synonymous with success, exclusivity, and elite travel for business leaders, writes Rachel Smith.

The private jet market continues to experience unprecedented growth as wealthy individuals and institutions seek to maximise their time investment, avoiding busy terminals and creating a schedule tailored to their needs. One of the greatest benefits commonly mentioned by owners of private aircraft is the exhilarating feeling of flying, What isn’t so thrilling however, is incurring a hefty tax bill. For many companies with millions of dollars in profit who may be looking for a way to efficiently reduce their tax liability, investing in a tool that can help the business grow could be a very smart move. In the United States, it is not just the enjoyment of having your own aircraft that makes it so attractive to billionaires, centimillionaires and ultra high net worth individuals. It is the fact that Section 179 of the Tax Code for heavy equipment (anything over 6,000 lbs) enables you to utilise bonus depreciation on the asset against your income. You are able to finance the jet and write off the full amount, meaning if you make a few million dollars per year- you are to write off your entire income. Section 179 allows for a maximum deduction of $2.5 million, which phases out if the total equipment purchases exceed $4 million.
 

Private jet ownership comes with regulatory compliance, logistical challenges and perpetual operational decisions that require careful planning, Representing an extraordinary level of opulence, the large expense of owning a private jet is justifiable primarily due to it being a strategic business asset that protects your most valuable resource- time. The most productive executives treat flight time as an extension of the office. Out of the 8,760 hours in a year, the average CEO will work 2,716 of them. Among the largest companies in America however, the CEO can typically earn a salary of $17.1 million per year, making an hour of their time worth $6,296 per hour. When compared to chartering a plane, jet ownership prevents you from having to put your schedule into somebody else’s hands, be at the mercy of their flight operation and availability of planes. Airlines fly in and out of their commercial hubs, but in the United States for instance, there are ten times more private airports in the country than there are commercial airports, meaning you can travel closer to your preferred destination, faster. There is an unparalleled level of convenience that comes with owning your own private jet with the pilot and aircraft running on your schedule. Time is money, and every minute saved is added value. Therefore, creating routines and procedures that enhance productivity, is a major priority in order to get the most out of every flight. Ultimately, private jet ownership is a practical tool for optimising time management.
 

Because your cabin is your personal space, you can tailor your lighting, seating, entertainment and all other amenities in your environment to suit your tastes. Astonjet, Martin Kemp Design, Marie-Lise Baron, AirJet Designs, and Winch Design and are some of the high end interior jet design specialists who can help transform your aircraft into a blissful haven of luxury. For high profile individuals the ability to dictate departure and arrival times unconstrained by the rigid schedules of commercial flights in priceless. Efficiency also becomes highly noticeable when travelling with larger groups of people. For instance, if you were to consider taking ten of your key employees out of the office for five days, with food, multiple meetings, overnight stays and travel expenses all factored in, the combined total costs of flying commercial may exceed the price of flying privately.

It is critical to remember that unlike commercial aircraft which have dedicated ground crews, private jets need regular maintenance including structural evaluations, inspection of avionics systems and engine checks, to ensure the continued safety and functionality of the aircraft. A light jet can cost between $100,000-$250,000 per year in maintenance, midsize jets will range from $300,000-$600,000 in maintenance costs, and heavy jets will incur annual expenses ranging from $700,000 to $1.5 million if major components of the aircraft require servicing. The larger and more luxurious the jet is, the more expensive it will become to keep it airborne. In addition, the more frequently a jet is used, the faster it depreciates- with wear and tear contributing to reduced market value.
 

The initial cost of buying a private jet varies depending on the model, size and type of amenities included. From the initial purchase price of the aircraft, to maintenance fuel and storage, there are many elements which must be examined. Smaller jets such as the Cessna M2 or the Embraer Phenom 100 are designed for short, regional flights and are a priority for individuals who prefer efficiency rather than luxury, clocking in at a cost of approximately $3-$5 million. These entry level light jets offering a range of 1,500-1,500 nautical miles are typically used by executives who need quick, efficient travel for regional trips without the expense of larger jets. These aircraft are capable of using shorter runways which will usually be 3,000 ft or less, enabling access to smaller, more convenient airports. For corporate leaders who require international mobility at the very top of private aviation, custom VIP airliners like the Boeing Business Jet and the Airbus ACJ320, completely redefine luxury air travel. At prices ranging from $100-$150 million, full bedrooms, private offices, conference rooms and lounges are some of the interior modifications that can be implemented.
 

Midsize jets like the Bombardier Challenger 350 and the Gulfstream G280 have a range of 3,200-4,000 nautical miles and larger cabins that can easily accommodate 8-12 passengers and high end features such as high-speed connectivity, a full galley, private lavatories, and advanced avionics systems. On the higher end of the spectrum, industry-leading long-range business jets like the Gulfstream G700, offer the largest, most luxurious cabin in business aviation, Rolls-Royce Pearl 700 engines and advanced soundproofing that reduces average cabin noise to a mere 51 decibels. The cost for this jet easily climbs upwards to the $75-$78 million range and these kinds of aircraft can fly non-stop for 7,000-7,700 nautical miles, allowing direct flights from Los Angeles to Tokyo, or London to Singapore. The annual operating expenses for such a large cabin jet can measure up to $6 million when incorporating hangar fees, insurance, crew salaries and training, and maintenance reserves.
 

Private jets are the most carbon-intensive method of transport, used primarily by the wealthiest people in the world and notoriously exude ten times more emissions per passenger than commercial flights, and up to fifty times more than trains. This is of course becomes quite ironic when political leaders talk of sustainability while travelling in a manner that contradicts the very principles they advocate. Fuel costs are another one of the largest ongoing expenses for private jet owners, particularly for frequent flyers. Jet A fuel prices can range from $4-$8 per gallon, with costs being affected by airport location, fuel taxes and market conditions. The ongoing financial commitment makes jet ownership a luxury that highly frequent flyers are better suited to utilise effectively. Ownership also ensures confidentiality and greater security for high profile individuals, while being more cost effective than continuous chartering or business-class travel.   EG