[et_pb_section bb_built=”1″ fullwidth=”on” specialty=”off” background_image=”https://live-l-l-international.pantheonsite.io/wp-content/uploads/2016/03/slider_1_1.jpg” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off”][et_pb_fullwidth_header title=”CORPORATE JET INSIDER” background_layout=”light” text_orientation=”center” header_fullscreen=”off” header_scroll_down=”off” background_url=”https://live-l-l-international.pantheonsite.io/wp-content/uploads/2016/03/slider_1_1.jpg” background_overlay_color=”rgba(255,255,255,0.82)” parallax=”off” parallax_method=”off” content_orientation=”center” image_orientation=”center” custom_button_one=”off” button_one_letter_spacing=”0″ button_one_use_icon=”default” button_one_icon_placement=”right” button_one_on_hover=”on” button_one_letter_spacing_hover=”0″ custom_button_two=”off” button_two_letter_spacing=”0″ button_two_use_icon=”default” button_two_icon_placement=”right” button_two_on_hover=”on” button_two_letter_spacing_hover=”0″ background_position=”top_left” background_repeat=”repeat” background_size=”initial” /][/et_pb_section][et_pb_section bb_built=”1″ admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”3_4″][et_pb_post_title title=”on” meta=”on” author=”off” date=”on” categories=”on” comments=”off” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”on” text_orientation=”left” text_color=”dark” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” title_all_caps=”off” use_border_color=”off” border_color=”#ffffff” border_style=”solid” /][et_pb_text background_layout=”light” _builder_version=”3.0.85″]
It is exciting to witness all of the different innovations occurring simultaneously in the world of private jet design. In this blog, we’ve covered the economical HondaJet, the electric hybrid Volta Volare GT4, and the massive double-decker Boeing 747-8 Intercontinental in just the past five months. Fuel efficiency is cool, and who doesn’t want to lie flat when traveling across the ocean? But now it’s time to increase the sexy factor: Speed!
Enter Aerion Corp. with its experimental Supersonic Business Jet (SBJ). This is gonna be cool. According to Bruce Dorminey of Forbes, here are the projected numbers:
- Mach .99 — The jet’s overland speed in the U.S.
- 45,000 feet — The predicted cruising altitude
- 4.25 hours — The length of flight from NYC to Paris
- 148 feet — The length of the Aerion SBJ
- 8-12 — Capacity of the SBJ
- 1/20,000” — The leading edge of the Aerion SBJ wing (Yes, sharp as a knife!)
- 50 — The number of Letters of Intent Aerion already has
- $80 million — The price tag
Of course, testing is still happening, and then Aerion has to partner with a manufacturer. Also, there are plenty of skeptics and the FAA to win over. In any case, Aerion hopes to have SBJs ready for delivery by 2017. Sign me up!
[/et_pb_text][/et_pb_column][et_pb_column type=”1_4″][et_pb_sidebar orientation=”right” area=”sidebar-1″ background_layout=”light” remove_border=”off” /][/et_pb_column][/et_pb_row][/et_pb_section]
Purchasing a business jet is no small investment. After a company adds maintenance to the cost, even the occasional repair has a substantial impact on a company’s budget — especially if major repairs are necessary.
A guaranteed maintenance program (GMP) eases that burden and provides assurance that your aircraft is ready to take off at virtually any time.
Why you should look at a GMP
According to Conklin & de Decker’s AIReport, all of the major turbine engine manufacturers offer some form of an engine GMP. Also, a major third-party provider of these plans covers most popular business turbine engines. When you employ a GMP through a provider, you pay into an escrow account to cover future engine maintenance. The GMP provider manages the money and pays the bills.
Here are the reasons the AIReport recommends GMPs:
- GMPs cover scheduled maintenance expenses plus all unscheduled maintenance, such as line checks. Depending on the program options selected, some GMPs also cover rental engines and the removal, re-installation and shipping for the overhaul. Except for negligence and acts of God covered by your insurance, GMPs cover nearly everything.
- Accountants love stability in budgeting, and a GMP offers just that by removing all unplanned costs and surprises in the maintenance of the aircraft engine.
- GMP fees can be a business deduction because the money flows to a third party. Cash that’s simply set aside for future expenses is not deductible and can increase the corporation’s tax liability.
- A GMP also offers insurance against rare but costly unscheduled maintenance events. Although turbine engines are reliable, when an unscheduled event occurs, it can result in significant expenses.
- An engine GMP adds value to the aircraft if you are selling it. For example, if the GMP has accrued $350,000, the accrual adds cash value and reduces risk to the buyer because the engine maintenance costs are covered.
Engine GMPs have several benefits. They are a good way to maintain the value of your aircraft, provide stable budgeting and save money over a pay-as-you-go engine maintenance schedule.
Other services to consider
Depending on the GMP provider and options you choose, aircraft management companies offer a plethora of services. Everything from aircraft repair and maintenance to cleaning, insurance, crew costs and training may be included in a GMP. They may also provide additional services such as:
- discounted parts and labor
- guaranteed aircraft availability from their fleet when yours is in maintenance
- technical audits and inspections
- heavy maintenance and airframe repair
- maintenance predictions and cost modeling
- de-registration/registration process with international authorities
- detailed monthly flight, maintenance tracking and accounting reports
Some companies offer Part 135 aircraft management agreements that allow the provider to charter your aircraft when it is not in use. Such an arrangement lets you earn revenue from your investment and significantly defrays the cost of aircraft ownership with very limited drawbacks.
SpaceX successfully launched Dragon, an unmanned capsule, Tuesday, May 22, 2012, from Cape Canaveral Air Force Station. This event is being heralded as the beginning of a new era of spaceflight. No longer is space the sole playground of government agencies. It’s the dawn of the commercialization and privatization of space travel. This is exciting stuff.
Almost exactly 85 years after Charles Lindbergh, aboard the Spirit of St. Louis, completed the first non-stop transatlantic flight, SpaceX CEO Elon Musk and company held their breath and watched with clenched fists as Falcon9 lifted off with Dragon on its back. So far, so good. The solar arrays and navigational sensors deployed and the GPS equipment is working. Now, Dragon just needs to make it to its $100 billion docking site, the International Space Station.
Once there, the astronauts will unload the 1,014 pounds of cargo:
- Cremated remains of 308 people (The astronauts won’t actually keep these; the canister they’re in will be released and disintegrate upon reentry, sending the remains into eternal celestial suspension.)
If this demonstration mission is successful, then SpaceX will begin fulfillment of a $1.6 billion contract with NASA to deliver goods, and eventually astronauts, to the International Space Station. The revenue sounds awesome, but I think the potential ramifications of this event are much more impressive:
“It is like the advent of the Internet in the mid-1990s when commercial companies entered what was originally a government endeavor. That move dramatically accelerated the pace of advancement and made the Internet accessible to the mass market,” said Musk, SpaceX CEO and chief designer.
Where will the trajectory of aviation innovation point to in another 85 years? Perhaps individual flying pods here on Earth, or new aircraft called “planet-jumpers?”
You’ve just scored a great deal on a private aircraft for your company, and you’ve locked in the financing. You’ve outlined the business case behind the purchase and presented it to your organization’s key players. Now what?
Any company using private air travel benefits from the member services of the National Business Aviation Association (NBAA). The 65-year old organization pursues a mission “to foster an environment that allows business aviation to thrive in the United States and around the world.”
The NBAA seeks to enable the business community to be more productive and profitable through the promotion of private air travel. Through the organization’s efforts, business travelers benefit from improved aircraft and airport safety and from technological advances in both weather reporting and air traffic navigation.
The organization also strives to help members contend with the complex landscape of business aviation, including advice on tax issues, insurance and risk management, and safety compliance.
NBAA supports its 8,000+ members with more than 100 services:
- Legislative advocacy for the business aviation community at the federal, state and local level
- Continuing education and training through the annual NBAA convention, regional seminars and online forums
- Networking opportunities, both in-person and online, that bring the business aviation community together to share advice, opportunities and solutions
- Direct access to leading aviation experts who can explain the complex rules and regulations surrounding the industry’s certifications, equipment and service specifications, and safety issues
- Industry news, perspectives and information through a bi-monthly magazine, eNewsletter, handbooks and more
NBAA annual membership rates are based on company revenue and aircraft size. To learn more about this important resource organization, visit www.nbaa.org.
The European Business Aviation Convention and Exhibition (EBACE) ended yesterday, May 16. The annual event is hosted jointly by the European Business Aviation Association (EBAA) and the National Business Aviation Association (NBAA — the premiere organization dedicated the U.S. business aviation industry).
EBACE by the numbers:
- 60 aircraft at Static Display of Aircraft
Each year, EBACE brings together representatives from all aspects of business aviation — avionics vendors, aircraft companies, governmental entities and business leaders just to name a few. This is an incredible forum for all things related to business aviation. Here are some of the newsworthy announcements from EBACE:
- Cambridge Airport plans to invest $32 million in its facility to encourage business aviation there.
- Greater helicopter presence than ever before.
- EBAA and NBAA leaders spoke out against the European Union’s Emissions Trading System, claiming it is unfair to business aviation.
- Bombardier unveiled two new Learjet models.
If you attended, please tell us what you think the most important event was.
Air travel is exhausting enough without having to move from your seat to manage settings for lighting, audio and more. That’s why products like Select CMS allow private aircraft travelers to control the cabin experience — including lighting, temperature, window shades, galley equipment and more — all from a user-friendly, touch-screen display.
Flight Display Systems, the makers of Select CMS, recently took a big leap into the future with the announcement of its Select CMS Platinum upgraded cabin management system. The most significant improvement in the Platinum product is found in the entertainment controls, which connect wirelessly to an iPad and feature hi-definition Blu-Ray video and audio controls.
Each Select CMS system is fully customizable and installs easily on smaller prop-planes as well as wide-body jets. The system also features Remote Support Access to identify and troubleshoot technical issues from the ground.
Flight Display Systems launched in 2001 with the popular Flight Display Moving Map, an in-flight graphic map that displays altitude, air speed and distance. Today, Flight Display Systems’ products are installed on private planes used by presidents, CEOs and dignitaries around the world. The company also produces video components used by the military for surveillance and reconnaissance functions.
For information about Select CMS and videos featuring the company’s products, visit www.selectcms.com.
The safest in the world. So safe that people take it for granted. When was the last time you saw someone actually paying attention to the flight attendants’ safety demonstration before takeoff? And the flight crew certainly makes sure your seat is in the upright position and your smartphone is turned off during landings.
So what about this letter from the Office of Special Counsel to the White House? It was released May 8 and describes a “pattern of failure” by the Federal Aviation Administration (FAA) and the Transportation Department to respond to whistleblowers’ allegations. Some of these accusations seem pretty serious:
- Controllers sleeping, watching movies and leaving early while on duty
- Improper fuel tank maintenance and wiring by a major airline
- FAA guidelines failure to guarantee safe separation for landing at Detroit Metropolitan Wayne County Airport
- Jets flying too close to each other in busy airports (Newark Liberty International Airport)
In fact, the special counselor’s office has received 178 disclosures, 87 of them safety-related, since 2007. Apparently, more disturbing than the safety allegations themselves is the slow response from the FAA to correct the problems.
Safety first, right? We wrote in our newsletter last August about how safe private jet travel is —even safer than commercial flights. You can read that here.
If you’ve identified the perfect plane for your needs, then it’s time to start thinking about financing. Before reaching out to a lender, it makes sense to prepare for the process and answer a few basic questions.
What to expect during financing
The aircraft financing process is very similar to the application process for a home mortgage. The lender requests financial information from the loan applicant, then conducts an appraisal to determine the value of the aircraft. The lender also executes a title search to ensure no outstanding liens or issues exist.
Finally, the loan paperwork is initiated by the lender. Documents include a security agreement (in the event the borrower defaults on the loan) and a promissory note that outlines the terms of the loan. At closing, the paperwork is signed, and the new title is transferred to the aircraft owner.
Before you begin
Here are some of the key questions to weigh before sitting down with a lender:
- Who will be responsible for repaying the loan? Will the loan be extended to your corporation, an individual or a corporate subsidiary? Are there extenuating circumstances that may require backing by a third-party, such as a partner or investor?
- What are the preferred loan repayment terms? How much is the company or individual prepared to offer for down payment? Will payments be made on a monthly or quarterly basis?
- What are the tax implications of this purchase? Research the best place to register the aircraft to reduce sales tax. Discuss with an accountant the best method to handle depreciation so that overall tax liability is reduced.
- How many hours will the aircraft fly each year? Will the plane be maintained by private staff or an external management company? Will the jet be made available for charter or a third-party for use?
What’s trending in lending
Because of continued uncertainty in the financial markets, lenders are applying tighter controls to loan terms. In the past, many banks required that the age of the aircraft combined with the term of the loan not exceed 30 years. Unfortunately, that guideline has dropped recently to just 20 years, making newer aircraft an attractive option for many buyers.
Lenders also expect to build strong relationships with borrowers, meaning companies must be candid about the health of their business and proactive about turning over financial information.
Financing is one of the most important steps in the buying process because of its impact on the total cost of aircraft ownership. Taking time to prepare and think about the best loan arrangement will lead to a sound strategic investment — and more enjoyment of that investment.
Two major events happened in the past week in aviation. From the super-huge Boeing Intercontinental to the lightweight, fuel-efficient Volta Volare GT4, advances in aircraft design are certainly moving in opposite directions.
Let’s see what each development brings to the world of aviation.
After six years of troubleshooting, the Boeing 747-8 Intercontinental was finally delivered to Lufthansa in Seattle, Wash. The 467-passenger jet will start service June 1, flying between Frankfurt, Germany, and Washington, D.C. This double-decker airplane has the newest wing-engine combo, and it marks the launch of the lie-flat business class. Larger cabins, thinner economy-class seats and roomier cargo bins are new features for the interior. You can see a slide show of the jet here.
At the other end of the spectrum is the tiny Volta Volare GT4. This four-passenger aircraft is an electric hybrid plane that has a range of 300 miles on batteries before the engine kicks in to carry the Volare a maximum of 1,000 miles. The batteries weigh about 900 pounds, and the 1.5 liter gasoline engine uses a 23-gallon tank. No lie-flat seats or first-class cabin are included.
I would guess the Boeing is more comfortable, but the Volare offers a more adventurous experience. So which one would you rather fly in?
