Private jets are great for business, but what if you’d like private jets to be your business?
The luxury and efficiency of jet travel isn’t just appealing to individuals and savvy corporations; it’s also becoming a viable business model. Entrepreneurs are embracing the uptick in popularity of chartered jet services by building businesses in this growing arena.
Although the dream of operating an airline might seem far-fetched, with a focused plan, this dream can become a reality. Here are a few important things to consider before starting a private jet charter service:
- Business model — What type of service would you like to offer? Who will be your main customers? The answers to these questions will determine whether you need to invest in top-of-the-line jets with all the amenities to cater to CEOs, politicians, and celebrities, or put your money toward reliable planes that simply offer a quick way for ordinary travelers to bypass the hassles of commercial flight.
- Funding — Think about how much capital you’ll need and how you’ll acquire funding to start your business. A small airline will require a large initial investment to purchase planes, hire experienced pilots, and begin marketing efforts to attract customers.
- Paperwork — You’ll need to incorporate your business, registering as either an LLC or General Partnership (assuming you aren’t the sole financial investor) as well as file paperwork with the Federal Aviation Administration (FAA).
- Specs — Finally, you’ll need to research and begin the process of purchasing aircraft. Based on your determined business model and budget, you’ll be deciding what types of jets are the best fit for your service: budget or luxury; large and economical or small and intimate; and new or pre-owned.
Taking care of all of these details for one jet can be complicated enough; purchasing multiple aircraft presents a host of hurdles. To ease this challenging task, seek out the services of a broker who specializes in jet sales. With their experience and knowledge of the market and industry, good brokers can help you invest wisely in the best aircraft for your new business.
Make your first business move a smart one: Get help finding your fleet of jets from a professional broker with experience.
If your company is new to the private jet industry, it may be difficult to decide if it’s time to embark on the quest of jet ownership. When making this decision, there are many factors to consider.
- What’s your travel time? If you or your co-workers regularly travel 150 or more hours a year, it may be time to invest in a corporate jet.
- Where are you going? The distance you travel will dictate how large of an aircraft you’ll need. You’ll also need to consider how many people will need to make the trip, and buy an aircraft of the appropriate size. An ultra-light jet won’t work for large groups covering long distances.
- Plan for maintenance costs. Fuel, repairs, crew salaries, and government required inspections can add up quickly. Other costs will creep up, too, like regular airport fees and cleaning services. Make sure you know what you’re getting into.
- Consider your image. Before you buy, consider the impact purchasing a private jet could have on the reputation of your organization. While it might be the right financial decision for your company, it might not sit well with the general public. Check with your legal department and PR specialists before you buy.
- New or used? New and used jets each have pros and cons. Make sure you get a thorough inspection before you buy a used aircraft. Used planes may require costly and time consuming upgrades to meet current regulations, too. A new plane will cost you more, but they often come with a five year, tip-to-tail warranty. While you will still be responsible for the cost of inspections, most other expenses are covered by the warranty.
Hire your team
Once you’ve decided to purchase, hire the right team to find your aircraft. You need a team that is experienced, has the resources to find the right plane, and has impeccable integrity. A professional company like L&L International will take the time to get to know your specific needs then search on- and off-market to find an aircraft that’s perfect for you.
Buying a corporate jet is a complex process, and bringing in professional help is going to save you time and money. Working with an experienced broker like L&L International will ensure that you love your purchase long after the transaction is finalized.
When your company invests in a private jet, one of the most important features to consider is the cabin. The cabin size and shape are critical to making sure that passengers enjoy a comfortable, spacious ride.
According to Air Charter Access’ Aircraft Selection Guide, the number of passengers a jet can seat ranges widely. A very light jet transports four adults, while as many as 16 passengers can travel on a heavy jet, which also has a full-service galley, a lavatory and perhaps a shower.
Cabin features
Not all cabins are created equally. Although two aircraft may both offer 28-foot-long cabins, one may have a bigger galley or lavatory, which sounds nice but reduces the area for passenger seating. Evaluate the tradeoffs between passenger seating space and galley/lavatory requirements.
The shape of the cabin is also a consideration. A round cabin provides maximum width at or just above the hip, whereas a cabin shaped like a bread loaf is straight-sided and provides greater shoulder width.
Baggage concerns
In-cabin baggage storage is important, as passengers may need access to some of their items — such as toiletries, laptop computers or clothes — while in flight. Trips may include a golf game, skiing or other activities requiring larger items with awkward shapes, so baggage storage compartments should be big enough to store those items.
Having an external baggage compartment prevents additional wear on the interior and allows passengers to board while their luggage is being loaded. For larger jets, consider how high off the ground the external baggage compartment will be.
A light jet will have limited luggage storage, usually around 40 cubic feet, so it won’t carry seven passengers with two days’ worth of necessities. However, a turbo prop can handle that load with no problem as long as it’s a short trip.
Although you can design and decorate your jet to your desires and specifications, you’ll want to give thought to the size, shape and luggage storage your cabin offers before you select an aircraft.
The Asian Business Aviation Conference and Exhibition (ABACE) runs April 16-18 in Shanghai. This year’s event is especially exciting, given the substantial growth and potential for growth in the business aviation sector in Asia.
Organizers of the event, including NBAA, are celebrating record numbers:
- 6,284 registered attendees
- 34 aircraft on static display
This year, 80 U.S. businesses are attending ABACE, demonstrating an increase in trade between the two countries. Cessna announced at ABACE that it plans to start production of business jets and turboprops in China by the end of the year. And Gulfstream brought five aircraft for the static display, including the G650 and G280. According to Scott Neal, senior vice president of sales and marketing for Gulfstream, these two jets are especially suited for Asia-Pacific locales.
China is the fastest growing market for private aircraft, but demand for aircraft is only part of the success of the business jet market. The other part is creating and maintaining substantial infrastructure to accommodate the increase in flights and aircraft. To this end, Jing Ming, vice president of Shanghai Airport Authority, announced specific projects to support business aviation:
- New hangar and 600,000 sq. foot exhibition hall at Hongqiao Airport
- New FBO at Pudong Airport
- Working to increase capacity for air traffic control
These infrastructure improvements are good news for aircraft manufacturers. It’s exciting to see such enthusiasm for business aviation at ABACE this year. This is good news for the industry as a whole.
CenterPoint Aviation Law’s lawyers advise an international client base about the regulatory, tax and commercial issues affecting aircraft transactions.
Aircraft owners need expert answers to questions about issues such as avoiding entanglements with a company’s flight department, making sense of the entertainment-use tax rules or structuring and conducting a complex aircraft transaction. CenterPoint’s expertise helps ensure its clients’ assets are protected in the acquisition, ownership and operation of their aircraft.
CenterPoint regularly counsels clients about:
- compliance with federal aviation regulations
- federal excise tax exposure
- federal income tax planning, including addressing depreciation
- personal use of corporate aircraft
CenterPoint’s lawyers also assist clients with aviation-related state and local sales, use and property tax planning issues. The firm provides expert guidance for FAA and Cape Town International Registry registration. And the firm can assist owners in creating ownership trusts, aircraft management and charter agreements and joint ownership arrangements.
Attorneys Alan and Stephanie Burnett take a proactive approach to guiding all professionals who deal with their clients’ aircraft, including:
- technical representatives
- management and charter companies
The firm’s interaction with these professionals ensures smooth transactions through all aspects of buying, selling, owning and operating private aircraft. The CenterPoint referral network saves users valuable time and energy in selecting qualified aviation service providers.
CenterPoint Aviation Law is located in Seattle, Wash. Call (206) 805-5700, e-mail info@centerpointaviationlaw.com or visit http://www.centerpointaviationlaw.com/index.htm for more information.
It’s easy to list the benefits of private jet travel for businesspeople. No wasting time in long security lines or sitting through lengthy boarding procedures; private time for meetings during flight; and fewer hotel stays. Plus, with some 5,000 airports across the U.S., there are more options for landing. It’s easy to see how private jet travel offers a competitive advantage for traveling businesspeople.
But a corporate jet can do more for your business than simply saving time and inconvenience. Have you considered what a private jet will do for your company’s image?
Appearances matter. People like to do business with companies that are already successful and established. The old adage to “dress for success” applies to companies as well as individuals. And very few things say “success” like a corporate jet.
A common goal for companies is to protect and project a powerful corporate image. After all, image is everything! One component of your company’s image should be highlighting its success, growth, profitability, and ambition. A corporate jet demonstrates that your company is established and successful and that you’re busy attracting new clients and supporting current clients wherever they are.
The corporate jet gives you instant credibility as a go-getter who means business. The message prospective clients get is “People who fly in private jets don’t have time to waste.”
So consider building up your corporate image with a jet. With a corporate jet, your company’s reputation will get a lift and you’ll enjoy all of the other perks that come along with jet ownership, like convenience, flexibility, and privacy.
A professional jet broker is just one player on your team of trusted representatives that assist you in finding and buying the right aircraft. In fact, every aircraft purchase includes many critical pre-purchase components that involve the expertise of skilled and specialized professionals who will make the purchase process clean, smooth, and safe for you and those you carry in your aircraft.
Aviation inspection: Ensuring safety and reliability
A thorough pre-purchase inspection centers around ensuring that the aircraft being considered is mechanically sound. A trusted broker can recommend qualified, unbiased third-party technicians who specialize in the kind of detailed inspection you’ll require.
A thorough inspection includes not only physical inspection and testing of the aircraft’s systems, but also a review of maintenance and repairs. Your technicians will review:
- maintenance records, starting from the time the aircraft left the factory
- log books, to ensure records have been maintained accurately
- physical systems, components and structure, accomplished by performing an official Chapter 5 manual maintenance inspection or customized evaluation
- special maintenance needs of the aircraft
- potential upcoming or ongoing maintenance issues
- potential required upgrades to avionics or other technology
The results of these reviews will provide you with a wealth of information about the aircraft that will help you understand the type of care and maintenance it will require and the potential costs involved in ownership.
Aviation law: Ensuring a clean transaction
A broker is also an excellent source for connecting to aviation legal counsel. Unlike your corporate or personal attorneys, an aircraft attorney can provide specialized information about such topics as:
- federal aviation regulations
- federal excise tax exposure
- tax and depreciation considerations
- personal use of corporate aircraft
- joint-ownership arrangements
Aviation law specialists also assist clients with aviation-related state and local sales, use and property tax planning issues, FAA and international registration, ownership trusts, aircraft management and charter agreements.
A qualified, trusted broker can help you connect with key specialists such as these and others, including lenders, insurers, accountants, pilots, management and charter companies, escrow agents, owner trustees, qualified intermediaries, and other personnel you will work with through all the aspects of buying, selling, owning and operating your private aircraft.
The Federal Aviation Administration (FAA) released a list of federal contract towers that will be shut down due to budget constraints caused by sequestration. These towers typically operate in smaller airports, providing air traffic control to private sector flights at vision flight rule (VFR) airports. These systems save the FAA money while significantly improving the safety at the VFR airports.
Considering how busy VFR airports are, it seems inconceivable that the FAA would ever consider closing these towers, but the closures were announced March 22. They will be phased in, starting this week. Here’s a complete list of affected towers.
Tower closures by the numbers:
- 226 — Airports in federal contract tower program
- 25 — Percentage of air traffic controlled by federal contract towers
- 149 — Number of air traffic control towers being shutdown
- 4/7 — Date the closures will begin
- 750-1,100 — Number of controllers and supervisors expected to lose jobs
- $600 million — Amount FAA has to trim from budget due to sequestration
Some of these towers control traffic for cargo airplanes, and others serve as overflow airports for regional hubs. It will be a setback for general aviation to lose this many towers in such a short period of time.
What are your thoughts about this situation?
Note: This article contains statistics that are several years old, but the point is still a good one: private jets are a safe way to fly!
It’s common knowledge that you’re more likely to be in an accident in an automobile than a plane. But if you’re in a business jet, you’re even less likely to be in an accident or sustain an injury.
A report in the October issue of Business Jet Traveler (BJT) (BJTonline.com) says corporate/executive business jets had been involved in only one fatal accident since 2007, citing statistics on U.S.-registered aircraft from Robert E. Breiling Associates, an aviation-safety research firm. It also noted that corporate/executive turboprops don’t have quite the stellar record, with one fatal accident in 2007, two in 2008 and three in 2009, but none in the first half of 2010.
The lowest fatality rates per 100,000 flight hours belong to corporate/executive aviation and airlines, followed by business aviation (generally owner-flown aircraft) and then the charter industry (which covers everything from single-engine visual flights skirting weather in Alaska to aeromedical operations to jets), BJT reports.
And fractional-share operations have the highest safety rate in recent years, with no fatal accidents from 2007 through the first half of 2010, according to BJT.
However, accidents not involving a fatality do occur among aircraft, and Breiling statistics showed 17 incidents occurred in the first six months of 2010 compared with 11 in the same period in 2009 in the corporate/executive jet segment, BJT reports. For all of 2009, that segment saw 17 incidents, while corporate/executive turboprop operations’ incident rate was four in the first half of 2010 compared with one in the first half of 2009.
A history of safety improvements
Before Congress established the Federal Aviation Agency (FAA) in 1958 (changed to the Federal Aviation Administration in 1967) and began implementing regulations to make flying safer, aircraft incidents and fatalities were fairly common, according to a 2009 BJT article. One former FAA inspector was quoted as saying 3,214 people — about eight people a day — died in aviation-related incidents in 1972; by 2008, that number had dropped to 876.
FAA regulations, as well as steps the aviation industry has recently taken to mitigate the risk of flying, have helped to make flying safer, BJT reports. Under the new Safety Management System (SMS), the operator of an aircraft establishes a formal process to evaluate, minimize and prevent risk exposure, essentially creating a feedback loop to prevent small risk-taking actions from turning into incidents and accidents. Many airlines, flight departments, charter and fractional-share operations have already adopted SMS programs. The FAA is planning to make SMS mandatory in the United States, and it is already required in many other countries, according to BJT.
Business jet owners and operators can also help to ensure safety for themselves and their passengers and minimize their exposure to risk with two simple moves: Clearly communicate that safety is the first priority by telling their flight crews that they’d rather arrive late than take undue risks; and implement an SMS in your flight department or fly with charter operators that have implemented one.
