If the need for a private jet in the day-to-day operations of your business is obvious, the next step is determining whether you should buy one outright or invest in fractional ownership.
Your course of action ought to depend upon how frequently you would use the aircraft, your corporate budget and the available aircraft.
Full jet ownership
Many think that full jet ownership is the only possibility when it comes to using and depending on private air travel. Obviously, if you or your company has full jet ownership, then it is yours, much like a car or house. Full responsibility for all aspects of the jet is yours, but you also enjoy having a private jet at your disposal anytime.
Fractional jet ownership
A condominium time-share agreement is fairly similar to fractional jet ownership. With this system, an individual or company pays a set amount and is then guaranteed a certain number of hours of use over a year or five years. In order to use the jet, fractional owners must confer with the other owners to be sure it is available.
Unlike owning a jet, having access to a private plane through fractional ownership doesn’t mean you can go anywhere in the world; not all programs offer international service beyond the Caribbean and Mexico. And if they do, some programs are so cost prohibitive that travelers often opt to fly overseas commercially in first class and then work with a charter if they want to fly to their final destinations.
Despite these limitations, the National Business Aviation Association reports that nation’s fractional aircraft market has made a turn toward what appears to be a period of sustained growth.
Several factors contribute to the increased interest in fractional ownership:
- Commercial airlines are offering fewer flights to smaller markets.
- Businesspeople consider the time savings of a private jet a great value.
- Companies that offer fractional ownership are sweetening the deal with perks like rollover hours.
- Creative membership programs increase availability to new parties.
Professional guide
A jet broker can walk you through the advantages and disadvantages of full or partial ownership of a private jet. Experienced private jet brokers can provide you with information regarding all of your options, as well as provide information about available aircraft, specifications and maintenance costs to help you make the best decision for your lifestyle or company.
Average jet prices are down and planes are on the market for shorter periods, so it may be a difficult time to find the right plane and the best price. A broker is in constant contact with the market and will be able to get the deal you need.
It’s always fun to think about the innovations and advances that will happen in the aviation industry. Especially in the design of corporate jets.
In November, Jeff Burger wrote a compelling commentary that practically begs for a reinvention of the corporate jet. He was opining about how the creativity and vision of the late Steve Jobs at Apple could do wonders for the jet industry. Instead of asking frequent travelers and industry insiders what they want, perhaps airplane designers should be proactive and show business travelers what they have been missing.
So much is made about the incredibly luxurious, world-class flying castles. Transparent floors, in-flight concerts, spiral staircases and fern-lined walls are simply not typical (or feasible) for the vast majority of private and corporate aircraft.
Instead of concentrating on over-the-top interiors that only a handful of billionaires will enjoy, remember how the simple things are often better. Steve Jobs planned his airplane to the most minute detail — famously replacing separate open and close buttons with a single toggle switch. It’s that attention to detail on the typical corporate jets that will be truly innovative.
Once grounded by a skydiving economy, private jet travel is slowly but surely returning to its rightful place in the world of business.
Commercial airlines: More expensive, less convenient
Major airlines are raising airfares and reducing routes, and travelers are encountering ever longer security lines and more delayed flights. These factors, combined with the savings, convenience and efficiency private jets offer, have fostered the first increase in private flight demand since 2008.
Creative marketing
And it’s not only the wealthy and top executives hopping aboard private jets. Some private jet firms are lowering prices to lure in less-affluent consumers through flight-sharing arrangements and social networking campaigns that offer last-minute deals.
With these incentives and options like lower-cost charter flights and fractional ownership, flying via private jet is not just for the Fortune 500 anymore, but also for a typical business traveler.
The trend is global; European jet businesses are also noticing a shift in clientele. Nearly 50 percent of passengers on private jets are middle management, engineers, accountants and sales personnel.
Private flights give competitive edge
The current global business environment — which requires immediate responsiveness and flexibility — has changed the way business people travel. Private aviation is no longer a luxury but a necessity for business survival in a competitive marketplace.
Aviation experts predict that the demand for private air travel will continue to grow as corporate earnings improve. And corporations will have some competition as they consider private jet purchases. Brazil, Russia, India and China are producing new millionaires and billionaires at an ever-increasing pace, generating a pool of private jet buyers larger than the available supply.
This trend is expected to accelerate over the next decade, making it essential that those considering purchasing a private jet do so before the limited supply grounds them. A professional jet broker can help you take advantage of the current market conditions.
November has been an important month in business aviation. Growing markets in the BRIC countries (Brazil, Russia, India and China) as well as changes to U.S. appropriations affect the industry significantly. Also, the private jet community pays homage to an incredible leader, Teddy Forstmann.
New Association to Support Growth in Chinese Private Aircraft Market
The National Chinese Business Aviation Association (NCBAA) launched its website Nov. 28, 2011. China is a fast-growing market for private aircraft, and the newly formed NCBAA plans to offer a powerful association to support the burgeoning growth. The two main objectives of NCBAA are to provide an informational platform for all players in the industry and to promote the growth of business aviation in China.
Former CEO of Gulfstream, Teddy Forstmann, Died Nov. 20, 2011
Teddy Forstmann was known for many things, especially his incredible philanthropy and love of sports. To the aviation world, Forstmann will be remembered for his leadership of Gulfstream from 1990-1999. During his tenure, research and development were well funded, and Gulfstream became a great innovator of aircraft.
Congress Adjusts the BARR
Since the August changes to the Block Aircraft Registration Request (BARR) program, the National Business Aviation Association (NBAA) has worked diligently to reverse course. From 2000 until Aug. 2, 2011, BARR protected the privacy of aircraft’s flight plans, until the August change required operators to prove a security concern in order to be blocked from public, online tracking databases. However, Nov. 22, 2011, saw the passage of an appropriations bill in Congress that keeps the FAA from continuing with its changes to the BARR program that were initiated three months ago.
It’s not just your imagination: Sales of pre-owned aircraft have climbed and inventory has shrunk.
JetNet reports that pre-owned business aircraft sale transactions between January and July increased 11.2 percent compared with the same seven-month period in 2010, and turboprop sales increased 3.7 percent. Pre-owned inventories continued to decline gradually in July, to 13.7 percent for business jets and 10.1 percent for business turboprops versus the same month last year, representing 1.2 percent and 0.8 percent drops in inventories, respectively.
This trend means that if you’re in the market for a pre-owned jet, you’ll spend more time looking for the aircraft you want — and finding fewer options. That is, unless you work with a jet broker.
Less pain, more plane
Using a jet broker takes the pain out of buying an aircraft. You don’t have to waste valuable time searching through private jet sales listings, inspecting and haggling over the jet: You simply let an expert do it for you.
Companies such as L&L International will take down your requirements, work with you to refine them to meet your budget and business needs, and procure the perfect lease or finance plan for the acquisition of the aircraft. Your involvement consists of making the final selection and signing the bill of sale.
You may not know exactly which type of private jet is most suitable for your needs, but a jet broker can help you understand your options.
Dedicated service for sellers and buyers
If you already have a personal or corporate jet, you may find that you need to upgrade to a jet that carries more passengers, is capable of longer flights or is more luxurious than your current aircraft. If you have a jet for sale and also want to buy a new model, a jet broker is a valuable asset.
You are likely too busy to put in the dedicated hours required to secure both the best price for your own jet and for the jet you want to purchase. It’s your jet broker’s job to work tirelessly on your behalf to secure the best deal. Brokers have good relationships developed throughout the world of buying and selling jets. Thus, they are in the best position to research not only the best aircraft on the market, but also the best off-market deals.
In today’s market, a jet broker’s insider knowledge saves you time and effort — and presents opportunities you don’t want to fly by.
Check out these great jets available from L and L International. Please contact us with any questions.
The Dubai Air Show, happening right now, Nov. 13–17, 2011, is always the place for all things aeronautical. This year’s exhibit has continued that tradition. Record numbers of jets have been ordered: On Day 3 of the show, orders already total $47 billion (USD) —three times more than the tally of the last show in 2009.
Qatar Airways and Emirates were the big spenders at this year’s air show; Emirates made a firm order for 50 of Boeing Co.’s 777-300ER aircraft. These two companies are funneling global travelers through the Middle East at an unprecedented rate. Combined, the two carriers ordered enough aircraft to seat 38,000 passengers.
And many of those global travelers can expect to travel through UAE in the coming years. Because of its location, travelers can take a long haul flight from the UAE either east to Asia or west to Europe. In Dubai, the Al Maktoum International Airport is due to be completed in the next decade. It will be the largest airport in the world, capable of handling 160 million passengers per year, compared to 70 million at London’s Heathrow Airport.
Take a look at the new business jets featured at the Dubai Air Show; 120 aircraft were on display. The next show will take place at Al Maktoum International Airport in 2013.
The FAA launched a new campaign on Nov. 8, 2011, asking the entire GA community to increase its reporting of wildlife collisions with aircraft. The main outreach component of the effort includes the printing and distribution of 12,000 posters to the GA community. The poster, “Report Wildlife Strikes,” is designed for frequently used areas, like training and break rooms.
The Wright Brothers documented the first aircraft-wildlife collision in 1905 in Dayton, Ohio. Obviously, aircraft and birds have endured a tenuous relationship since the beginning of air travel.
The FAA has had a wildlife hazard management program in effect for more than 50 years. From 1990-2010, more than 121,000 strikes were reported, but only 6 percent of these instances were from GA. The FAA is trying to change that. The factsheet released Nov. 8 explains innovations the agency has made to make wildlife hazard reporting easier.
- The poster contains a QR code, so anyone with a smartphone that is QR-code equipped can report a wildlife strike.
- The FAA set up a new website that easily allows users to report an incident.
Wildlife strikes endanger human and animal lives, and they cause significant damage to private property. You can see the aftermath of these collisions at a gallery on the wildlife mitigation website. Access to comprehensive data about the number of incidents, localities and the species involved allows researchers and officials to improve safety at airports and in the air.
If you’re considering purchasing a private aircraft for your business, you’re not alone.
Recent trends indicate that business aviation activity is gaining ground. That means if you’re considering buying a jet, finding the right one at the right price will present more challenges.
Flight and manufacturing activity on the upswing
Aviation International News (AIN) reports that Part 91 flights (owner-operated aircraft) saw a year-over-year climb of 4.9 percent in August, and Part 91 light jet activity increased 10.3 percent.
Jet manufacturers and pundits also reported improvements in the market compared with last year:
- Gulfstream sales are expected to be up 14 to 15 percent this year, and the company’s production backlog includes orders for more than 200 G650s.
- Dassault Aviation Chairman Charles Edelstenne reports that its order intake for new Falcons in the first half of 2011 was 22 units, compared with orders for just two jets in the same period of 2010.
- Although business jet deliveries will remain flat this year at about 549 aircraft, they could rise to more than 650 next year, according to JPMorgan North American Equity Research’s latest business jet monthly report.
Tightening the search radius
Although an improving market is good news, it presents challenges for those looking to purchase a jet.
- More competition with other buyers in the market
- Longer wait for a new aircraft
- More limited inventory of used aircraft
To find the right aircraft at the right price, you’ll need insider information and expertise. That’s where a professional jet broker comes in.
Jet brokers consult closely with you about your requirements and constraints to discover the private jet that is most appropriate for you. They have in-depth knowledge of the available pre-owned jets for sale and can broker the purchase and the sale of private jets, using their own market and off-market connections. By knowing when “jets for sale” ads are about to come up, jet brokers ensure their clients are the first in the line for the perfect private jet.
Jet brokers will work with you to negotiate terms with the seller and even help you to procure financing and insurance. Your best bet for a good deal on a pre-owned jet is to rely on the expertise of a professional jet broker.
After talking about the NBA lockout and private jets I did some follow up research and found some interesting news related to the NBA and corporate jets. I have actually met and talked with Mark Cuban in Las Vegas in 2007 and he had flown into Vegas on one of his own private jets to speak at an event and conference where I was speaking. I didn’t get a chance to see his aircraft then but it was of note that he has not one but three private jets. Cuban of course is the owner of the world champion Dallas Mavericks.
Cuban’s Gulfstream G-550 was a $40Million purchase he actually made online. The interesting fact there is that he purchased the Gulfstream online making it the largest online transaction ever made by anyone. Cuban also is the owner of a Boeing 757 that is the team’s method of travel. The 757 includes a weight room and over sized seats for the tall team members, as well as meeting and coaching areas that includes the ability to view video of games and other resources. Cuban obviously understands what it is like to have a private corporate jet. He stated in an interview of his aircraft that it allows him the freedom and privacy he needs and has gone as far as to say he cannot live without his corporate jets. Cuban also owns a Boeing 767 that he has for charter.
The other NBA player and part owner of the Charlotte Bobcats is the very well known Michael Jordan. Jordan’s Gulfstream IV is listed as having an N-Number of N236MJ meaning his number of his jersey as 23 and the 6 representing the number of championships he won as a player in the NBA. The other notable information in the picture that was put out by Yardbarker is that Michael Jordan has put his logo on the tail and the color of the plane is the Carolina Blue of UNC where Jordan attended college and played. I also understand that when the plane is seen from underneath you can also see the number 23 and the Carolina Blue colors. Jordan may not be able to compete with the big markets in the NBA but he is tops in our book with his Gulfstream IV.
