March 17, 2016

Your Aircraft Marketplace

March 17, 2016

Your Aircraft Marketplace

Consider the Mission //

charter-jet-lance-welch-houstonThe first thing to consider when deciding to purchase a jet is the purpose it will fill: what trips to which locations, with how many passengers, with what luggage, and how often. “Sometimes we have first-time aircraft buyers who come in, and they think that because their friend or business associate owns a specific model that they should own the same airplane,” said Lance Welch, Jet Linx Houston Base Partner and President (pictured at right). For example, a Texas client interested in flying regularly to Jackson Hole, Wyo. may consider purchasing the same aircraft that a friend uses to fly to Aspen, Colo. Even though the jet might suit the friend’s needs perfectly, the interested purchaser may not realize that the longer leg to Jackson Hole could require a fuel stop. “We don’t push a specific aircraft; we interview clients to understand their needs and mission profile,” Welch explained.

Ray Bennett, Jet Linx Aviation Vice President of Sales, agrees. “The first thing that we want to know is what you’re trying to accomplish with the aircraft: if there’s a personal need or a business need, and where you’re traveling,” he said. “In essence, what it comes down to is the mission profile of the aircraft. We will ask if there is a personal vacation destination you’d like to go to, or with a business, what the customer is looking to accomplish with the aircraft ownership.”

Many times, clients who have used jet cards in the past have a good idea of what sort of airplane they’re looking for. Oftentimes, these clients will have purchased a jet card for the purpose of trying before they buy. Past trips and experiences with the Jet Linx fleet can help determine what size of plane will suit the client’s purpose and provide familiarity with popular models that Jet Linx already works with. “Typically, Jet Linx sees clients looking at ownership who already have a jet card and want to reduce their cost of flying, or clients who have owned their own airplane under a Part 91 certificate and want to put it on a Pt. 135 certificate,” said Bennett. “We see that occasionally in Scottsdale, but more frequently we see people who were introduced to private aviation by their friends under Pt. 91 flights.” This arrangement won’t have guaranteed availability like Jet Linx offers for aircraft owners and jet card clients, however, and often doesn’t come with the same safety certifications. “The safest way to fly is to partner with a company who has the experience and the proven history,” Bennett explained. “When safety and quality become more important than price, that’s the point you’re going to start to need us.”

The Jet Linx team will help a prospective aircraft owner determine which aircraft works best for their individual needs – down to the details, including mission length vs. fuel stop potential. “You’re buying a private aircraft to make travel more convenient,” Welch stressed. “If you’re spending $2 million on an airplane, it might be a great airplane and get you from point A to point B. But when you start talking about getting six passengers and luggage on that airplane, you could have to add a fuel stop. You’re going to
want to make sure that your airplane can really accommodate your mission when you’re making that significant investment.”

charter-jet-jay-vidlakConsidering the use of the jet can help narrow an owner’s search to a specific size of jet. “If you have an aircraft owner who’s only going to fly with four or five people at a time, with short hops or very short leg trips, they might look at a light jet,” recommended Jay Vidlak, Jet Linx Aviation Vice President of Base Development (pictured at right). Generally, midsize jets are better for longer trips 1600 – 1700 miles or more without fuel stops. Super-midsize and heavy jets start to touch on coast-to-coast trips or possibly international trips, and offer more amenities to consider, including cabin size, lavatory size, and intended number of passengers and luggage.

Business and Pleasure //

Because of the personal approach Jet Linx takes in helping clients find the right fit, each solution can be truly custom. The team at Jet Linx will work with each individual client to develop the best solution for that client’s travel goals. Even in the face of the most diverse travel portfolio, there is likely an aircraft that can fit most of the client’s trips. “You identify an aircraft that handles 80% of your missions, realizing the other time it will be too big or too small for that mission,” Bennett advised. That’s where Jet Linx really shines, because the owner is not just tied to that one aircraft. “We have the availability to help that aircraft owner with lift for the other 20% of their needs. “Say they’re in a midsize airplane, they might need a light airplane to better accommodate a short trip. “Each private jet customer and each business objective is different,” said Bennett. “It’s across the board, in terms of industry, who uses corporate aviation.” For example, consider a Texas client in the oil and gas industry, flying regularly to Williston, N.D. Taking the commercial route, it may take up to two days to reach their destination. Flying privately allows for easy in and out trips, returning home the same evening. “In essence, a private jet is a corporate time machine,” he said. “I think people forget about that. Yes, a corporate jet is a luxury, but it is a business tool. And to get business executives around in a timely manner is value for the company.” The benefits of private aviation extend to other areas, as well. “Private aviation also works for high-ranking government employees, particularly on a state level, to help people make important appearances but also be present for voting,” he said.

Businesses can take advantage of complete privacy when flying in a private jet. “A lot of people say it’s a flying boardroom,” Bennett smiled (pictured at right). “You don’t have one person in 1A and someone in 10D, so you can discuss sensitive business in private. I’ve known companies that travel internationally and have the representatives they’re meeting come to the airport and actually have meetings on the aircraft. It’s a very controlled environment, so that’s one way of guaranteeing security.” Aircraft owners can also take advantage of Jet Linx’s private terminals, available at each Jet Linx location.

An aircraft can help clients get to their potential sale faster. “I’ve also heard clients say that their sales teams made the sale because they were there before their competitors,” Bennett continued. One such client takes its sales team on a round trip during the week, dropping off the team in route on Monday and reversing the trip to pick them up on Friday. “Their people are happy, and home for the weekend, and they don’t have to deal with the airlines.”

Bennett said he sees a mix of business and personal needs for private aviation. “Midsize businesses need to utilize private aviation because it allows them to get to their clients or other offices that aren’t serviced by major international airports,” he said. The ease of traveling to a closer airport, combined with less driving time, fewer nights in a hotel and less stress on employees make private aviation a clear choice. Bennett also noted area retirees’ interest in jet ownership, saying, “Retirees who have worked hard their entire lives want to enjoy the fruits of their labor.” Many fly to visit family, or wish to have an efficient way to bring family close for holidays or vacations. In addition, jet ownership makes traveling with pets a breeze: your pet flies in the cabin with you, often receiving treats from Jet Linx team.

Safety & Consistency //

The luxury of the aircraft is perfectly complemented by Jet Linx’s commitment to upholding the highest standards of safety. Jet Linx holds Wyvern Wingman, ARGUS Platinum and IS-BAO certifications. “With Jet Linx, you know what our safety record is, and we have references across the country who can back up the quality of our product,” Bennett explained. Jet Linx’s internal safety management team works to confirm the safety of each leg of each flight. The same pilots fly the plane, allowing them to be as comfortable with the ins and outs of the machine as you are with your car. “You know the pilots by name, you know about their families, and you build up that trust that you don’t have anywhere else,” he noted. “It gives you absolute peace of mind.”

Aircraft owners are also able to take advantage of travel on shorter notice. “Some aircraft owners want an airplane for the simple fact that it can be spur of the moment,” Vidlak explained. “If you have something pop up at 9 o’clock for a trip tomorrow, your airplane and your crew can be standing by and ready to go. It doesn’t get any better than having your own crew and your own airplane at the ready for you all the time.”

The consistency in crew available with whole aircraft ownership doesn’t necessarily exist in other models. “With some fractional ownership companies, all of the planes are painted identically with the same interior and a different tail number,” Bennett said. This can give the illusion of having the same plane every time, but the crew is different and the environment won’t speak to your unique personality and needs. “When you own an aircraft with Jet Linx, you will have the same airplane – your airplane – with your crewmembers up front, and your stuff in the drawers, your pillows and your blankets in your colors,” he noted.

Customize It //

Having your favorite blankets and pillows on board is just the start of customization available for your private jet. “You can design the interior of the aircraft the way you want it,” Bennett said. “If you don’t like the colors of the interior, or if you want it equipped a certain way, maybe with a couch on board to make sure someone can lie down. Every aircraft offers a solution, so you have to ask what aircraft checks the box for each of these solutions.”

“Some of the most fun I’ve had here is helping owners refurbish an airplane,” Vidlak recalled. “It’s fun, and it gets very personal to the owners. You can design the airplane exactly like you want, with TVs or entertainment centers. You can put your favorite color of leather on the airplanes, favorite paint schemes.” Tail numbers often have significance to a plane’s owner, whether it’s their initials or a special date included in the number, and the exterior paint can be customized to include a business logo, emblem, or other design to the owner’s specifications. “We did one that’s very unique that has no stripes,” Vidlak said. “It’s a pearl white with ghost silver around the door and then the tail is also in that silver. When you look at it from a distance, the tail number almost fades away because it’s metallic.”

Another favorite customization Vidlak has seen was inspired by the owner’s favorite automobile. “We have a client who is a huge Ferrari fan and who loves that Ferrari leather,” he said. “We were able to work with one of our partners to do the Ferrari orange leather in it. It is awesome. It’s very unique because you don’t see that color leather in airplanes.” Another client has custom pillows and blankets with company logos that are placed on the airplane for each flight. An aircraft owner can refurbish an airplane he’s owned for years, or can refurbish one bought on the pre-owned market. “It’s still a buyer’s market,” Vidlak said. “You can find some amazing airplanes out there that are very reasonable, and then have the ability to customize it and make it yours.”

Making the Purchase //

If you’re interested in a pre-owned aircraft, the Jet Linx Aircraft Marketplace is a perfect place to start looking for your next aircraft. Bennett sees clients taking advantage of lower prices in the market, saying they may see aircraft on the marketplace that have the capabilities of a new aircraft twice as expensive. “If you have your budget in mind, do you want to spend that on a new airplane that has a smaller set of capabilities or invest that in a 5-to-7-year-old airplane that can do significantly more? It might have better range or a bigger cabin,” he said. “The values are now in the favor of the buyer. It’s refreshing, because we’re seeing a lot of new people come into aviation who have never owned an aircraft before.”

When buying a pre-owned aircraft, special considerations should be made to ensure that the buyer knows exactly what he is getting. “The advice that I give an aircraft owner is to get a very knowledgeable, reputable aircraft broker,” Welch advised. “Every good broker is going to advise buying an aircraft with an extensive pre-purchase inspection.” He likened the experience to working with a real estate agent. “If all you have is someone who turns the key and says, ‘This is great,’ you’re going to have issues. A reputable agent will point out the water damage and tell you how soon the roof and the water heater will need to be replaced. A reputable aircraft broker is going to make you go through a pre-purchase inspection and ensure that the aircraft you are buying is checked out.”

Bennett pointed out that the separation between Jet Linx, the broker and the pre-purchase inspection agency is a benefit to the client. “A broker’s only focus is acquisition or sale of aircraft. They know each individual market and model of aircraft. They’re experts at negotiation; they’re experts at finding things in logbooks and spec sheets and can advise on that acquisition. Most can advise on things like tax-related issues. They focus on everything having to do with the acquisition,” he said. The same might not be true for a company that houses each area internally. “If you go with a company that has a broker or aircraft sales arm, they’re not as focused. They might conflict – and we don’t deal with that. We work with brokers who have good reputations and act as a team and look for what the client wants.”

Jet Linx partners with both reputable brokers and others in different corners of the aviation industry. “We have the ability to coordinate and install Wifi into an airplane,” Vidlak said. “Jet Linx offers programs for clients who meet certain criteria to subsidize Wifi for their airplane.”

Other aspects of aircraft ownership are less expensive when the jet is part of Jet Linx’s fleet. “Fleet discount pricing applies to fuel, insurance, pilot training, and maintenance,” Bennett advised. “Utilizing our relationships is the best thing you can do. We will find you a list of brokers who provide the highest value and we will collectively move forward in our client’s best interest,” he continued. Jet Linx can also recommend aircraft tax advisors who can advise on tax issues specific to owning an aircraft and who can help explore whether additional tax benefits are available.

Additional Savings //

One method Jet Linx uses to help owners find value in their aircraft is through selling additional hours on the aircraft beyond the owner’s usage. “One of the biggest benefits that comes from a company like Jet Linx is the way we utilize the aircraft,” Vidlak said. “If you have a $5 million aircraft, it doesn’t make a whole lot of sense to put 150 or 200 hours a year on that airplane. But when you add the revenue piece of an additional 200 hours or more per year, the direct operating costs start to go down very rapidly.”

Jet Linx Jet Card clients use the extra hours on your aircraft, and the revenue from the their flights helps cover fixed costs, like training, hangar rent and insurance. Vidlak showed an example of an aircraft management proposal, comparing a super-mid aircraft with 100 owner hours per year to the same super-mid with 100 owner hours and 300 revenue hours per year. “Even with the fixed costs increasing, the cost per hour to the owner is cut down to a third of what it would be without the additional hours,” he explained.

“Jet Linx is unique because we make our own demand, with the jet card,” Bennett said. “Partnering with owners to offset their cost of operation makes aircraft ownership even more powerful.”

Even with the reduced operating costs through Jet Linx, there’s no doubt that a private aircraft is a significant investment. “We have to ask, ‘What is your time worth to you?’ When it comes down to brass tacks, it gets very hard to justify that corporate aircraft,” Bennett related. “But when you look at the expense of people’s salaries, the time away from their families, hotel expenses and the cost of being on the road; having a highly energized workforce outweighs the cost of aircraft ownership.”

If you’re considering jet ownership but aren’t sure whether it’s right for you, Bennett has a simple recommendation. “If you have any questions, concern or curiosity, give us a call,” he said. “We’ll talk about what you’re doing currently and we can talk about the cost and how we can reduce that. Come in and talk to our professionals and we’ll talk you through it step by step. And if it’s right for you, we’ll move forward and talk about how to make it a cost-effective endeavor.”

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