Purchasing a Private Jet: Frequently Asked Questions

Jan 7, 2020 | Private Jet Travel

If you’re looking in to purchasing a private jet you’re probably teeming with questions.

 

As expensive and complex as the sale is, you need to get advice from the experts. Brad Drew, Jet Linx Senior Vice President of Sales, weighs in on some broad questions relating to aircraft purchases.

 

Private jet ownership affords the full freedom of the skies

1. Is it better to buy new or used private jet?

This is a broad question, and you’ll get different answers depending upon whom you ask. Consider the following three elements: the initial purchase price, the operating costs (including offsetting charter revenue), and the devaluation of the asset over time.
New airplanes have a higher purchase price but lower operating costs (thanks to warranty). In general, major maintenance and inspection costs are relegated further into the future. Newer aircraft can be more efficient (climb faster, burn less fuel, require less maintenance) than used ones.
If one were to graph (by year) purchase price and operating costs over time, it generally creates a U-shaped curve. Newer airplanes have a higher purchase price vs. operating costs – but these switch over time. The sweet spot for purchase price versus operating costs is generally with aircraft that are five to fifteen years old.

2. Are newer private jets safer?

No. Different aircraft may have different equipment and offer different levels of performance capabilities. There is not, however, a different level of safety between new and used private jet.

3. What if I buy a used aircraft and update it? Is that a good option instead of buying a new private jet?

Upgrades to equipment, paint, and interior are always possible, but sometimes the retrofit cost and downtime makes this process undesirable. When you consider residual value, upgrading an older model may not make economic sense.
It is tough to say you should or should not do this. This is a great example of when you should consult with Aircraft Acquisitions & Sales experts at Jet Linx.

4. What about fractional ownership?

You can always consider a fractional share in a private jet, but beware of the disadvantages. Fractional shares mean lower residual value, limited aircraft choices, fewer financing options, and the fact you only own part of an airplane.
You are restricted in what you do with that asset, as it has to remain part of the fractional operators program. Transferring a ¼ share to another operator doesn’t really work.
The cost of owning a private jet may be lower than a fractional share when you look at the total impact of whole aircraft ownership. This includes purchase price (new vs. used), financing costs, operating costs, offsetting charter revenue and residual value.

Additional Considerations

Other considerations include how long you plan to own a private jet, what kind of financing you’re going to use, and crew hiring. Certain aircraft types have a limited supply of pilots, and training costs can differ from aircraft to aircraft. The looming pilot shortage casts new light on the impact of pilots to the ownership experience.
The right solution for you may be completely different than someone else. Engaging with Jet Linx Aircraft Acquisition & Sales experts is your best bet when you’re purchasing a private aircraft. They will guide you from your initial offer all the way until takeoff. Jet Linx also offers a comprehensive aircraft management solution to ensure your ownership experience is hassle-free.