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Braniff1
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Cost of owning a private jet?

Mon Jun 12, 2017 3:36 am

There are so many types of aircraft; I would like to know what it cost to have a private jet. Being familiar with yacht cost, usually 10% annually of purchase cost; I wonder is there a similar figure for a jet. It would seem obvious that a Lear compared to a G-650 for example, there would not be a consistent factor. Then when thinking about such birds as a 737 BBJ, a bigger 767, A-340, a 747 or supposedly there is a private A-380; my mind gets lost trying to comprehend. I can't imagine what something big cost just to maintain above and beyond fuel, crew, etc. I do realize that if a person can afford such aircraft, yes they can afford the upkeep. Just wondering, appreciate any insight.
 
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Francoflier
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 4:01 am

Braniff1 wrote:
. I do realize that if a person can afford such aircraft, yes they can afford the upkeep


Can't help you much with your query as this is way out of my league, but from friends who work in operations/maintenance in major FBOs and dealing with such customers, you'd be surprised how many of them buy brand new Gulfstreams or Falcons only to neglect them and leave them rotting away on a ramp somewhere.

The 'nouveau riche', especially in Asia, like to splurge on status symbols without really looking at the underlying cost equation in the long term.
I'll do my own airline. With Blackjack. And hookers. In fact, forget the airline.
 
BravoOne
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 9:54 am

You can find industry standard cost for corporate jet ownership simply by selecting the aircraft model and spending sometime with Google. Most manufactures supply this data for all their products.. Of course it's probably weighted to the positive side:) There use to be a couple of guys (Conklin?) that created this da for all the corporate fleets, but I can't recall the full name, nor do I see it when I do a Google search.
Basically your looking at Fixed Costs + Direct Operating Costs + Depreciation, Etc. Not for the faint of heart. The fact is, it's pretty hard to make a solid case for aircraft ownership other than I want one, and my time is worth XX dollars, then it works out perfectly. it helps if airline service to you frequent destinations is minimal or non existent.

I found it:

https://www.google.com/aclk?sa=l&ai=DCh ... IIg&adurl=
 
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zeke
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 10:01 am

BravoOne wrote:
There use to be a couple of guys (Conklin?) that created this da for all the corporate fleets, but I can't recall the full name, nor do I see it when I do a Google search.


Sounds like Conklin & de Decker
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BravoOne
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 11:40 am

zeke wrote:
BravoOne wrote:
There use to be a couple of guys (Conklin?) that created this da for all the corporate fleets, but I can't recall the full name, nor do I see it when I do a Google search.


Sounds like Conklin & de Decker


Yes Zeke, I think that's where the link will lead you.
 
Braniff1
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 3:29 pm

Thanks BravoOne, appreciate the link and information. I'm a dreamer, been in love with aircraft since I saw my first DC-3. I'm old enough now that I can afford to give my left nut and it would be worth it to have a nice lil' G- anything. Dreaming on, is about all I can do.
 
Flighty
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 7:16 pm

If you can afford it, get a charter or an open leg. You'll have a memory of what it is really like for few thousand bucks or $10,000.

There is really no answer to your question though. Many jet owners neglect them. Let's say you own a Gulfstream IV. You paid $10m for it. You keep it in a hangar. You hire pilots on an as-needed basis from your local community, a large city. This is a case I actually know about. What is your annual bill? No idea but my guess is $1m plus.

Running a personal flight department (like Donald Trump did) costs more. Who knows... $5-10m annually. A "real" billionaire like Paul Allen might spend even more.

This is why sharing jets is a better idea.

How about Oprah?
 
BravoOne
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Re: Cost of owning a private jet?

Mon Jun 12, 2017 8:30 pm

I asked once and how much are you budgeting for this flight department and the answer was, "What budget, there is no budget we do whatever it take" so if can answer that you probably can afford he airplane of you choosing. $5 to $10M won't get you squat if that's where your coming from and looking at a large cabin airplane. Anyone who crews an airplane exclusively with off the street pilots is to dumb to own the airplane in the first place.
 
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flyingturtle
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Re: Cost of owning a private jet?

Tue Jun 13, 2017 10:32 am

if you want to make a good figure at the cocktail party, just buy an old 737 or 320 and have it stand around somewhere.

You can also look at wet lease prices to get an idea. ACMI stands for "aircraft, complete crew, maintenance, and insurance" (which will be included in the lease price), while fuel, fees and taxes are paid for by the lessee.

David
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frmrCapCadet
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Re: Cost of owning a private jet?

Tue Jun 13, 2017 12:35 pm

https://www.netjets.com/AboutNetJets/Be ... -Hathaway/

In a quick search I did not find out what they charge an hour, but assuming a 10-20% profit margin that would put you in the ballpark.

This link shows some hourly rates. They are high, but even higher middleclass income could afford to do it a few times in their lifetime.

https://www.paramountbusinessjets.com/p ... icing.html

Some business major could easily give a first cut given the cost of the plane and hourly rate for capital costs versus operating costs
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26point2
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Re: Cost of owning a private jet?

Wed Jun 14, 2017 12:01 am

Our operation is based in SF Bay Area/N. California. We have 1 Global Express, 6 employees/salaries/benefits, hangar/office/shop space, insurance and other associated fixed costs= $2 million per year..and that's just the fixed costs. If you want to go flying that will cost an additional $7000 per hour plus crew (3) overnight expenses.

You gotta pay to play.
 
LH707330
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Re: Cost of owning a private jet?

Wed Jun 14, 2017 3:37 am

If you have to ask, you can't afford it :D
 
frmrCapCadet
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Re: Cost of owning a private jet?

Wed Jun 14, 2017 4:27 pm

LH707330 wrote:
If you have to ask, you can't afford it :D


This always gets quoted, but really a useless answer. It is not just a matter of how much money. Rather how many hours a year is someone or their business going to use a plane. How many thousands are they spending on first class or business. How many people will be flying at a time. Also involved, does someone really want to be involved with all of the business headaches of owning a plane, hiring several people, insurance, regulations etc.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
gtae07
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Re: Cost of owning a private jet?

Thu Jun 15, 2017 11:30 pm

frmrCapCadet wrote:
LH707330 wrote:
If you have to ask, you can't afford it :D


This always gets quoted, but really a useless answer. It is not just a matter of how much money. Rather how many hours a year is someone or their business going to use a plane. How many thousands are they spending on first class or business. How many people will be flying at a time. Also involved, does someone really want to be involved with all of the business headaches of owning a plane, hiring several people, insurance, regulations etc.

Somebody left their sense of humor at home today ;)

Francoflier wrote:
Can't help you much with your query as this is way out of my league, but from friends who work in operations/maintenance in major FBOs and dealing with such customers, you'd be surprised how many of them buy brand new Gulfstreams or Falcons only to neglect them and leave them rotting away on a ramp somewhere.


We see lots of airplanes that just get parked without proper storage measures, and neglected. Other times, people buy a secondhand (or thirdhand, or fourthhand...) airplane and want to string it along on the cheap.

The maintenance costs on a large-cabin jet can be eye-watering to us regular Joes. I have carried electronics modules that cost more than my house.
 
GalaxyFlyer
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 2:13 am

My experience involved in selling them (demo pilot) is that to a person/family that makes 100 million+ USD annually owning a large cabin business is like an pilot owning c-class Mercedes sedan or a full dress F-150. Think about it, roughly $4-$6 million per year for 400 hours per year is, percentage about the cost of car to a person making $100,000 per year--5%. Yes, the numbers have more zeros, big deal.

The comfort, security, convenience is unobtainable otherwise. I know of several headline names that have their jet and one for their wife--in case traveling to different locations today. Some owners have their own departments and personnel; others have the plane on a management contract like Executive Jet Mgt (a Net Jets company) or Jet Aviation. They select the people, pay the bills and the Lead Captain and management firm takes care of everything.

To the comment on neglect--every single operation I've visited (it's at least a hundred) was spotless, no expense spared, first class all the was. The "boss" frequently are flying 300-600 hours a year and would not have it any other way.

GF
 
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fbgdavidson
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 2:42 am

"If it flies, floats or f**ks rent it."

A few years back I was in a social/professional circle that involved people who owned King Airs, Citations, Lear 60s etc, and it made me think that if I win super huge on the lottery I'd love to have a small/midsize jet for domestic travel. Problem is I have to play the lottery first :biggrin:

Interestingly the wealthiest of the lot from that group drove a Lexus LX and when he flew to Europe for vacation he went VS Premium Economy! For his own King Air 350 (which was subsequently upgraded to a Phenom 300) he had his own private airfield, hangar, dedicated crew etc. I would have eaten food off the floor of that hangar, it was that spotless. He owned a business that operated all over the east coast and would need him to fly to smaller airfields quite far from commercial air service on a very regular basis, almost daily Monday-Friday, sometimes they'd squeeze 6 legs in, 4 was very common.
"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
 
26point2
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 5:34 am

Owning and operating a jet is expensive. I have never owned a jet but I have operated several for over 30 years so familiar with costs. I've seen plenty of wannabe types with their grand ideas and their beater G-IIIs or ultra small jets that they can barely afford. They come and go...way out of their league for one reason or another...usually ego over bank account. Many uniformed folks posting on this site have no clue.
 
dw747400
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 3:20 pm

I've seen plenty of wannabe types with their grand ideas and their beater G-IIIs or ultra small jets that they can barely afford.


I can second this. I have seen several occasions where a private individual or small company decides they can buy an old GIII for the price of a nice King Air 200, so why would they pass up a large cabin jet for a turboprop? They find out quickly that big jets are not easy nor cheap to operate, especially older big jets! Even if you found a nice GIII, it can easily bleed a mere millionaire dry.

Worst case I'm aware of was an uniformed owner who saw an old Lear 25 for sale for around 100K and snatched it up. That operation did not last long--not only was the aircraft horrendously expensive to run, it was non-RVSM and he did not have the cash to upgrade it.

That said, there are a lot of operators who know what they are doing, and folks that deal primarily with late model, large cabin jets probably don't see how crazy the low end of the market can get unless they happen to park next to an old Hawker that is falling apart!
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BravoOne
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 6:23 pm

The fact is new large cabin aircraft are selling reasonably well these days whereas large cabin GIV, GV, Challengers and Falcons are in the dumps. Amazing what can be bought these days compared to what people were paying for these same aircraft five years ago.
 
Flighty
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 6:38 pm

Here is a gorgeous looking Giv for $3.25m asking (I am not affiliated with the aircraft just hoping to add discussion)

https://www.controller.com/listings/air ... fstream-iv

How much per year to give this aircraft a nice life? I don't think this buyer would want to budget over $750k/yr. Could it be done well?
 
BravoOne
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Re: Cost of owning a private jet?

Fri Jun 16, 2017 9:31 pm

Well the the cost of OH on those engines is around 2M or more depending on what they find. Not sure about the LG OH, As Im sure Flighty knows when you make an offer on an airplane like this it usually comes with a pre-buy inspection the cost of which is born by the buyer. Anything shows up becomes negotiable for the seller and is usually written in a contract.

One of the big deals in the 1980 vintage aircraft is compliance with NEXT GEN avionics. One could by this airplane and not be able to fly it above FL350 or worse.
 
GalaxyFlyer
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Re: Cost of owning a private jet?

Sat Jun 17, 2017 4:15 pm

The problem is $3.25 million jet's cost of operation is more like the brand new plane's cost of operation or more. The entry price may be down but not the operational cost.

GF
 
Flighty
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Re: Cost of owning a private jet?

Sun Jun 18, 2017 6:33 am

Thanks GalaxyFlyer, that is a succinct way to put it. So the G-IV buyer needs to be just as much a billionaire as a G-V or G-650 buyer basically. Good point.

I can't see how jet ownership works for mere mortals. Ordinarily you have to keep utilization up to pay off your fixed costs. In the case of depreciated jets, you can have lower utilization. But you would have to crew it informally. If you fly that G-IV say 125 hours / year. I don't know how you crew that.
 
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marvelguy
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Re: Cost of owning a private jet?

Sat Jul 29, 2017 11:15 am

If you are looking for a private jet, then you must first concentrate on the expenditure for a private jet. In a nutshell, the cost of the jet can vary from $1 to $100 million. For sure, it depends. If we're talking about private jets for sale, there're plenty of them - Boeing, Dassault, Gulfstream. Some of the other cost are a bit more consistent. You can crew the aircraft for around $1k per day, fuel is obviously proportional to distance traveled; i.e. fuel to Las Vegas from San Francisco might cost around $4k. Yeah, planes are not the cheepest things in the world ;)
 
wingscrubber
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Re: Cost of owning a private jet?

Fri Sep 01, 2017 9:40 am

Good article here:

https://jetbroker.blog/2010/07/19/what- ... ng-turkey/

I think one of the clever distinctions made by those in the know, is that one does not simply 'own' a business jet, one sets up a front company to buy the business jet with a loan from the bank, who will be in charge of allocating time in it for you, but also renting it out to other users to make it pay for itself.
So, you need a second front company then to employ the pilots, who are able to fly not just your business jet but also some other types as well when needed. Finally you need ground support which likely would be a third party but hell why not just buy an FBO for yourself with your own maintenance crew, and rent that out as well.

So, that means you have your business jet owned by one of your companies for yourself but also for hire, and then you have your pilots who can fly for you in your plane but also other planes, and possibly even your own mechanics and a fuel bowser. The pilots, the mechanics and the aircraft are assets that in theory, can pay for themselves, as one person can only take so many flights, right?

That's my limited understanding of it anyway, what a wonderful problem that would be to have!
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BravoOne
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Re: Cost of owning a private jet?

Fri Sep 01, 2017 1:18 pm

wingscrubber wrote:
Good article here:

https://jetbroker.blog/2010/07/19/what- ... ng-turkey/

I think one of the clever distinctions made by those in the know, is that one does not simply 'own' a business jet, one sets up a front company to buy the business jet with a loan from the bank, who will be in charge of allocating time in it for you, but also renting it out to other users to make it pay for itself.
So, you need a second front company then to employ the pilots, who are able to fly not just your business jet but also some other types as well when needed. Finally you need ground support which likely would be a third party but hell why not just buy an FBO for yourself with your own maintenance crew, and rent that out as well.

So, that means you have your business jet owned by one of your companies for yourself but also for hire, and then you have your pilots who can fly for you in your plane but also other planes, and possibly even your own mechanics and a fuel bowser. The pilots, the mechanics and the aircraft are assets that in theory, can pay for themselves, as one person can only take so many flights, right?

That's my limited understanding of it anyway, what a wonderful problem that would be to have!




Unfortunately your business has more holes in it than a LB of Swiss cheese both from a financial point as we'll as a regulatory perspective. Let us know how it works for you.
 
dw747400
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Re: Cost of owning a private jet?

Fri Sep 01, 2017 8:20 pm

BravoOne wrote:
wingscrubber wrote:
Good article here:

https://jetbroker.blog/2010/07/19/what- ... ng-turkey/

I think one of the clever distinctions made by those in the know, is that one does not simply 'own' a business jet, one sets up a front company to buy the business jet with a loan from the bank, who will be in charge of allocating time in it for you, but also renting it out to other users to make it pay for itself.
So, you need a second front company then to employ the pilots, who are able to fly not just your business jet but also some other types as well when needed. Finally you need ground support which likely would be a third party but hell why not just buy an FBO for yourself with your own maintenance crew, and rent that out as well.

So, that means you have your business jet owned by one of your companies for yourself but also for hire, and then you have your pilots who can fly for you in your plane but also other planes, and possibly even your own mechanics and a fuel bowser. The pilots, the mechanics and the aircraft are assets that in theory, can pay for themselves, as one person can only take so many flights, right?

That's my limited understanding of it anyway, what a wonderful problem that would be to have!




Unfortunately your business has more holes in it than a LB of Swiss cheese both from a financial point as we'll as a regulatory perspective. Let us know how it works for you.


Indeed. As one charter operator pointed out: if the numbers worked easily, every bank would be lining up to loan money to anyone who wanted to lease an airplane to a charter operator. In reality, a leaseback arrangement (which is far more common than starting your own charter company) can help offset the ownership costs of a jet, both through revenue and tax benefits, but the instances where a plane pays for itself or turns a profit are few and far between.

In fact, the willingness of business jet owners to leaseback airplanes at a loss has made charter more competitive. As you can imagine, when you are willing to lose money--so long as it is less money that you would otherwise lose--your prices can be quite competitive. Charter operators that own their own fleets often need to get creative to compete, such as serving special niches, creative and aggressive marketing, and large fleets that lend themselves to economies of scale.
CFI--Certfied Freakin Idiot
 
GalaxyFlyer
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Re: Cost of owning a private jet?

Fri Sep 01, 2017 10:51 pm

Usually, the jet is operated by a management company who handles crewing, maintenance and accounting. IF the owner wishes to charter, the mgt company can handle that aspect, too. Issue being the mgt company must have the crew and plane on their 135 certificate and the owner willing to pay the extra training and maintenance costs. Lots of tax and legal implications.


GF

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