5 Key Mistakes to Avoid When Buying a Business Jet
Business jets can free you to see more of the world and bring you closer to clients. These assets require careful consideration and trustworthy advisors. A rule of thumb is that you’d need to fly at least 240 hours per year for private jet ownership to pay-off. If your demand is far below that, hiring private jets as needed is more cost-effective and offers greater flexibility because you can pick the jet that is right for each trip.
Here are some of the critical mistakes to avoid when buying a business jet:
1)Picking the wrong aircraft size for your needs.
You may have been attracted by the latest flashy jet to unveil at the airshow or a great looking jet you found online. Before you start the process of acquisition, you need to be sure it suits your needs. You should have a good idea of the most frequent flights you’ll make, knowing which cities and which airports you’ll fly between, and how many flight hours you are likely to make per year.
Define the operation clearly up-front. Will you primarily fly for business or family trips? These factors may affect the features you’ll need most on your aircraft.
Industry statistics show that the most frequent business jet flights are between two and three hours, and operated on light jets or very light jets. If you know you’ll be traveling frequently with more passengers than the light jet category might suit, then sizing up makes sense. You will want to ensure that your aircraft has the seating and luggage capacity you need.
Know your aircraft’s take-off and landing distance requirements. You need to ensure that the aircraft you are considering can safely land and take-off at the airports and airstrips that you’ll visit most often.
Consider taking your future aircraft for a test flight, by booking a few private flights on the same model jet, or a similar sister jet, before you commit to ownership. As you fly, take careful note of how the experience compares to your expectations. Does this aircraft really suit your needs? A LunaJets advisor can help you book private test flights on the aircraft type of your future private jet and others in the same aircraft category for comparison.
After you buy your right-sized jet, you can always book private flights for special missions that go beyond the scope of your own aircraft.
2)Forgetting to factor-in cost of ownership
The costs of jet ownership should be considered as carefully as the initial acquisition costs of the jet, as they can add up to anywhere from double to five times the cost of the aircraft and they are an ongoing annual expense for however long you own the aircraft.
Ownership costs vary, corresponding to the aircraft’s size and age and your type of operation. Larger aircraft require larger engines which consume more fuel, even on shorter flights. If you perform those 240 annual flight hours with average 2.5 hour flights on a light jet, your fuel costs will be lower than the same operation on a larger jet.
The costs of maintenance for an older jet will be significantly greater than a newer aircraft and some older jets may have to be brought to compliance with recent service bulletins and new regulatory requirements.
Factor-in the costs of proper aircraft storage, either in a hangar or an outside tie-down, ensuring your aircraft is safe and properly maintained during downtime. Some pricey interiors features, such as wood veneers or leather seating, are affected by climate conditions and may deteriorate and require replacement if your aircraft is not properly stored. Critical safety equipment, such as life jackets and life rafts, are also affected by prolonged heat exposure and might need to be replaced. Continuous exposure to low temperatures can affect aircraft tires, which can cost thousands to replace. Each aircraft has documented maintenance and storage requirements from the OEM which should be reviewed carefully and factored into the buying decision.
Hiring qualified crew, both to fly the jet and for passenger services, is also an ongoing cost. Besides their flight time, crew will need to have housing available during longer trips.
Other costs to consider include fixed-based operations services, routine aircraft cleaning and maintenance, registration, operating licenses, taxes and insurance.
3)Not conducting a thorough aircraft health check
If you are buying a pre-owned jet, you should have a thorough evaluation of the aircraft’s health performed by a qualified aviation maintenance expert to avoid unpleasant surprises. Your jet should have complete records for all maintenance performed throughout its service life. That should include the documentation for any custom work performed or parts installed. Otherwise, you may have to re-certify, or replace certain components before the aircraft can be cleared to fly. If you wish to refurbish the plane, you should get expert advice to avoid extended out-of-service time and cost overruns.If you are buying a pre-owned jet, you should have a thorough evaluation of the aircraft’s health performed by a qualified aviation maintenance expert to avoid unpleasant surprises. Your jet should have complete records for all maintenance performed throughout its service life. That should include the documentation for any custom work performed or parts installed. Otherwise, you may have to re-certify, or replace certain components before the aircraft can be cleared to fly. If you wish to refurbish the plane, you should get expert advice to avoid extended out-of-service time and cost overruns.
4)Waiting too long to arrange financing
If you will finance your aircraft purchase, you need to begin planning that process early on. Buying a jet is far more like buying a building than a car or a house. The financing process can take anywhere from weeks to months.
5)Failing to find expert advisors at the beginning of the process
Think of buying a private jet as adding a new division to your corporation or buying a new company. The complexities of regulations, legal requirements, financial considerations, staffing, and asset evaluation are a good parallel. Having trustworthy experts at your side, who know the business jet market, can make all the difference between owning a jet that will be a useful tool for growth or being grounded with a jet that you can’t easily off-load.
At LunaSolutions, we specialize in guiding aircraft buyers and sellers through the maze of regulations, tax requirements, financing, and aircraft operations, ensuring you have no cause to regret your decision to become a private jet owner. Take to the skies with confidence that you’ll land safely.