Nothing personal, just business. Probably best describe the business aviation. Private Jet has become a serious business tool that allows you to optimize the most important resource of the modern businessman-time. The globalization of the economy makes constantly moving around the world, one step ahead of its competitors. It is not surprising that in the midst of an acute struggle businessmen often turn to business aviation, and some even think about buying your own aircraft.
Equation with three unknown
There are three main ways to get into the Business Jet. Namely, to rent, to participate in the ownership and buy the plane entirely.
“Charter flights is the budget option in business aviation, they are suitable for the broadest range of travelers, ranging from one-off flights per year to two or three flights per month,” said Alisher Jel’muradov, co-owner of the brokerage company LL Jets.
The cost of the popular Charter destinations from Moscow to Nice, Zurich, Paris ranging 30 thousand. euro on a large comfortable plane type Challenger 605. Jet, for example, smaller Citattion XLS cost 20 k. euro. And if you’re lucky to get hooked on an empty returning Board, price tag, you can knock on 30-50%.
The second option, fractional ownership, implies that a person uses a board quite often, but less than 400 hours per year. A pioneer of fractional ownership is considered to be Warren Buffett’s company NetJets, which practises “unbundling” aircraft with 80-ies of the last century. The scheme is as follows-businessman buys stake in airplane, which corresponds to a certain number of flight hours per year. For example, the proportion of 1/16 plane is equal to 50 flying hours a year and costs about $550 thousand. (small business-jet type Phenom 300 for 9 passengers). The maximum bandwidth is half of the plane, for which the businessman gets 400 hours per year. The cost of the shares is $4.4 million. In principle, these funds in the secondary market can already buy ten-year Citation CJ3 aircraft designed for 9 passengers.
Upon termination of the contract, the businessman returns from the market value, i.e. the amount less than he originally paid. Prefer not to talk about it to a certain point, but buying part of an aircraft, the customer pays a monthly ongoing operating costs. And this is the fuel, maintenance, catering, take-off and landing fees. Depending on the size of the aircraft and the percentage of it running costs can range from $9 600 to $60 thousand. per month. As a result, fractional ownership is becoming a transition stage: more expensive than the Charter, but less costly compared to the content of a private aircraft.
The third option-full ownership of a private plane. In this case, the price tag could range from $3-5 million. for light aircraft to $70 million for the long-haul business jets and $200-300 million. for luxury liners Airbus and Boeing. But the main thing to know is the sum of the contract added significant operating costs. So the size of the operating costs for a few years can easily exceed the cost of the aircraft itself.
The devil is in the details
Will not be superfluous to say that the purchase of a private aircraft is a serious step which involves a risk, lending, international jurisdictions and dozens of other nuances. So do not skimp on consulting: expert advice when choosing a model, selection of the crew, the place of registration of the aircraft can significantly reduce costs for its maintenance in the long run.
Airplanes differ not only in its performance specifications and price, but also on the level of annual operating costs. What they add up? This is the factory price, crew training, aircraft refurbishing, crew wages, insurance, airline management fee, the cost of fuel and maintenance and operating costs (airport and air navigation charges, catering), the size of which depends on the number of flight hours. All of this should be taken into account when making buying decisions, and when choosing a particular model. If the aircraft is acquired not only to confirm the status of the owner, but also with a view to effective use requires careful analysis and accurate calculation. It is important to find the right balance between your needs and preferences, and appropriateness of investing money in private or corporate aircraft.
One of the first and most important decisions is choosing financing: loan or lease. Credit conditions in different banks vary widely and typically are determined individually by a fairly lengthy negotiations with the customer. One of the key points when purchasing new aircraft-find a management company, accredited international bank. This will considerably simplify the procedure of credit and save time. One of the most active players in the banking sector is the Swiss Bank UBS.
As with buying a car, airplane you want to insure. Aircraft insurance services provide both insurance companies and international insurance brokers. The main difference is that the insurance company is liable to the client in full, specified in the policy, and, if necessary, reinsures risks. The broker shall not be liable to the client in the same monetary obligations upon occurrence of an insured event, is a shared responsibility between the insurance and reinsurance companies, which distributed the risk share broker.
Place of registration
Choice of location and type of registration determines the range of possibilities and, conversely, restrictions that gets the owner of the Business Jet. There are two options: commercial exploitation when the plane away from flights time owner performs Charter flights and private-in this case, the plane flies solely in the interests of the owner.
Traditionally popular aviation registries among Russian Business Jet owners considered Europe (Switzerland and Austria), the offshore State (Aruba, Bermuda, Cayman Islands). The truth is that lately there had been some outflow towards new, more profitable aircraft registers. Primarily to Malta and the Isle of man.
In the case of Malta’s interest stems from the fact that the year 2004 with Malta is in the eurozone, and therefore has all the advantages of a United Europe. For Russian Business Jet owners this means free flights for all 28 countries of the European Union. For comparison, if the aircraft is registered in Russia, the permit will take from a few hours to 14 days. By the way, European direction is the most popular among Russians: according to the company Aim of the Emperor, having certificate of Malta, during the year, accounting for at least 70% of all flights.
The second is the undoubted advantage of flexible taxation policy in Malta.
“With Maltese 9W prefix we succeed noticably saving on hendlinge and aviation fuel, experience Irakli owner Litanishvili Aim of the Emperor group of companies. -In contrast to the widely known offshore registries of Aruba, Bermuda and the Cayman Islands, Malta gets a VAT, that allows you to optimize your costs from 20 to 50%. A similar procedure is provided for in hendlinge, where savings of 10-20%.
How much is a plane
Realizing direct and expenditure variables, you can define a cost that await future owner annually. So, popular Russian long-haul Global 5000 business jet costs about $50 million. Direct costs per year-and this fuel, maintenance, crew wages, insurance will manage approximately $1 million 300 thousand. For this you need to add the variable costs that directly depends on how intensively plans to fly the owner. They averaged another $1 million 400 thousand. Total: $2 million 700 thousand. Of course, the high price category planes more expensive in maintenance, while the medium and lightweight classes more economical. So, easy Jet, HondaJet which is capacity 7 people, will cost the owner just approximately $800 thousand. in the year.
Do I need a private plane-you decide. People renting business jets, significantly more than those who buy their own. Business Charter services easier and more economical, but it has downsides. Different operators have different level of service, eventually feeling noticeably vary from flight to flight. There is a risk that you will not be able to order an urgent flight, as well as to accurately predict the cost of movement due to price fluctuations. A private jet is the maximum flexibility, discretion and a familiar comfort at high investments in acquisition and ongoing operational costs.
Russia, St-Petersburg, Efimova 3.
US, New York, Plattsburgh.