MEBA Buyer's Guide: Private Air Travel Options

MEBA Convention News » 2008
November 10, 2008, 6:09 AM

Some say that once you’ve tried business or private aviation you will never want to go back to the airlines. That may well be true, but this very special mode of transportation can still seem quite a strange and confusing choice, especially in parts of the world like here in the Middle East where, until fairly recently, it has been restricted to very small groups of top VVIPs.

Business Jet Traveler magazine (www.bjtonline.com) is published by the Aviation International News (www.ainonline.com) group and is a sister publication to MEBA Convention News. Each year, it publishes a Buyers’ Guide, with a comprehensive array of expert advice on every aspect of business and private aviation. This completely independent Buyers’ Guide is intended to give newcomers all the information they need to make wise choices and get everything they want from the industry.

“If I took a private jet to Bahrain, I could save a whole travel day on both ends.” When a thought like this pops into your head, it can trigger a process that ends up as a positive life-changing experience–or one fraught with frustration. As with most things, the more time you spend in preparation, the better the outcome is likely to be.

Like real estate, private jet travel really offers only two basic ways to get involved: renting and buying. Everything else is just a variation of these.

Think of chartering aircraft as the equivalent of renting a house. Owning an aircraft is the equivalent of owning a house. Owning a fractional share in an aircraft–the option first popularized by NetJets (Chalet No. 35)–is the equivalent of owning a timeshare in a house or apartment.

Decide Where You Want To Go
The lowest cost way to experience an executive aircraft for the first time–besides taking a ride in your friend’s jet–is to charter a flight.

The first step is to decide exactly what you want the flight to accomplish. As simplistic as this may sound, it has more significance than even some experienced air travelers realize. If you are like most airline passengers, you probably don’t pay much attention to the makes and models you fly on. But when you use private air travel, you have numerous choices in aircraft size, comfort, speed and range.

All aircraft represent compromises and are constrained by the irrevocable laws of physics. Some models trade cabin space or short-runway capability at mountain airports for range and speed–or vice versa. For example, to get intercontinental range, you usually need a relatively large airplane. But the bigger the aircraft, the more it costs to fly, buy and rent.

So you need to pin down where you plan to go, how far this is from where you are, how many people you want to take and when you need to be at your destination. You don’t need to calculate the distance to the tenth of a mile; round numbers will do. And you don’t need to know the exact airports you’ll be using.

Because private airplanes have limited seating, you’ll need to be sure how many passengers you are going to want to carry. Just one extra person can make a difference in the airplane required. You’ll also need to figure how much baggage you’ll be bringing, including anything particularly bulky, like golf bags or skis.

Deciding when you need to travel is critical. The more notice you can give a charter operator, the better the probability that you’ll get what you need. Of course, you may get lucky and charter an aircraft on a moment’s notice. But if you’re a first-time customer, the longer you give yourself for preparation and the more notice you can give the operator, the happier you’ll be with the result.

Talk To Some Experts
After doing this preliminary homework, expand your knowledge base by talking to experts. Friends with experience in private air travel are a good place to start. Though they may not be experts in all aspects, they can certainly share what they’ve learned. Ask for their recommendations.

Charter brokers are another good source, but be careful. Good brokers won’t tell you about the thousands of aircraft they have in their fleets, because the truth is brokers don’t have fleets. What brokers, such as Air Charter International (Stand No. 523), have is access to charter operators who have airplanes available. Ask your friends for recommendations.

You should also consider using online charter information services such as Avinode (Stand No. 200) and companies like Charter X Wyvern (Stand No. 340) which audit charter operators for quality and service.

An even more hands-on approach is to visit a charter operator at your local airport. A good place to start is at the private aviation terminal building, or FBO. The manager ought to be able to show you around. If he doesn’t, go somewhere else.

If you take these steps, you’ll have the confidence to make a good choice of the aircraft you need, a broker you can trust (if you want to use one) and a charter operator that can safely and smoothly handle your flight.

Getting Serious About Flying Privately
Now you’ve gone and done it. After one flight in a private jet, you’re hooked. What do you do next?

If you have the money, you could buy an airplane at this point. But even if you can do this, you’d be wise to curb your desire to write that big check for a while. Many a new aircraft owner has regretted his purchase after learning later that he could have saved millions of dollars if he had taken more time to learn the market and understand the ins and outs of operating an aircraft.

One way to gain more experience is to buy flight time using one of the jet cards, which should offer you preferential charter rates and guaranteed access to aircraft in return for making a payment upfront. As with debit and phone cards, you make a fixed payment to the jet card company for time in a given size airplane. Details of the plans differ, so it makes sense to investigate several and read the fine print. Jet cards are really just a more formal way of packaging “block charter,” something charter operators have been offering for years. The big difference is that while operators openly market details about their jet card programs, they say little publicly about their block-charter offerings.

Evaluate Fractional Ownership
When you buy a fractional share of an aircraft–even if it is as small as a one-sixteenth share that gives you 50 flight hours a year–you become an owner. It may not always feel that way because you must share your airplane with many other owners. In fact, you may never actually fly in the airplane that you own part of. But to most fractional shareowners, this doesn’t matter.

What they like is the consistency provided by fractional ownership and the elimination of some of the hassles of ownership. For example, the fractional manager handles the maintenance, dispatch and hangaring of the aircraft; the hiring, training and scheduling of the pilots; dealings with the authorities; and insurance. You do pay for these services, of course, via the initial payment purchasing the share, a monthly management fee and a fixed flight-hour charge. The term of the agreement generally is five years, after which the provider promises to buy back your share at a price based on fair market value.

Consider Buying a Whole Airplane
The ultimate goal for many private air travelers is buying and operating their own airplane–all of it. If you’ve been chartering for several years or have owned a fractional share, by the time you get around to considering full ownership, you should have a good idea of which models will fulfill your needs.

Full ownership gives added flexibility and control over the other options we’ve discussed, but also adds costs, responsibilities and headaches. You can set up your own flight department and handle some or all of the tasks that charter operators or fractional providers do, or you can pay someone else to do them. This is called “aircraft management,” and is done by companies that may also offer aircraft for charter. In fact, a very large proportion of all charter aircraft are not owned by the charter companies that operate them, but by individuals and corporations who have handed over their airplanes to the charter companies to manage and charter.

Buying or leasing a multimillion-dollar aircraft, new or used, is much more complex than buying an expensive automobile or even a multimillion-dollar house. You must consider and answer many questions, including:

• Which model aircraft should I get? Should I opt for new or used? How should it be equipped?

• What insurance do I need?

• Should I charter the aircraft to earn revenue?

• What taxes do I have to pay?

• How do I finance the purchase?

• Should I form a separate company for my flight department?

To help answer those questions, numerous aviation consultants, brokers and lawyers are available to shepherd you through the process.

On the following pages, we offer you some of the highlights from the latest Business Jet Traveler Buyers’ Guide. The second half of this guide will appear in tomorrow’s edition of MEBA Convention News with more tips on getting the best from business aviation. The guide is available online at BJTonline.com. A hard copy can be purchased by contacting: circulation@bjtonline.com.

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