Everything you need to know before buying a private jet.
Every teenager craving their own wheels understands the allure of being able to go where you want, when you want, at a moment’s notice. Take two for grown-ups: a private jet. That said, the siren’s call of private jet ownership can toss you against the rocks if you let emotional decision-making leak into the process. This is especially true of buying on the secondary market, which is fraught with additional concerns like service records and pricey upgrades. Enter the Jet Business and the world’s first corporate-jet showroom.
Debuting in London’s Mayfair district late last year, the new Jet Business space – outfitted with features created by London automotive and aviation design firm DesignQ – is an eye-catcher; gawkers get a view from the street of a full-scale replica of a jet fuselage inside. Serious customers, however, have a chance to sit in the space to get a better feel for what they want in their own plane’s cabin.
Jet Business Showroom Courtesy Jet Business
Clients can also lounge in the club-like salon with its wall of screens that display stats, cabin layouts, ranges and more. The brokerage is the brainchild of CEO Steve Varsano – a New Jersey transplant with a résumé that includes stints at XOJET and Virgin Galactic – whose goal was to create a relaxed environment where customers and their teams could buy or sell jets.
However, you don’t need to fly to London or even to the US to find your perfect plane. The most important thing is to identify the right group of people to help you through the process, whether that means assembling your own team or relying on the experience of a trusted broker. Here’s what our crew of experts put on the preflight checklist for any serious buyer.
1. DON’T WING IT
Whether you plan to buy used or new, make a list of your needs and travel habits – but be realistic.
“The first question is, ‘What is your max budget?’,” says Varsano. “Sometimes people will say, ‘I don’t have a budget. I’m just looking for an aeroplane that I really like or need.’ Everybody has a budget.” And don’t forget you’ll need to factor in fuel and pilot costs. You’ll also want to understand your range requirements, so review your calendar with a pen and paper or spreadsheet open to get an unvarnished picture of your travel habits.
“If you’re flying New York to Chicago [the equivalent of Sydney to Adelaide] every week, and then once or twice a year you’re going to London [Sydney to Jakarta], you don’t buy an aeroplane that can go to London,” Varsano explains.
Uncovering the patterns in your travel practices can also reveal hidden needs. Flying more than four hours on average? You might not want to skip the loo.
2. CHECK THAT EGO AT THE GATE
As with any big-ticket purchase, emotion can creep into the decision-making – and perhaps more than a little ego. Try to avoid the social pressure to buy a plane that exceeds your needs. It may sound like schoolyard one-upmanship, but it happens all too easily.
“I always tell this story,” says Kevin O’Leary, president and founder of Jet Advisors and a member of Robb Report’s Private Aviation Advisory Board.
“I had one client lean over to me and go, ‘What aeroplane does Auggie have?’ I kind of figured out it was August Busch because we’re in St Louis. The Busch family [of brewers Anheuser-Busch] lives there. And so he didn’t want to show up at his reunion for prep school and have a smaller plane than Auggie.”
Of course, if better means bigger in your personal maths, then open that wallet wide – but still take into account No. 3.
3. THE REAL COST OF ‘UPGRADES’
From complete cabin makeovers to the newest whizbang avionics systems, the list of features jet owners can upgrade with is about as long as a corporate tax return. However, as a shopper on the secondary market, consider the real value of these modifications, as they can significantly raise the asking price and may be totally useless.
For instance, a seller may try to convince you of the value of a certain device because it reduces pilot workload. But how much time is it actually saving? If it’s five minutes, it’s probably not worth the hundreds of thousands of dollars it adds to the sticker price.The same is true for avionics systems.
“‘Well, they said it’s safer.’ Okay, has there been an accident yet? You know statistically it’s baloney,” says O’Leary. “There’s no statistical validity to it being safer to have the newest avionics suite.”
Oh, and that spacious remodelled cabin with fewer seats and more legroom? It may cost you when it comes time for resale, as most buyers prioritise seating more people.
4. TAKE THE 10,000-METRE VIEW
If you plan to hang on to the jet for a while, you’ll want to anticipate changes in your life that could affect your needs. For example, you may want a large jet now for family holidays, but once the kids move out, do you still need the big one?
The same thing goes for executives stepping back from the day-to-day. How might technological developments affect your needs?
Do you really need a plane with in-cabin entertainment systems if it already has fast wi-fi?
Passengers can play games or watch movies through their personal devices, and you can still email large files to your execs. However long you plan to keep the plane, it’s important to have an exit strategy as you’re making the purchase, says Colby McDowell, managing director of acquisitions for US management consulting company, the VanAllen Group.
“A full understanding of how long one intends to own the aircraft, associated depreciation schedule, and the book values versus the expected market values ... will reduce surprises downstream.” This takes some of the seduction out of it, but that frisson will return when you walk up the steps of your first jet.
Article from Robb Report Australia & New Zealand's latest Autumn Edition.