Despite the overall slower economic growth in the past few years, the number of billionaires in Europe rose by almost 20% during the last year alone. As a result, the region has witnessed an increase in demand for business jets. It is expected to receive up to 1700 business aircraft deliveries between 2013 and 2022, thus maintaining its position as the second largest market of business jets. However, while the encouraging economical numbers seem to favour investing into business aircraft, the potential operators might want to think twice before making the actual decision.
Europe’s ability to generate wealth during a marked economic downturn bodes well for the future of the business jet industry in this region. This conﬁdence is reﬂected in Bombardier’s 20-year delivery forecast. According to the manufacturer, Europe will remain the second largest market of business jets with 1,670 aircraft deliveries between 2013 and 2022 and 2,230 deliveries between 2023 and 2032. In addition the CIS countries are also experiencing one of the highest growth rates in ﬂeet, and are forecasted to receive over 1500 by 2032. However, more and more industry experts seem to doubt the financial propriety of actually owning a jet of one’s own.
“The statistical data suggests that the world’s economy should grow by approximately 3% over the next 20 years. Such conditions may become encouraging for investment into a private aircraft, especially for those, whose business activities rely heavily on one-on-one meetings, which imply a lot of travelling. However, prior to proceeding with the actual investment the potential operator needs to consider not only one’s actual travelling needs, but also the resources needed to maintain the airplane,” shares Vitalij Kapitonov, the CEO of KlasJet.
Jet prices range from $3 million to $90 million. However, depending on the size and the age of the aircraft, it can cost between $700,000 to $4 million per year to own and operate the machine. Even for a small aircraft like a Cessna 172, the operating costs can reach $100-$200 per flight hour, summing up to a $6,000 in fuel alone per year. However, if you take a Gulfstream G550, which may cost from $40 million to up to $70 million, the situation is different to say the least. The operating costs of such an aircraft can reach as much as $4,300/hour or even more, while overall ownership expenses (including maintenance, storage, crew costs and insurance) could reach approximately $600,000 per year.
“Owning a private jet offers total freedom and flexibility on an unparalleled level for those who need to fly regularly and at short notice. However, crew salaries, required training costs, scheduled and unscheduled maintenance, hangar rent, insurance, avionics software updates, and many other expenses must be paid to keep the aircraft ready to fly when you need it. As a result, usually, the lowest operating cost per flight-hour can be achieved if you own an aircraft when your annual utilization is above 240 hours of flight-time,” comments Vitalij Kapitonov.
Of course, most jet owners acquire an aircraft not because they need to own one but because they want to. However, managing a multimillion-dollar machine is still a full-scale business many owners may want help with. In such a case, according to the executive, considerable money savings can be achieved by entrusting your private jet to a fleet management provider, which has the experience and the capabilities to support the daily needs of the aircraft. Moreover, by allowing one’s aircraft to be utilized on other flights, the owner can actually earn money, instead of constantly paying for downtime. “However, it’s not just the money that matters. Operating an aircraft should be as safe as possible, and such providers are here to ensure just that,” concludes the CEO of KlasJet.