PAlife PRIVATE AVIATION
THE CHARTER COMPANY
VICTOR
is the negative impact on company cashflow to consider.” Victor’s Jackson agrees: “Times have changed and nowadays no one wants to pay in advance for a service they might not use – if they don’t use it they will lose the money they’ve paid.” At Air Partner, Wheatley concurs: “There is an underlying move away from fractional ownership programmes, as people continue to be disillusioned with the lack of flexibility and onerous fixed-term contracts. If you join a fractional programme you are buying part of that jet; if the market falls, therefore, so does the value of the asset. The question buyers are asking themselves is this: if I want access to a private jet, a depreciating asset in this market, why should I buy it when I can rent it?” The Charter Company’s Wilkinson
suggests, however, that it is contingent on the needs of the individual client – for instance there may be tax benefits in purchasing an aircraft in this fashion based on the company’s financial profile. “Whether this option is more cost-effective than ad hoc charter rates will depend entirely on the type of trips you undertake,” she says. “For example, should a client require a high number of one-way trips, a fractional ownership programme may be more cost-effective as you only get charged for the ‘live legs’ that you fly. ”She proffers a possible solution. “Some clients may benefit financially from owning both a fractional share and using a good broker to source cheaper [charter] rates for certain trips to give them the best of both worlds.”
TO BUY OR NOT TO BUY But if your company executives are constantly
flying all over the world, might it be time to splurge and invest in buying a company jet outright? PrivateFly’s Twidell says it’s really only a practical option for very high frequency users. “The hassles and costs involved make
COME FLY WITH ME TOP FIVE TIPS FOR
CHARTERING APRIVATE JET 1
Use a company that is reputable and reliable. They should have a
proven track record and must take contractual responsibility for the success of your flights.
2 Look for clear and competitive
pricing. De-icing charges are commonly charged extra (and occasionally
catering and inflight phone charges too) but everything else should be included in the price.
3
Use a specialist broker experienced in the type of product you need. All
brokers should tell you that they only use legal charter solutions, but look for additional service guarantees.
4 Use a broker who can provide 24/7
worldwide support. It is important to choose a broker that can meet the demands of your passengers wherever they may be in the world.
5
Make sure you are given a dedicated account manager.
Regardless of the size of the broker you deal with, you should expect a one-to-one, personal service.
With thanks to Simon Wheatley, UK Manager of Private Jets at Air Partner
this a less popular choice, even with larger corporates. The annual fixed costs of owning a private jet make it a prohibitive choice for most businesses. And, much like a used car, private jets are also subject to ferocious depreciation, so they are not considered a financial asset.” At Air Partner, Wheatley, too, believes the
trend is towards chartering, explaining that “large corporations that previously purchased a whole aircraft are buying blocks of jet time instead, to limit their exposure to future market dynamics and ensure a better return on investment.” “With the chartering option you are leasing the specific aircraft relevant to the trip, whereas if you buy an aircraft it may only be suitable for some of the flights you take,” notes ACC Aviation’s Hogben. The Charter Company’s Wilkinson sounds
a note of dissent, noting that buying a plane could be a viable choice for some. “At present there are globally more than 2,500 pre-owned jet aircraft available for purchase. With a market this flooded with available aircraft, purchase prices are very competitive and could be a feasible financial consideration for passengers who fly in excess of 200 hours a year,” she comments. She adds a note of caution. “You have to
take into account the initial cost of the aircraft, the type of flights you wish to undertake, the destination airports you visit and whether your chosen aircraft can land there. In addition, you need to think whether your charter requirements will remain consistent. For example, will an eight-seat aircraft always fulfil your requirements, or would you sometimes need a larger 12-seater? “The number of charter hours you fly in a
year will influence your financial decision, but so many more factors need to be considered when weighing up an aircraft purchase versus the various charter options,” she concludes.
PALIFE.CO.UK
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MARCH 2013 • PALife
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