Left: Shawn Vick, chief executive of Global Jet Capital
The lowest level of commitment is a basic
one trip charter, but you can also buy into block charter programmes and jet cards, which represent a larger commitment by contracting for a certain number of hours during the year. Next is fractional ownership, which involves both the acquisition of the fraction and hourly cost while onboard the airplane, as well as a monthly management cost. Finally, you have whole aircraft ownership. With respect to financing whole aircraft
ownership, while the structure of each agreement can have significant complexity and uniqueness it is fair to say clients are either using their own capital, entering into a debt or loan structure, or entering into an operating lease—which seems to be gaining in popularity.
What are some of the common misconceptions about business aviation that you help clients clarify? One of the most common misconceptions is that the expense associated with business aviation is impractical. In fact, if you have a constrained schedule with a multi-city agenda, in a short time the economies of scale kick in and it can be a very economical solution. What could take you weeks on commercial airlines can take days on your own plane.
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What are the key things for families to think about when considering financing an aircraft? What are the pitfalls? Each one of these transactions is unique and discrete in and of itself, and clients need to know their specific needs are being understood and addressed. But against that backdrop are some basic concepts related to tying up capital in a depreciating aircraft or asset, residual value risk, and the potential complexity associated with ultimately disposing of the asset. It has been our experience that if careful consideration is given to each of these elements there is a successful outcome.
What is your most valuable advice to a family that wants to buy or finance an aircraft? Relying on someone—colleague, friend, or family member—with a passing interest or experience with business aviation can lead to a challenging experience. Find an accredited, high-integrity, experienced adviser, and perform your due diligence. Be sure you are being heard and understood. Business aircraft are unique productivity and time-saving tools, the right guidance up front can ensure you take full advantage and enjoy a quality experience.
Global Jet Capital
Corporate offices: 83 Wooster Heights, Suite 503, Danbury, CT 06810
United States
2500 North Military Trail,
Suite 475 Boca Raton, FL 33431
United States
+001 844 436 8200 info@globaljet
capital.com
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