Tired of queing at the check-in desk? If you have several million dollars to spare you could buy your own jet. Al Shindagah found out more
The reality of commercial air travel means that taking a three hour flight can result in spending a further three hours queuing at the check-in desk, moving through departures and waiting to board an aircraft. In addition your travel schedule is dictated by the airline you choose to fly with. Reaching a destination unpopular with major airlines can add further complications, not least having to fly with carriers not known for their safety record or having to make a connecting flight at an inconvenient time. As an alternative you may have considered buying your own jet. Assuming you have $20 million to spare that is!
If you are like me, you will think the corporate jet exists to provide a fantastic venue for Hugh Heffner hosted Playboy parties or to use as Elvis did, transporting dinner from his favourite restaurant in Detroit to his home in Memphis.
But the corporate jet only being a preferred means of transport for legions of international playboys and hungry rock stars is not true, according to Dubai-based John Guizetti, director of GBF Aerospace and regional distributor of Cessna aircraft. "The cost of buying your own business jet means that the decision must be motivated by economics, not simply the desire to own an alternative form of luxury transport," said Guizetti. Cessna's top-of-the-range Citation X has a top speed of Mach 0.92 and comes in behind only the fully supersonic Concorde in the speed stakes. As it currently costs around US$17 million it is no wonder that most decisions to buy a corporate jet are based on financial calculations.
But Guizetti admits that the motivation is not simply financial. The convenience of owning your own method of fast, inter-continental travel is a big selling point. "Owning your own jet allows you to go where you want, when you want, as fast as you want and even plan your arrival down to the hour and minute that you like," said Guizetti. Many jets are capable of being in the air within one hour of its owner deciding to fly.
Modern technology also means that many modern jets carry equipment that allows them to be independent of the areas they are flying in. Doing business in developing markets can mean arriving at airports that do not have high standards of safety. Most modern business jets' equipment allows them to avoid relying on local airports. Mike Cappuccitti, Bombardier's regional vice president for the Middle East, Africa and Asia points to the fact that Bombardier's new jet, the Global Express, will have a higher safety certification than the Boeing 777.
But there is no denying that a private jet is the ultimate luxury item for the man who has everything. A private, build-to-order jet aircraft is constructed to detailed customer specifications in the same way a luxury car or yacht would be. It is possible to specify everything from the kind and colour of leather used for your seats to the shape of knobs that will adorn the cabinet containing your crystal glasses. And if you are really that wealthy, the millions don't matter.
However, with the high running costs of a corporate jet, (the average yearly fees could easily reach US$1 million, to cover pilots, fuel, hangars and servicing) and the often low use by its owner, how does a corporation, rather than an incredibly wealthy individual, justify purchasing a jet if they are going to base their decision on advice from accountants? "Many owners of corporate jets lease their aircraft out when they are not using them," said Guizetti. This leasing can help to balance out the high cost of ownership.
Through leasing the owner of a low-usage aircraft owner can justify ownership. Although an owner cannot expect to profit from leasing a single aircraft, allowing it to be used for charter when it is idle can greatly reduce the operating costs. In the US these leasing schemes have been a huge success. According to figures published in Aviation International News, of all the managed aircraft operated in the US, about 80 per cent are available for charter.
Although the running costs are high, the possibility of chartering your jet out, combined with the low depreciation value of a private aircraft and its low flight hours, compared to a commercial airliner, can make owning a jet a viable financial prospect. A corporate jet is unlikely to fly more than 400-500 hours per year, compared with the 2,000 hours a commercial jet will see. Most business jets lose less than ten per cent of their value over the first seven years of their life. If the jet's owner has fully utilised the aircraft during this time, he would have had seven years use of an extremely convenient business tool.
Bombardier Aerospace, the world's third largest aerospace manufacturer and producers of the Lear jet, operate business jet solutions in the form of the Flex Jet programme and the Alliance scheme. Flex Jet, which is a form of fractional ownership, requires a minimum of 8-16 aircraft to be successful. If a fractional scheme is to work, it requires a relatively large number of people combined with a fleet of aircraft big enough to cope with the flight demands of your customers. The geography of the US and its corporate environment means that there is a high demand for domestic travel in business jets. It is possible for one corporation to have many executives in offices thousands of kilometres apart, yet still within the same country. It is this geography that makes the US market for corporate jets unique and makes fractional ownership and leasing schemes a possibility.
Although the Middle East is a good location to base a business jet for private use, fractional ownership and leasing has not taken off as the demand for use of business jets is not high enough. The geography of this region, coupled with previously unsuccessful attempts by aerospace companies to launch partnership schemes in Europe and South Africa have prevented anyone from establishing a financially successful leasing operation. Many companies based in this region are private operations that are unlikely to have the need to transport high numbers of executives around different countries. This means that in the Middle East a business jet will likely have a sole owner, who, having invested up to US$40 million of his own personal money, is unlikely to want to share his jet with someone else. If an individual has invested such a high sum he will want his jet to be available on demand.
This does not mean partnership schemes may not be possible in the future. As trading barriers fall among Arab and GCC countries businessmen are expanding their companies throughout the whole the Middle East. Bombardier's Mike Cappuccitti recognises the great potential for growth in this region but it will be some time before fractional ownership of jets could work. "Our studies have shown that these schemes will not viable in this region for at least the next 5-10 years," said Cappuccitti.
In the UAE in particular, which is seeing a constant level of rapid economic growth, the current demand is for infrequent one-off charter trips in business jets. Behind Europe the main destinations for private jet charters are the CIS states and Africa. Many businessmen want the convenience of dictating their own flight schedule, but cannot afford the million dollar outlay and do not have the advance notice of travelling. So they charter, which can currently cost from US$2,500-US$6,000 per hour depending on the kind of aircraft you require. The cost of chartering a business jet can be relatively cheap, if a trip is well planned. Cessna's Citation X has a range of about 6,000 kilometres, which would get you from Dubai to Paris, while Bombardier's Global Express will fly you about 12,000 kilometres, from New York to Tokyo. In today's increasingly global environment businessman and often government leaders are demanding faster and more reliable modes of transport and many are using business jets to fulfil these needs.
So what are the main considerations when choosing which jet to buy? The main comparison is range against cost. The longer a jet is in the air the more the flight will cost. Although a slower jet may be cheaper to buy, a more expensive jet will be able to fly higher and faster. However, the faster you fly, the more fuel your jet will consume.
Jets consume most fuel during the climb-to-cruise period of the flight, just after take-off. If an aircraft can get to cruising altitude and speed quickly, the flight will be more efficient. Although all this may seem obvious, all these figures must be carefully assessed. The difference in price between a Citation X and a Global Express is over US$20 million. Not only do the difference in size and range of the two aircraft account for this price difference, but a company would also have to assess the frequency of flying and the number of people it has to transport.