Ownership 3.qxp_Finance 19/02/2019 10:11 Page 1
OWNERSHIP David Wyndham is co-owner & president of Conklin & de Decker, a JSSI Company, where his expertise in cost and performance analyses, fleet planning and life cycle costing are invaluable. He’s formerly an instructor pilot with the US Air Force. Contact him via david@conklindd.com
How Long Should You Keep Your Jet? When buying a business jet, it’s important to have an idea of how long you will own the aircraft. David Wyndham assesses not only why, but how you should build a plan…
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client was recently looking at how the cost of owning their first business jet compares to a jet card or block charter. Their expected annual utilization is 350 hours and they plan to operate between two continents, requiring a Large Jet. They ultimately chose not to purchase the aircraft. Why did they choose not to own an aircraft? In short, their expected utilization period only covered the next two-to-three years. After that the client expected to retire and fly substantially fewer hours. In this case, a very short-term of ownership, combined with the projected decline in the aircraft’s residual value, meant the total ownership costs favored a wellstructured jet card program over outright ownership. There is no ideal length of time to own a business aircraft, however. The ideal will differ from one prospective owner to the next. So what are the key considerations that a buyer should take into account when determining the length of ownership? 54 ❘ Vol 23 Issue 3 2019 ❘ AVBUYER MAGAZINE
Mission Changes
Changes in the primary mission will often dictate a change of aircraft to one that is a better fit. For example, one flight department suddenly needed to fly much longer trips following a merger. The existing aircraft lacked the necessary non-stop range, creating the need for a replacement aircraft. Likewise, if the need to carry a certain number of passengers changes then an equipment change could be required. Mission requirements could dictate a smaller aircraft or a larger one. For example, there's no need for a 12-passenger Long Range Jet if the primary mission changes to short hops with fewer passengers. When the mission changes, it's important to establish if these are for the short-term or will be more permanent. A short-term change in mission or hours to be flown might be wellserved by charter or a jet card. As a part of your acquisition process, you will need to see if any foreseeable mission changes are likely to occur, and if so, when and for how long.
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