For most, private aircraft are simply beyond reach, a luxury that can only be reserved for those of seemingly unmeasurable means. Additionally, with environmental concerns over business aviation growing even stronger, the practice of outright buying a private jet is increasingly becoming more and more arcane. The steps involved in buying a business jet are not as simple as one may expect, and the market itself can be challenging to understand.
Furthermore, regulations and reporting requirements regarding private jet purchases vary significantly by country, making it even more difficult to make such an acquisition. Therefore, one must be sure to read up on the process, identify which aircraft they want, and perform various other preparations before taking off in their own private jets. Due to this unnecessarily complex process, there is a reason many turn to chartering private jets on a short-term basis or use a jet-card on-demand service like NetJets.
In this article, however, we’ll attempt to demystify the complex buying process for business jets. Whatever kind of plane you aim to purchase, the buying process follows a few key steps. Incorrectly following this process can prove risky and may ultimately involve spending unnecessary money and delaying their ability to travel as they please. Furthermore, selling back an aircraft you do not want can prove timely and inefficient.
1 Identify your aircraft needs
Before one embarks on the process of actually acquiring a private jet, it is critical that one first identify the specific requirements they have for an aircraft. If one doesn’t do this, they can quickly get trapped into purchasing an aircraft that exceeds their needs. For example, if one isn’t going to travel that frequently, it might be significantly more cost-effective to skip this entire process and use a jet subscription service, as mentioned above. However, if one is sure they’d like to acquire their own jet, there are a few different factors for one to consider before making a purchase.
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Among the first things to consider when determining which kind of private jet to purchase is an aircraft’s operational range. Some private jets, such as the Phenom 300, can roughly cover the distance from New York to Miami. For a business executive from the New York Area making frequent trips to a vacation home down south, this jet might be an ideal option. However, for one who requires regular long-haul travel, a Bombardier Global 8000, which is set to enter the market within the next couple of years and is so aptly named due to its marketed 8000 nautical mile range, might prove a far better choice. Buyers should also consider an aircraft’s age, capacity, operating costs, and other specifications.
2 Decide on your budget
Secondly, one must decide how much they are willing to spend on an aircraft before going forward with a purchase. This will likely determine how, when, and where the purchase should best take place. For example, used aircraft are often far more affordable than brand-new ones from the manufacturer for obvious reasons.
A Bombardier Global 5000, a long-range private jet offered by the Canadian manufacturer, costs $50.4 million if purchased new; however, used models can often cost as little as $14 million depending on aircraft condition, flight cycles, and model year. Therefore, if one identified their budget as only $20 million, it is best that they look to make a purchase on the secondary market.
3 Determine financial specifications
After assessing the budget for a private jet purchase, one must also determine how specifically they are going to pay for the aircraft. If one is going to pay in cash, that is obviously relatively easy, as little preparation is required before making a purchase.
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However, if one intends on using loan funding or a line of credit to make an aircraft purchase, they need to make sure they are approved by the appropriate lender and have adequately mapped out their payment plan. In today’s era of high interest rates, paying attention to the specific details of any loan under consideration is essential.
4 Make an offer
Making an offer is likely the most exciting part of the process and the one that involves the most strategic calculation. When one is purchasing a new aircraft directly from a manufacturer, they are likely to have relatively limited negotiating power.
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However, if an individual is purchasing a used aircraft, the price is far more negotiable as the previous owner will determine what price to accept. Therefore, making an offer underneath the asking price would certainly be advised. Nevertheless, if another buyer offers significantly more for the jet, one could unfortunately lose out on the opportunity to purchase the desired aircraft.
5 Take delivery
Finally, after completing all of the above, agreeing on a purchase price, and signing the appropriate documents, one can finally go forward and take delivery of their newly purchased aircraft. If one is to purchase directly from a manufacturer, then the standard delivery method will likely be followed, and the aircraft will probably be flown right to the customer’s airport of choice, precisely as is done with commercial airline clients.
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However, delivery logistics are far less clear-cut when purchasing a private jet on the second-hand market. While many sellers will choose to deliver the aircraft, some do not offer such a service. In this instance, the buyer must coordinate delivery logistics, which could involve flying pilots to fetch the aircraft. Additionally, if one is purchasing a used aircraft that requires maintenance before flight due to the jet’s condition, the customer would similarly be responsible for handling these logistics.