Private flights are the most flexible and pleasant way to travel. While you may be familiar with private air charter, buying a private jet may better suit your requirements in the long term if you travel often and have the means. Read our guide on how to buy a private jet.
How To Buy A Private Jet
Wouldn’t you love to own a luxury private jet? Without doubt it is the most versatile and comfortable way to travel. We take a look at what goes into buying a private jet, including how to shop for an aircraft that suits your budget and requirements, and how to make sure you’ve considered all your options.
Is it the right time to purchase a plane?
If you haven’t yet made up your mind whether to purchase a private plane, you can start to explore the possibility by carrying out a cost-to-benefit analysis. The rule of thumb is that if you or your executives spend 350 to 400 hours on commercial or private charter flights each year, then the expense of fully owning a private jet is probably worth it.
Part of this analysis is to get a general idea of the type of aircraft that would best suit your needs and your pocket. This will not only give you a ballpark figure of the initial outlay involved in buying an aircraft, but you’ll also begin to understand what it will cost to run your private plane. This is one of the main differences between renting an aircraft and buying.
As an owner, you will be responsible for the running costs of the plane, which include fuel, repairs and maintenance, insurance, airport taxes and landing fees, catering and flight personnel, along with the cost of layovers and stay-overs. You’ll also need to build a financial buffer into your costs, because these expenses can vary significantly from time to time with little or no warning.
If you don’t have a flight department to oversee the management of your jet aircraft, you’ll want to hire an aircraft management company. It will take care of pretty much everything to do with running your jet, from maintenance repairs to the hiring of pilots (unless you have a licence and plan to fly your own plane) and onboard catering. This can cost as much as R3.5 million ($250,000) a year.
How much does a private jet cost?
You’re probably not looking for the most expensive aircraft in the world – an Airbus a380, owned and modified by Saudi Prince Alwaleed bin Talal al-Saud, which carries a hefty price tag of $500 million (R6.9 billion). At the other end of the spectrum, the Eclipse 400 is one of the cheapest jets on the market. It accommodates three passengers and a pilot, has a range of 2,325km and sells for around $1.2 million (R16.6 million).
In between cheap and expensive is the bestselling Cessna Citation XLS, at $14 million (R193.8 million). Right up there with the most popular private planes in the world, the XLS carries eight passengers in comfort. It has a respectable range of 3,890km and 90 cubic feet of luggage storage space. If you’d like to read more about costs, take a look at our blog on how much a private jet costs.
A handy tool to have on your desktop as you begin your journey towards private aircraft ownership is an online aircraft cost calculator. This will give you a good idea of what the jet of your dreams will cost you, including running-cost details based on actual use, as well as how financing, capital-cost considerations, and residual value are likely to affect your operating expenses.
Where to buy an aircraft
If you’re set on buying a private jet on your own, then you can start your search here. In partnership with Jet Advisors, Air Charter Service’s Aircraft Sales Division offers 100 years of industry experience, with hundreds of private jet transactions under its proverbial belt. Throughout your purchasing process, the team there will manage the entire transaction. We’ll keep your best interests in mind, and ensure you’re being catered for every step of the way.
No matter where you’re based, we research on a global rather than regional basis so that you have every option available to you. Along with managing any export processes worldwide, we also coordinate the delivery of your aircraft, while our wide network of partnerships ensures we can assist with operations, legal representation, financing, crew staffing, tax planning and interior completion (with branded livery, if you so desire) or aircraft management. Whether you’re looking to invest in your first aircraft or upgrade, we have the expertise to help when it comes to purchasing a private plane.
What to look out for when buying a plane
Now it’s time to get to grips with the specific aircraft you’re interested in. You’ve done your homework, at least in theory – but to avoid ending up with a lemon, you’ll need to employ the services of an inspector with an impeccable reputation for thoroughness. Here’s what to look out for.
Know your plane!
This goes far beyond specs, performance, cabin width and seat finishes. In some ways, the research process is similar to buying a motor vehicle: you’d want to avoid something that belonged to a car rental company and stood out in the sun in hotel car parks (similar to a plane that’s done hard time and stood out in the hot, salty air). You’d want to look for something that’s been pre-owned by a little old lady who’s driven carefully and had it cleaned each week, even though it’s slept in the garage (the equivalent is a jet that’s been the pride and joy of a corporate executive). You’ll find out everything you need to know about the state of ownership of any potential purchase by going through the jet’s logs, including the amount of time it has spent in the air, how far it has travelled and how many owners it has had.
Know your plane’s cycles
It’s important to find out which maintenance cycle an aircraft is in. If you’re used to flying by air charter, this is probably something you’ve never thought about. Maintenance expenses, particularly the large ones, are usually incurred based on calendar and usage. This is typically the reason why two aircraft that are the same model vary (at times substantially) in price. You wouldn’t want to spend R55 million on your jet, only to find that it’s due for maintenance amounting to R3.5 million ($250,000) two months after purchase!
Insist on a pre-purchase evaluation
Make sure a pre-purchase evaluation is carried out on the aircraft you’re thinking of buying. The only way to know for sure if a plane is in good flying condition and worth the asking price is to have it inspected from top to bottom and tail to tip. This includes a close study of all the flight logs and paperwork, as well as the engine programmes and/or logs. It’s not only about catching those big-ticket maintenance discrepancies that could save you millions post-purchase; it’s more importantly about your safety when you and your guests fly, and that of your staff and crew. When you use Air Charter Service’s Aircraft Sales Division to acquire your aircraft, our experts will be able to specify exactly what will be looked at in the pre-purchase evaluation, and to what standard.
Take a test flight
Yes, it’s worth getting a feel for a plane before buying. Of course, this might cost you more than a tank of fuel, but it’s worth it. If you’re thinking about buying your own private jet, you’ve probably spent a fair number of hours inside commercial planes or private charter planes– so you’ll know what you like about a cabin and what you don’t. If you’re buying new, most manufacturers will provide demos around the airport area to qualified buyers.
Buying versus leasing a private plane
If the hours you spend in the air justify use of a private aircraft, but the numbers just don’t add up, you could always consider leasing as a more affordable alternative. You’d be in good company – more than 33% of commercial airlines lease at least one-third of their operational aircraft. This allows you to get all the benefits of owning an aircraft without the long-term financial commitment. Leasing is also a great way for first-time buyers to try out private ownership without being locked into a hefty financial decision.
Leasing allows you two options. The first is called dry-leasing – which means you lease the aircraft but without pilots, cabin crew, or being responsible for maintenance or insurance. Dry-leasing is typically used by lessees who will need a jet for a longer period. The other option is wet-leasing. This includes the pilot, cabin crew, and all of the above, but is usually for a shorter time frame.
Whether opting for dry- or wet-leasing, it’s far less expensive than purchasing a plane outright. In fact, aircraft rental is an attractive proposition for a business owner who needs the speed, convenience and flexibility of private air travel, while still enjoying greater liquidity in the long term.
We understand the hassle associated with owning an aircraft, but equally understand the cost involved if you fly regularly. As leading aircraft charter experts, at Air Charter Service (ACS), we offer bespoke private jet leasing solutions, which allows you the flexibility of having an aircraft 24/7 without the challenges and added expense of ownership.
Making use of private aircraft sales brokers
Using the services of an aviation broker or consultant is highly recommended. Both charge a fee of course, but if you’ve chosen a reputable broker, it will expertly manage the purchase of your jet and give advice about the ongoing operation of the plane. Fees charged by aviation brokers are usually between 2% and 5% of the purchase price. A growing trend is paying a broker a set fee for an Acquisition Agreement, with most experts saying it’s best to agree to a set fee before proceeding with a plane acquisition.
Used versus new private aircraft
When you order a brand-new jet from a manufacturer, you’re likely to have to wait a year or two before taking possession of your plane. New jets are also more expensive to buy than used, but on the flip side they generally have a five-year, tip-to-tail warranty. You also know exactly where your plane has been and what it’s been up to.
On the other hand, there’s a whole range of used aircraft on the market today – which means you have a wider choice of size and model, and more negotiating power when it comes to price.
The private jet habits of the rich and famous
Knight Frank’s Wealth Report 2021 reports that the total number of ultra high-net-worth individuals (UHNWI) in the world grew by 2.4% in 2020, with growth of 12% and 10% respectively in Asia and Australasia. The annual increase in the number of UHNWI in Africa between 2019 and 2020 was 5%. An earlier report predicts that the number of UHNWI (those with a net value of more than $50 million or R689 million) will grow 43% between 2017 and 2022, while the number of demi-billionaires (those with a net value of more than $500 million) will increase by 39% in that same period. Of course, since this report was made before 2020, the unanticipated impact of the global pandemic hasn’t been taken into account and these figures might differ significantly in reality. As the number of ultra-wealthy and demi-billionaires increases, the market for private jets and jet charter is expected to grow, too.
Those who change their personal fortunes enough to own an aeroplane will join the ranks of rich and famous high-flyers that include: John Travolta, who flies three private jets – a Gulfstream jet, Learjet, and Boeing 707-138; Oprah Winfrey (Bombardier Global Express XRS), Donald Trump (Boeing 727-23); Tom Cruise (Gulfstream IV); Jackie Chan (Embraer Legacy 650); Jay-Z (Bombardier Challenger 850 Learjet); Bill Gates (Bombardier BD-700 Global Express) and Dwayne “The Rock” Johnson (Gulfstream G650).
Accessing financing for a plane
Most major banks in South Africa offer financing for both new and pre-owned aircraft and helicopters for commercial airlines, leasing companies, private flight operators and individuals. Teams of experts typically design pricing and financing structures based on an individual client’s risk profile and requirements, while taking the purchasing, maintenance and operational costs of the specific aircraft into account to ensure all bases have been covered.
Loans from foreign banks are also an option for financing the purchase of aircraft in South Africa. Loans are typically secured by a mortgage registered with the South African Civil Aviation Authority (SACAA) and/or the International Registry under the Convention on International Interests in Mobile Equipment (Cape Town Convention).
Another popular option is leasing. This usually involves a lessor buying an aircraft through a combination of loan and equity financing, then leasing it to an aviation operator. Typically, the parties decide whether ownership will pass automatically to the operator after the final payment has been made.
Buying a plane – but not to fly it
Yes, really! Building with planes is one of the coolest architectural trends out there. Complete aircraft, or their parts, are being used as homes, office spaces and even libraries. If you’re interested in living in a jet or using its parts to build something special, it seems some retired aeroplanes end up at Lanseria Airport boneyard, some 40km north of Johannesburg.
Aircraft ‘boneyards’ are where retired planes go to wait out the remainder of their days. Here you’ll be able to buy a jet whole or for spare parts. Aluminium fuselages are sold at a cheap price, so they make an excellent building material. If aircraft boneyards sound like something you’d like to know more about, read our blog on some of the most famous – and eerily beautiful – ones around the world.
It’s a form of building that’s been trending in the USA for years. Joanne Ussery of Mississippi bought a Boeing 727 instead of a house. She had limited funds and a need for space. Her plane-home cost a mere $2,000 (R27,550) for the jet’s hull, $4,000 (R55,000) to move it to her land by the water and $25,000 (R344,240) for refurbishments. She now has hot running water and electricity, three bedrooms, a living room, kitchen and laundry, and a master bathroom with Jacuzzi.
One of the best examples of buying a jet to live in (or under) can be found in the remote hills of Malibu in California. The innovative and environmentally friendly 747 Wing House, created by American architect David Hertz from a Boeing 747-100, is a unique home that has not only won numerous awards, but has become the poster child for aircraft repurposing.
There’s a ton of other innovative architectural designs that incorporate aeroplane parts – read more about it in our blog.
For more on aircraft ownership and private jet charter
If you’d like to find out more about how to buy a private jet, read our piece on the most affordable private jets available today for a look at advancements in the aviation industry that have helped to make the convenience, flexibility and cost of a private aircraft much more attractive. And if you decide that you’re not ready to buy just yet, there are easy ways to charter a private jet for specific trips. Or there’s fractional jet ownership and private jet card clubs, which offer you a range of benefits when you pay for an aircraft charter.