It goes without saying that, like home ownership, buying a private jet is a substantial investment. In addition to the initial price tag, the ongoing costs of owning a private jet includes required maintenance and scheduled inspections. Without these, the jet will not retain its airworthiness. These costs do not include other required expenditures like jet fuel, hangar space, staffing, and so forth. However, there is a well-known way to recoup some of the expenses associated with owning an aircraft: chartering your jet through an aircraft management company. Should you decide to take advantage of this revenue source — and there are very few reasons not to — here are some considerations to think about.
The main reason to charter your plane is to offset maintenance and operating expenses. Chartering is a service offered to owners by some management companies, like Keystone Aviation. In addition to managing and maintaining private jets, Keystone is an FAR Part 135 certified air carrier, which means it can charter your aircraft legally and safely, subsidizing a substantial part of your aircraft cost with charter revenue.
While chartering will not likely generate a profit, it offers a great way to provide substantial income toward expenses. How much chartering can financially benefit an owner is variable, based on factors such as the terms worked out with the aircraft management company as well as how often an owner decides to charter his jet. These situational factors aside, chartering can provide a savings of up to 80% of the ownership costs. Savings can be hard to calculate, but a reputable aircraft management company will be transparent about how much chartering a private jet would offset operating costs.
The financial boon to deciding to charter your jet is unmistakable, but there are some minor drawbacks to consider. For instance, owners must relinquish some control over their aircraft because it will not always be available to them. However, they can work with the management company to decide how often they want to make the aircraft available for charter.
Another major benefit to working with a management company like Keystone is that you receive fleet-wide discounts if you need to utilize another aircraft when yours is being chartered. So, not having access to your aircraft does not mean that you are stranded.
Deciding to charter one’s private jet is good financial sense with very few downsides. Charter services add a healthy revenue stream to offset operating costs, and the more time an aircraft is made available by an owner, the more lucrative of an option it is.
Owners considering chartering their jet for revenue-generating flights should ask themselves how flexible their flying routine is. Someone who wants to be able to fly at a moment’s notice might be reluctant to choose to charter their jet. But in this case, a good management company can work with clients regarding availability if they choose to charter their jet. Also, for those spur-of-the-moment trips, companies like Keystone that run their own fleets can likely provide a replacement when an owner’s aircraft is being chartered or is grounded for maintenance or other reasons.
Deciding whether or not to charter a private jet is a no-brainer. The question for owners shouldn’t be, is it worth it to charter my jet? Instead, it should be, how can I maximize charter revenue?
Here are a few tips for getting the biggest bang for your buck when chartering your aircraft:
Hire the right advisors. Not all aircraft management companies are created equal. Ask for details on how aggressively the company would market your aircraft to its clients.
Give the management company you’re working with advanced notice of your schedule every month. That way, the company can readily make the aircraft available for charter.
If possible, plan to use your private jet during non-peak periods. Flexibility in your schedule will allow you to make the aircraft available when it is most coveted by charter customers — during peak periods, such as holidays.
How you decide to charter out your private jet is a personal decision as well as a financial one. Working with consultants at an aircraft management company like Keystone can help inform that decision. Reach out to us, and let us figure it out together.