DETERMINING THE RIGHT JET FOR YOU
BUDGET: understanding how much you can and want to spend on your jet is a vital metric in selecting an aircraft and should be looked at with care and consideration. Selecting an aircraft that is right for your budget involves more than just looking at the purchase price. Operating costs can often represent a larger financial commitment over the life of the aircraft than the purchase price. A purchase is a one-time event and can be financed, whereas operating costs are ongoing and impossible to finance. Make sure the aircraft you select will be a suitable asset for you throughout the ownership cycle, and not just at the point of purchase.
Starting Point: Budgeting is more than just the asking price, and the yearly operating costs need to be factored into your decision-making process. Determine how much you can budget per year and look at the options that fit that plan.
CABIN SIZE: The size of your cabin comes down to personal comfort levels and what makes sense for your needs. Many clients tend to begin their search by looking at the biggest jet with the highest passenger capacity. But upon further introspection, they realize most of their flights usually only have two or three passengers on board. Cabin size and operating cost are directly related – the larger the cabin, the larger the operating cost. Assess how often you need the larger space and if it is worth the extra costs incurred when only a few people are on board.
The cabin layout must also be a consideration. For example, a certain cabin height, the dining group with a table, or a divan for sleeping may be important to you due to the nature of the trips you take.
Starting Point: Examine your typical flight and how many passengers you usually fly with and how you use the jet. Your aircraft model selection is very personal and you need to determine your priorities in cabin size that fit into your predetermined budget.
BEFORE YOU BUY
Chartering an aircraft type is the best way to determine the aircraft model you will be most happy with. It is the number one thing we recommend to anyone considering purchasing an aircraft. Once you have narrowed down your list of possible options, charter each one and see how you feel about them in operation
• Bring other passengers on board to get a feel of how you can move around in the cabin or how full it feels with a certain amount of people and baggage on board.
• Use the galley and see if you like the space and amenities it offers.
• See how certain features function such as the lavatory, the media system, and the window shades.
• Go up to altitude for a few hours and see what it feels like.
• Determine how loud it is in the cabin during take-off and at cruise.
• If you take overnight flights, see how people can sleep in the berthing configuration. This mainly relates to the larger cabin aircraft, as often each model has its own unique configuration.
NEW VS PRE-OWNED
A key question to consider is whether you will buy a new or pre-owned jet. One of the biggest reasons for the popularity of the pre-owned market compared to new aircraft is the price difference. Depreciation has been a constant feature of aircraft since the financial crisis in 2008 until late 2020, and a pre-owned aircraft typically offers significant savings on the purchase price of a new jet.
The proposition of similar utility for a lower purchase price has driven the pre-owned market’s popularity. When you consider that many pre-owned models provide similar functionality to new models currently in production (i.e.: pre-owned Citation XLS compared to a new Citation XLS+ or a pre-owned Global XRS compared to a new Global 6500), the value proposition of pre-owned jets becomes significantly greater than a new aircraft.
As of January 2022, rapid appreciation of values on pre-owned jets is occurring across almost every market segment. This phenomenon has not occurred in 15 years and no one knows how long it will continue. While this appreciation has made a small number of very young pre-owned aircraft trade at premiums over factory price, most pre-owned jets still provide a strong value proposition compared to a new aircraft.
Another difference between a new and pre-owned jet is the purchase cycle. Aircraft manufacturers will normally have pre-sold several months and sometimes years of their annual production quotas and as a result, buying a new aircraft usually entails waiting prolonged periods for it to be built and delivered. As of January 2022, most manufacturers are sold out for 2+ years and any order placed would mean delivery in 2024 at the earliest. In comparison, pre-owned aircraft have a shorter purchase cycle taking several weeks once the right aircraft has been identified.
Source: Colibri Aircraft
Colibri Aircraft provides aircraft brokerage and asset advisory services to buyers, sellers, and aircraft owners. The company’s focus is on remarketing and purchasing aircraft for clients, as well as advising lenders on asset value protection and repossessions. www.colibriaircraft.com