When businesses look into the possibility of using private aircraft, there several different options that are available, the most common being ownership of private aircraft outright, operating lease, fractional ownership or jet chartering. While each of these options has a number of advantages and disadvantages, for businesses who require maximum flexibility when it comes to having aircraft accessible at the lowest cost overall, there’s generally one option that fits best. The overarching question will always remain “what is your purpose or mission when it comes to your aircraft?” Once that question is answered, the best option for your business can become quite clear.
We have all heard that flying privately is a luxurious way to travel, but the question remains, is it really worth it? Is it worth the money to buy or lease a private aircraft? Is it worth the time to oversee the transaction? Is it really everything that it has been made out to be?
When businesses are looking to acquire their own air transport, used private aircraft for sale are often a second choice for no good reason. Businesses and executives can find high volume, pre-owned private jets available for sale that not only provide substantial cost savings, but have the service and support they need that rivals a new aircraft manufacturer’s warranty support. For those looking to reduce their costs without having to sacrifice an advantageous mode of transport, buying pre-owned is sometimes the best option. Let’s consider the advantages of pre-owned versus a new aircraft.
Access to a business aircraft is a sure sign of a well-run, forward-thinking business. However, like any investment, acquiring a private jet merits careful evaluation. Planes start depreciating in value the minute they’re purchased, making your financing decision among the biggest choices you’ll make for your business.
Corporate jets used to be only for the Fortune 500 companies of the world. That’s not so any longer. There has, as of late, been an explosion in the growth of corporate aircraft leasing, to increasingly different types of business clients. More companies are coming to the conclusion that they stand to benefit greatly from leasing a private aircraft. The financial sector is keeping up with the increased demand for business aircraft financing by adding different leasing and financing options, which in turn is making the reality of having the use of, and benefit of, a private business jet a real possibility for a larger segment of the business world.
Trends in business travel evolve to reflect the changing pulse of the business world itself. Mobile apps now enable travelers to make hotel reservations or check in with a few simple strokes on a touch screen. Rideshare services provide individuals with another way to get from Point A to Point B in an ever-growing number of places. Alternative forms of payment (such as platforms like Paypal) make payment of products and services rendered more convenient than ever. “Smart” hotels offer technology that anticipates and caters to the needs of business travelers from across the globe.
This year's NBAA welcomed industry professionals from all over the world. The show brought together 27,000 participants in Orlando for one of the most important events in business aviation. With numerous press events, two static diplays and an indoor exhibit with over 1,100 exhibitors, NBAA 2016 displayed the size and depth of the private aviation industry.
The Global Jet Capital team had the pleasure of meeting with fellow attendees, manufacturers and prospective business aircraft buyers. Below are pictures from Global Jet Capital's NBAA 2016 indoor booth.
There is a common misperception in the business jet industry that high net worth individuals and corporations mostly pay in cash for large private aircraft. Even if the cash resources are at hand, more often than not the preferred approach is to lease or finance assets of this nature. Why? If a new or pre-owned aircraft is acquired for cash – costing tens of millions of dollars – that’s a lot of capital tied up in an asset that typically depreciates each and every year (unlike real estate, which may go up in value over time). As such, many private aircraft users prefer to take advantage of available third-party capital to finance or lease their acquisition.
Funding the acquisition of a new or pre-owned jet with cash is 100-percent equity financing – equity capital that the individual or corporation could use to make other investments. Many conclude that the investment in their business is probably a better bet than buying into an asset that will likely lost value each year. The decision that many private jet operators reach is that it’s most efficient to use third-party capital to fully or partially fund the acquisition of the private aircraft they wish to use.
Global Jet Capital, a provider of financing solutions for new and pre-owned mid to heavy private jets, has become a member of the German Business Aviation Association (GBAA).
Founded in 1985, the GBAA is a member of the European Business Aviation Association and works to promote the economic, political and legal aspects of the business aviation in Germany.
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