IF YOU ARE CONSIDERING AN AIRCRAFT
PURCHASE, LET US DISCUSS IT WITH YOU
- Perhaps it will turn out that the aircraft under consideration will not cost what you thought it would cost.
- Perhaps an aircraft that you have already excluded will not really cost as much as you had feared it would.
- Perhaps a number of minor factors have not been taken into account and their aggregate impact is anything but minor.
- There are a number of different ways to finance a corporate jet. There must be fifty ways to get it wrong. It can be worth a great deal to find the correct solution and avoid expensive wrong turns.
- If nothing else, an hour or two of conversation now could save a lot of aggravation and unanticipated expense later.
What does an aircraft buyer really need to know?
Know your total cost of ownership
Buying a corporate aircraft can be a daunting task. There are a bewildering array of factors and details involved. You had probably never heard of most of them, when the process began. Some are technical and arcane. All of them have cost ramifications, but you may feel that no one can answer your questions about aggregate total costs or the impact of one cost upon another.
To make things even more complicated, the situation really is different now. There have never been as many used aircraft as there are now. Used aircraft sales outnumber new aircraft sales. For about $2 million, you can have a brand new Cirrus Vision Jet. That same amount will buy a used Gulfstream IV that has a good 10 years of service life remaining. There have never been as many people flying private as there are now. The business aviation industry has changed structurally. Costs and assumptions about future costs are in flux.
We deal exclusively with cost considerations and financial issues. You have probably discussed many of the technical details with your broker and some of the vendors that you are considering. Can anyone tell you what the aircraft you are considering and its operation will cost you per year, all things considered? Can any of them advise you on the comparative, all-up costs of several different aircraft types or tail numbers that you might be considering?
Our model is intended to do exactly that. Interest expenses and parking fees are just individual line items. You are interested in the aggregate, combined grand total – the dollar amount of the checks that you must write. To comparison shop, you must be able to compare the total cost of ownership of the various aircraft under consideration, just as you would compare their surveys and maintenance logbooks.
Use the right financial instrument
Most lenders offer only one or two financial instruments to a narrowly defined range of borrowers or lessees. The only way to have a wide range of financial instruments available to a wide range of aircraft buyers
- corporate or individual
- if corporate, public or private ownership
- large or small firm
- investment grade credit rating or not
is for an independent third party to maintain a large, diverse and up to date network of contacts that can originate loans or leases of various types.
Find the right resources
In order to make an important decision in your normal field of business, what data do you need to have at your fingertips? Can you make comparably well informed decisions about aircraft purchases and aircraft finance, given the resources that you have been able to assemble for yourself? Do the technical personnel that you have met have the financial background that you expect from your business lenders?