Offsetting Your Aircraft Costs
Congratulations! You have just bought your first aircraft. You now are the proud owner of a Cessna Citation Excel… What do you do now? Where am I going to find pilots? Where am I going to get maintenance completed?
These are just the first of many questions, and these are questions that should have been answered way before you even found a specific aircraft. In today’s market, there is nothing more important than to draft your team in the beginning so you can breathe easy on the back side of the purchase. In most situations, when you have not drafted your team and you purchase an aircraft, the buyer panics and just goes with what they think is a good deal since time is of the essence. They want to get the airplane up and running, flying, and completing the mission that they purchased it for. About a month down the road, some intensive maintenance comes, and they find out that the purchase price is no longer the largest purchase they would have to make when owning and operating an aircraft. The common misconception in this industry is that after the purchase of the aircraft, it is just smooth sailing from there, but what do you do when your maintenance costs and costs of operating the aircraft become more than you are comfortable with?
This is where a trustworthy charter company comes in. Charters offer a great way to offset your costs on the aircraft. Finding the right charter outfit for you is crucial, and below you will see some great features to look out for when interviewing an operation.
- Maintenance– The largest cost you are going to have operating an aircraft is undoubtedly going to be your maintenance costs. The advantage of being with a charter company that has their own maintenance staff and program, this can save you thousands of dollars. When your aircraft is brought on to their certificate, they pre-plan large inspections of the aircraft, overhauls, hot sections, etc. The large scheduled maintenance is shown to you when they are going to be coming due, and they can also budget for you and let you know the costs behind these events before they even happen. Unscheduled maintenance is always an annoyance, but instead of having to keep your aircraft on the ground to wait and get into a large maintenance organization for them to over charge you by thousands, your charter partner can, in most cases, get you up and running in the next 24 hours depending on parts availability and labor.
- What Type of Contract– You will find that charter companies do either what is called a “Split” of the revenue, or they do a “Lease” for your aircraft. Both options are normal options among charter companies, the difference is in how much you pay to operate the aircraft can be very different while it is within their fleet. With a split of the revenue, you as an owner are going to be shown a list of the fixed and variable costs of operating the aircraft on their fleet. You will pay for catering, pilot salaries, fuel, supplies, etc., and you will get a split of that revenue generated form your aircraft. Granted, it may look like a larger amount than a standard leasing program, but you do have a financial burden to help operate the aircraft even when you are not on it. With a lease program, the charter company will hold the burden of paying pilots, fuel, airport fees, and all other costs of operating the aircraft while it is on charter. Some will even help add additional pilots and pay for training if the aircraft is performing well and owners want more hours (Hint, Hint) The lease rate will tend to be lower than a split, but the best tradeoff is that you are not having to fund the entire operation.
- The management– When looking for an aircraft management service, you want to be able to interview and discuss real concerns. The world of aviation is generally more expensive and unregulated than people think, and you do not want to be blindsided by unforeseen costs. A trustworthy management service will have all of the costs associated laid out in front of you and there should be no surprises. The management of your asset should be treated with the utmost attention and respect. Constantly looking at ways of saving you money and saving you in operational costs should be at the forefront of their minds on a daily basis. Meanwhile, the relationship between you and the management should have constant communication and even when something does break and will be expensive to replace, that should never be hidden, it should be up front and honest.
In closing, these three topics should be the most important deciding factors among aircraft owners when trying to decide whether or not they want to move forward with a company. If you are looking to have a trustworthy management and maintenance team, Priority Jet is here to help you save money and to keep your aircraft flying.