Private Jet Travel: When Can Entrepreneurs Afford to Fly Private?

The World of Private Aviation

Private jet travel has long been associated with the ultra-wealthy and celebrities, but the reality is that it's becoming increasingly accessible to successful entrepreneurs and business owners. In this comprehensive guide, we'll explore the different options for private air travel, the costs involved, and when it might make sense for entrepreneurs to consider flying private.

Options for Flying Private

There are four main ways to fly private, each with varying levels of commitment and cost:

1. Ad Hoc Charter

This is the least committal way to fly private. It's similar to calling a taxi or using Uber - you book a flight when you need it, with no long-term commitment.

How it works:

• You contact a charter broker or operator when you need a flight
• They provide options and pricing based on your requirements
• You pay for each flight individually

Pros:

• No long-term commitment
• Flexibility to choose different aircraft for each trip
• Can be more cost-effective for infrequent flyers

Cons:

• Prices can be higher for last-minute bookings
• Less consistency in service and aircraft

2. Jet Cards / Memberships

Jet cards and memberships are like prepaid cards for private flights. You purchase a certain number of hours or deposit a set amount of money upfront.

How it works:

• Buy a card with a set number of hours or deposit amount (typically $75,000 - $500,000)
• Book flights through the provider, deducting from your balance
• Often comes with guaranteed pricing and availability

Pros:

• More predictable pricing than ad hoc charter
• Often includes guaranteed availability
• Can be more convenient for frequent flyers

Cons:

• Requires a larger upfront investment
• May have restrictions on peak travel days
• Less flexibility in aircraft choice

3. Fractional Ownership

Fractional ownership involves purchasing a share of an aircraft, typically 1/16th to 1/4 of a plane.

How it works:

• Purchase a share of a specific aircraft type
• Pay monthly management fees and hourly rates when you fly
• Guaranteed access to your aircraft type (or equivalent) with notice

Pros:

• More consistent experience and newer aircraft
• Potential tax benefits from depreciation
• Lower hourly rates compared to charter or jet cards

Cons:

• Significant upfront investment (often $600,000+)
• Ongoing monthly costs even if you don't fly
• Typically requires a 3-5 year commitment

4. Full Ownership

Owning your own aircraft is the most committed way to fly private.

How it works:

• Purchase an entire aircraft
• Hire crew and manage all aspects of operation (or contract a management company)
• Complete flexibility in use and customization

Pros:

• Maximum flexibility and control
• Potential for charter revenue when not in use
• Customization of aircraft to your exact specifications

Cons:

• Highest upfront and ongoing costs
• Responsibility for all maintenance, crew, and operational issues
• May be overkill unless flying 200+ hours per year

When Can Entrepreneurs Afford to Fly Private?

The question of when an entrepreneur can afford to fly private is not just about raw numbers, but also about the value of time and the nature of their business. However, based on informal surveys and industry experience, here are some general guidelines:

For Active Business Owners:

• Net Income: $2 million per year
• Net Worth: $20 million (including business value)

At this level, many entrepreneurs start considering regular private travel, often beginning with jet cards or frequent charter use.

For Those Who Have Sold Their Business:

• Liquid Net Worth: $20 million+

However, it's important to note that many entrepreneurs who have exited their businesses may not feel comfortable spending significant amounts on private travel unless they have a new venture or investment activity that can justify the expense.

For Full Aircraft Ownership:

• Net Income: $10-20 million per year
• Net Worth: $100-200 million

These figures are for individual ownership. Group ownership or partnerships can make full ownership accessible at lower levels.

Factors to Consider

When deciding whether to fly private, consider the following:

1. Time Savings: Private jets can access over 5,000 airports in the US, compared to about 500 served by commercial airlines. This can dramatically reduce travel time, especially for trips to smaller cities or multiple destinations.

2. Productivity: The ability to work, hold meetings, or rest comfortably during flights can increase productivity.

3. Flexibility: Private flights operate on your schedule, not the airline's.

4. Privacy: Sensitive business discussions can be held without fear of being overheard.

5. Family Time: For busy executives, private travel can mean more time at home between trips.

6. Tax Considerations: Some private flight expenses may be tax-deductible if used for business purposes. Always consult with a tax professional.

7. Industry and Location: Entrepreneurs in industries requiring frequent travel to remote locations may find private aviation more justifiable.

Common Misconceptions

1. It's All About Luxury: While private jets offer comfort, for most users it's primarily about efficiency and time-saving.

2. Only for the Ultra-Rich: While still expensive, options like jet cards and charter make private aviation more accessible than many realize.

3. It's Always More Expensive: For groups or complex itineraries, private travel can sometimes be cost-competitive with first-class commercial tickets.

Privacy Considerations

For high-profile entrepreneurs, privacy can be a significant concern when flying private. Some strategies to maintain privacy include:

1. Using an LLC: Most aircraft are owned by LLCs, which can provide some anonymity.

2. Trust Ownership: Companies like TVPX offer trust services that can further obscure ownership.

3. Private FBOs: Some fixed-base operators (FBOs) offer enhanced privacy features for arrivals and departures.

4. Flight Tracking Blocking: It's possible to request that your aircraft's movements not be displayed on public flight tracking websites.

Conclusion

Private aviation can be a powerful tool for entrepreneurs, offering unparalleled time savings and flexibility. While the costs are significant, for many successful business owners, the benefits can outweigh the expense. As with any major financial decision, it's crucial to carefully consider your specific situation, consult with financial advisors, and start with less committal options like charter before making larger investments in private aviation.

Whether you're just starting to explore the world of private jets or considering stepping up to fractional ownership, understanding the options and costs involved can help you make an informed decision about when and how to incorporate private aviation into your travel strategy.

Remember, the goal isn't to show off or live luxuriously - it's about maximizing your most valuable asset as an entrepreneur: your time.

Article created from: https://www.youtube.com/watch?v=gDT3nf21mpU