Business Jets Archives - Page 2 of 4

More people are searching for private jets online

Dan Robles has written a very interesting post on Plane Conversations about using data from Google Think Insights to determine that more and more people are searching the Internet on terms such as private jet, jet charter, jet charter cost, VIP travel etc. Specifically, here is the data that Dan found from Google Think Insights:

Plus these related searches:

(Note: All the data is from January 2008 and December 2011 and for the USA)

So what does this tell us about the state of the private jet or business jet market along with the economy? One way to look at things is that people just happen to be using the internet more to find information about renting private jets. On the other hand, the data could also suggest that more people are also interested in renting private jets as well because after all, there are plenty of good reasons to do so given the state of commercial aviation (e.g. delays, security hassles, lack of flying options to smaller markets etc.).

For his part, Dan noted that Social Flights has long suggested that there are opportunities to increase private charter shuttle services between key locations as well as for companies to share private aircraft scheduled to fly between regions. He also concluded that search term trends are important because they can indicate the intentions of the market as well as new opportunities to serve it.

At the very least, the Google data does look interesting and bodes well for the private jet market in the USA.

Britain’s “Learjet tax” delayed

Britain’s airlines, which have been lobbying to have The Air Passenger Duty (APD) killed, are now upset that the tax will remain in place and will not yet be extended to private business aircraft. Specifically, AVweb and the Guardian have pointed out that British airlines like British Airways and Virgin Atlantic are accusing the government of favouring private jet travellers over commercial airline passengers by choosing to delay the so-called “Learjet tax” or “Learjet levy” until April 2013. Simon Buck, the chief executive of the British Air Transport Association (BATA), which also represents 10 airlines, has been quoted as saying this delay is "unfair" and that:

"It is a year’s grace for the wealthy man in the business jet, but for millions of people who cannot afford to fly by business jet, they will have to pay APD increases at twice the rate of inflation from April next year. How is that fair?"

Such rhetoric might be familiar with readers across the Atlantic where its regularly directed by politicians and the media at corporate jet owners and users – just because they are corporate jet owners or users.

However and according to BATA, Britain already imposes the highest taxes on flying in the world and more than 8.5 times the average of the rest of Europe. The Guardian has also pointed out that new Treasury forecasts project that APD revenue will rise from £2.2 billion last year to £2.6 billion this year and keep rising until it hits £3.8 billion in 2016/2017. In other words, there is no way the government will discontinue such a money making levy. Moreover, passengers will find out next week the latest addition costs to fly out of a British airport when the Treasury announces the new flight tax bands – which at the moment, range from £12 for a short-haul flight to £85 for an ultra-long haul flight.

Nevertheless and according to an aircraft charter group Air Partner, the cost per passenger of a shorthaul business jet flight would be nearly four times the cost on a commercial carrier. Hence and for now, it might still be more cost effective in many instances to fly via a business jet rather than commercial but that may soon change.

Want to own Lee Iacocca’s former private jet?

If you are in the market for a private jet with prominence, AuctionAlliance in South Africa will soon (21 days according to their auction countdown ticker) be auctioning off two DC-9 aircraft that boast either famous former passengers or owners.

The first aircraft, ZS-MNT, was manufactured in 1966 and was originally owned by Lee Iacocca who gained renowned for engineering the Mustang and reviving Chrysler in the 1980s. Later, the aircraft was owned by Ken Mizuno, a Japanese golf club developer with alleged ties to the Yakuza (organized crime in Japan) who then lost the aircraft at the roll of the dice to Steve Wynn, who subsequently used it to ferry Las Vegas high rollers to his Golden Nugget casino.

In 2008, ZS-MNT was acquired by Elite Jet & Mvelaphanda to charter South African heads of state and ministers. Since then, it has transported Nelson Mandela to his home, Thabo Mbeki on a business trip to Darfur, deputy president Kgalema Mothlanthe and former UN secretary general Kofi Annan.

The second aircraft, ZS-PYB, is part of Minister of Human Settlements Tokyo Sexwale’s family trust and its configuration includes a double-bedroom with an en-suite bathroom and plenty of wood veneer detail.

According to Auction Alliance, most of the demand for these two aircraft is expected to come from charter companies, corporates and perhaps African governments. Specifically:

The aircraft configuration of 17-19 seats, generous sleeping accommodation, meeting facilities and even the internal stairway, makes these aircraft ideal as they can carry large contingencies, which is often a problem when attending conventions across Africa.

Moreover, both aircraft have relatively low mileage at about 36,000 hours and they are in excellent condition.

Hence and should either of these aircraft suit your aviation requirements, be sure to check out the virtual tour that Auction Alliance has included on its website.

Has the demonizing of corporate jets made them a thing of the past?

John M. White (aka JetAviator7) has written a thought provoking post to ask if corporate jets are a thing of the past thanks to their demonizing as “being toys of the rich” or examples of “corporate greed.” Specifically, White pointed out calls for the reduction or elimination of tax benefits for companies acquiring corporate jets despite the fact that:

Business aviation and aircraft manufacturing account for thousands of jobs along with a healthy portion of the USA’s international trade and exports.
The manufacturers of corporate jets will account for approximately $23 billion in sales each year for the next decade.
Most of these business jet manufacturers are (still…) located in the United States.

White then noted an article by Joe Sharkey for the New York Times that described the mood at the recent NBAA (National Business Aircraft Association) convention in Las Vegas as “looking as grave as an assembly of undertakers who had just checked their 401(k)s.”

White then included the following quote from Sharkey’s article:

Now, whenever I write that corporate aircraft, including charters, can make sense in many business situations, I get furious e-mails accusing me of going to the dark side. So let me hasten to say that I’m leaving Las Vegas in a middle seat on a commercial plane, in a row back by the restrooms, for a trip to New York that will take 12 hours, with connections.

Hence, we want to ask you our readers what you think: Are corporate jets soon to be a thing of the past thanks to all of the recent criticism of them? Moreover, have you noticed any rise in negative commentary or chatter about corporate jets or corporate jet use in the UK or Europe or is this just American politics or the politics of class gone wild (again…)?

Corporate jets: Defending the indefensible

Corporate jets in the US have received a considerable amount of flak in the US from the media as well as President Obama ever since the leaders of the Big Three automakers flew to Washington DC in their corporate jets in order to ask for bailout money from Congress. However and in a recent article for General Aviation News, Charles Spence attempted to make the case for owning a corporate jet.

Specifically, Spence recalled how Playboy had wanted to buy a corporate jet back in the early 1970s (see Inside Hugh Hefner’s 70s Playboy Jet) but was fearful of a backlash from readers and advertisers alike who might not see it as a useful business tool. Hence, he wrote an article for the magazine that detailed how corporate jets are used by businesses and how using one makes it possible to achieve significantly more in a much shorter amount of time.

After Playboy purchased their corporate jet, there was little if any negative reaction from readers. Spence concluded that understanding will not always bring agreement as to why a corporate jet might be needed but it can bring acceptance.

However, the best case for supporting the use of corporate jets was made by Warren Buffet in an interview where he was asked to explain why he owns and uses one. In short, Buffet explained that a corporate jet makes his life better and easier because as the CEO of Berkshire Hathaway, he needs to do a considerable amount of traveling.

In fact, Buffett initially named the Bombardier Challenger 600 that he bought twenty years ago “The Indefensible” due to his previous criticisms of corporate jet purchases by other CEOs. However and after he started using one, he renamed it “The Indispensable” as he realized just how valuable of a business tool a corporate jet can be.

How much income do you need to own a private jet?

In the USA, there is a bit of political theater going on as President Obama has repeatedly called people earning as little as $250,000 a year “jet owners.” However, does President Obama’s numbers really add up? In other words, could someone earning $250,000 a year really afford to own, operate or charter their own private jet?

The Wall Street Journal’s Robert Frank and Kelsey Hubbard recently sat down and gave a reality check about the level of income it really takes to become a true jetsetter.

Specifically, the pair noted that a good private jet will cost $5 million to purchase – unless you go for a scaled down version for a few hundred thousand dollars. However, they also noted that it will typically cost $500,000 to $1 million a year just to operate a private jet. This means that a private jet owner will probably need at least $10 million in income per year to afford to become a jet setting jet owner.

Moreover, it was noted that the cheapest rate to charter a private jet from New York to Florida was $3,000 an hour – starting from the moment you board. Hence, a round-trip flight from New York to Palm Beach Florida would probably cost at least $20,ooo or one-tenth of the income of someone earning only $250,000 a year.

In other words, owing and chartering a private jet is really just an option for a very small and elite group of wealthy individuals in our society – not those earning “merely” $250,000 a year.