Taking Flight: Evaluating Your Private Travel Options

In response to the COVID-19 pandemic’s impact on the commercial airline industry, more travelers are considering private jet options. Understanding the structure and true costs of each is key to making the right selection.

Various forms of private jet travel have long been an option for executives, business owners and families with multiple homes, or simply the desire to travel frequently. Yet many continued to favor commercial air travel given its comparatively low cost and relative scheduling convenience. However, faced with a global pandemic and its associated health safety concerns, the reduction in the number of commercial flights, the resulting discontinuation of service to some remote domestic airports and severe limitations on international travel, the current state of commercial travel has many travelers considering other options.

Private Aviation Options

There are four main choices when it comes to private jet travel. The following table introduces each, along with its best use and several primary considerations.

Since travel needs vary with each trip, typically the above options are used in complementary ways. For example, the owner of a mid-to-large cabin jet may prefer to use a jet card for a shorter flight because of the costs associated with a larger cabin jet.

Typically, charter and fractional options enable first-time and infrequent users to access private aviation; however the cost per hour can be considerable. Generally, when travel needs reach 150 flight hours annually, full ownership starts to become more cost-effective.

Which Option Is Right for You?

As with other financial decisions, when considering private travel, it helps to define what you want to achieve before committing your investable assets, and to what extent. Gaining that understanding starts with answering five key questions with each trip you plan to take.

Where do you want to go today?

Your destination often narrows the options. For instance, prepaid or subscription flights often involve smaller jets and are therefore better suited for shorter, domestic trips. When your business travel frequently takes you around the globe or you have a need for travel on short notice – as in the case of a developer who wants to view a newly listed property before bidding – owning a private jet can be the better choice given the immediate access to an aircraft, crew and ability to access any destination.

How many are traveling?

The size of your party helps determine the type of aircraft you need, which may narrow your options. For instance, the larger the group, the more cost-effective a charter flight for a one-time event such as a wedding or golf tournament may become. However, when traveling alone on short notice domestically, using a private jet membership program may get you an unoccupied seat at a cost comparable to flying first class on a commercial flight.

How important is privacy and consistency?

For membership options, different service levels offer different types of amenities and access to aircraft. For instance, if ensuring you are the cabin’s only occupant so that you can work without interruption or guaranteed privacy is important, a higher membership level or even ownership should be considered.

What is the purpose of your flight?

For perennially time-pressed travelers, the ability to simply drive up to the plane and depart, bypassing commercial security checkpoint lines and restrictive flight schedules, may be reason enough for choosing a private alternative. For families, it may be arranging travel among multiple and remote homes or for regular visits to far-flung relatives. Also, the more frequent your needs, especially where a family business is involved, the more viable fractional or full ownership become.

Case Study

Decision points: comparing memberships

A client wanted to visit family members in three different cities. To accommodate travel preferences regarding cabin size, we requested quotes for a Citation Excel/XLS from three different membership firms. The range in execution and considerations within each of the membership programs illustrates why many travelers involve an aviation expert in their decision-making.

By means of comparison, the hourly cost of a similar trip for the owner of this type of plane would be much lower, with the total direct operating cost closer to $30,200. However, after factoring in the fixed costs associated with ownership, the client would need to anticipate making this same type of trip ten times or more annually for ownership to be cost-effective, which is why it was not considered.

Choose the Right Team

Given the multitude of variables and options involved in selecting the most appropriate private air travel arrangements for your family and business needs, involving aviation experts is advisable. From vetting potential operators and obtaining referrals to confirming an aviation company’s reputation and ultimate cost, they can help you create an analytical framework. Where full or fractional ownership of a plane is under consideration, they also have the experience needed to collaborate with your aviation attorney, appraiser, private banker, brokers and maintenance service company to facilitate the purchase.

Contact Northern Trust to learn more about our aviation resources, ownership support and expertise in structuring personalized financing strategies to meet your air travel needs.