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It’s an intriguing math exercise that always makes even the most flush jet owners listen in: Is it really possible to make
a plane — the same plane for which you paid $20 million plus tens of thousands a month in fuel and upkeep charges — pay for itself? The answer always used to be, “Nice thought, but not quite.” But now, thanks to the red-hot resale market and a new breed of aggressive and creative plane-management companies, it’s increasingly, “Yes, actually, it is possible.”
Once you’ve stepped up from fractional jet ownership to owning your own plane, you have two options for managing your treasured asset: self-management, which brings great satisfaction but also the headache of having to schedule maintenance and staff your
cockpit (see “How to Hire a Pilot,” page 132); or hiring — and often writing a fat monthly check to — a management company.
But that’s only the case with the old-school management companies. The new breed of management companies, by contrast, aim to write you checks. And they take special pride in turning twin-engine money pits into, if not cash cows, then at least break-even luxuries.
The alchemy starts on the debit side, at the pump and in the service bay. The best management companies can save you as much
as $1.20 a gallon off the going price of fuel. Parts are often sold to owners at cost, and service charges are reduced as much as 30 percent. The companies also have numerous pilots on staff, meaning a seasoned pro is always available.
But the real fun starts in the credit ledger, as these companies turn your plane into a lean, mean, revenue-generating charter machine. “You have to remember,” says Scott Beale, CEO of the Atlanta-based management company FlightWorks, “if a plane is sitting on the ground, it’s costing you money, when it should be up in the air making you money.”
Before you can begin chartering your plane, you’ll first need a Part 135 certificate permitting you to legally generate hourly revenue. It’s not as complicated as it sounds — the charter company will be happy to add your plane to its certificate. Even better, some very significant tax advantages accrue to owners of a Part 135 aircraft. Using a depreciation schedule known as the Modified Accelerated Cost Recovery System, the designation allows you to write off a full 75 percent of the value of the plane in the first five years. On a $20 million plane such as the Challenger 604, that’s $14.9 million in tax savings right there.
One underlying question is how many hours a month you must charter your plane to make doing so worthwhile. WorldWide Jet, a Scottsdale, Arizona–based management company, has found that the magic number for a large-cabin aircraft seems to be around 80 charter hours a month. With the additional time required for repositioning, that comes to roughly three weeks a month that your jet is in the company’s hands, which for some people, understandably, is a major sticking point. One of the reasons you paid $20 million for your jet in the first place, after all, was so you could fly in it every so often. But maybe your conception of “your jet” is too narrow. Companies such as WorldWide Jet and FlightWorks offer a choice of jets from their fleet to anyone whose plane is out on charter when he wants to use it. “I gave them less than eight hours’ notice, and they got the plane I wanted on time — they even stocked the food I requested,” says Philadelphia Eagles linebacker Takeo Spikes, a FlightWorks spokesman who likes to fly on a Hawker 800.
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