Jet Ownership Taking Off

Just three or four years ago, private jets were the domain of the super-wealthy, providing the elite class with a level of privacy and convenience impossible to attain on commercial airlines. The owners of these aircraft (also called “business jets”) were able to depart on their own schedule without any of the hassles or delays associated with regular airports. Travel time for jet owners is typically a fraction of that required for commercial flights because the airports are often closer, there are no security hassles, and the plane takes off as soon as the owner arrives.

Not surprisingly, only a select few could afford the $5 million to $20 million required to buy a business jet such as the Gulfstream or Lear, two of the most popular business jets of yesteryear. Maintenance and fuel costs further limited the accessibility of these luxury craft to large corporations and a few private individuals. In fact, only about 11,000 business jets exist worldwide. By contrast, there are something like 40,000 Rolls Royce automobiles on the road today.

Dramatic changes in the jet industry over the last few years, however, has opened up the world of private jets to hundreds of thousands of individuals and companies who were previously priced out of the market. The most important development in private jets has been the introduction of VLJs, or very light jets, also known as Micro Jets. These jets, characterized by the Citation Mustang, the Eclipse 500 and the Embraer Phenom, are smaller, lighter, and much more fuel efficient than previous generation business jets.

Other manufacturers of VLJ's include Adams, Cirrus, Diamond D-Jet, Epic, Excel, Honda, Piper and Spectrum. These smaller jets still travel at speeds of up to 500 miles per hour (depending on the model and configuration), they can use about 70% less fuel (an important consideration with oil prices soaring) and can be flown with just one pilot, creating a tremendous cost savings per flight hour for the owner or charter.

Some of the new generation of private business jets can be owned for less than $1.5 million, which, although hardly inexpensive, still puts them within reach for tens of thousands more potential buyers. In fact, the demand has been so high for these modestly priced VLJs, that buyers are willing to wait several years for delivery.

Some buyers who placed deposits with the manufacturers of these new jets are willing to sell their place in line (called a “position”) for a premium. Because of the complexities of the transaction, a third party is necessary to orchestrate the purchase of these positions.

Dean Andrew Kantis, President of MicroJetPositions.com, a company that provides guidance for all aspects of Micro Jet and VLJ transactions (including buying and selling of VLJ positions), says, “Most people don’t realize how much simpler and less expensive it is to purchase a business jet today. Very Light Jets have completely changed this industry. We expect that the number of private jets in the sky will triple within the next few years, and then triple again by 2020.”

Further enhancing the accessibility of Micro Jets is the latest trend: “Shared Ownership.” Since most business jets are underutilized anyway, it makes sense to share the costs of ownership with one or more other parties. For example, a $1.5 million Eclipse 500 may be shared by two, three or even four people, lowering the upfront cost to $500,000 each or even less. The maintenance costs are also divided between the owners based on utilization of the aircraft.

As one might expect, the challenge with shared ownership surrounds the scheduling and management of the jet and the division of maintenance and operating costs. Fortunately, there are management companies that handle all of these details for a monthly fee.

Kantis explained, “Management companies hire and schedule the pilots, take care of the fueling and maintenance, ensure FAA compliance, and coordinate take off and arrival times with airports and owners. They take a complicated set of tasks and streamline them for the owners through automated software programs specifically designed for this industry.”

Kantis says that his website, MicroJetPositions.com, has seen an increase of 300% in traffic in the last six months alone. “Most visitors are interested in either buying an existing jet position or in sharing ownership with one or more buyers. Our clientele ranges from the complete novice to experienced jet owners and even pilots. We take care of every aspect of the transaction and even help them locate a management company to direct the day-to-day operations involved in owning and properly maintaining an aircraft.”

Micro Jets are regulated by the FAA (Federal Aviation Administration) and must meet strict safety standards set by the federal government.

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On the Net: VLJ Micro Jet Web Site: http://www.MicroJetPositions.com