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Maximize ROI On Your Aircraft


Maximize ROI On Your Aircraft

How Can You Maximize ROI on Your Aircraft?

Owning and operating an aircraft is a big investment.  For a 6-passenger aircraft, the annual out-of-pocket operating cost is roughly $1 million a year. At maximum utilization, that covers between 300-400 flying hours per year. But even if you are only flying between 50-100 hours a year, owning an aircraft still makes economic sense.

 

Chartering your aircraft is a great way to reduce your operating costs and maximize your ROI. What is chartering? Chartering is a process where you lease the unused flight hours of your aircraft to a third party or an aircraft management company. Chartering allows you to use your aircraft whenever needed while providing a source of funding that you can use to offset your annual operating costs.

 

On average, a 50-hour flight card costs around $500,000 a year. When you own and operate an aircraft, you could fly as much as 100 hours for that same $500,000 and then charter the other available time to cover the balance of the annual operating costs. Chartering may provide certain tax benefits for aircraft owners, as well.

 

What Should I Ask a Company That Wants to Charter My Aircraft?

Chartering is an excellent way to maximize your ROI but some aircraft owners may have concerns about whether a charter arrangement will work for them. Will I still have access to my aircraft whenever I need it? How do I know my aircraft won’t be overused? Does the charter company manage all the scheduling? Who employs and manages the crew and takes care of insurance, maintenance, fueling, and repairs? When owners charter with the right company, these concerns should be clearly addressed and resolved.  It’s critical that aircraft owners have complete confidence that the charter company will take excellent care of their aircraft.

 

Other common questions about structuring a charter program relate to the parameters applied to charter trips and travelers. Is there a typical client profile for chartering my aircraft? How is pricing set up and are trip distance minimums in place? Will international travel be allowed? What about pets? Will I need to approve every charter trip? Owners must be comfortable that standards and processes are in place to make sure that their aircraft is chartered in a way that aligns with the level of oversight and involvement that works for them.

What To Look For In a Professional Charter Company

Engaging an experienced charter company, particularly one with a large fleet under management helps ensure you are maximizing both your ROI and your peace of mind. Not all charter services are alike, so when comparing providers be sure to ask these questions:

 

●      Will they ensure your aircraft is available when you want and need it?

●      Will they employ and manage the crew?

●      Do they have a sound methodology to maximize utilization without overuse?

●      Do you maintain control over your aircraft with final Go/No Go on charter requests?

●      Will they work with you to set charter rates and your share of the proceeds?

●      Do they manage all aspects of your aircraft including fueling, maintenance, insurance, and repairs? Do they offer discounts on these services?

●      Are they willing to give references you can speak with?

 

As an aircraft owner, you should expect and receive a high level of service from a professional charter company. You should be completely comfortable that the chartering arrangements for your aircraft are clearly defined, smoothly executed, and focused on meeting your needs and expectations.

 

Chartering your unused flight hours with the right professional charter company can offset your annual operating costs by as much as half, letting you spend twice as much time in the skies for the same amount of money.  Be sure to choose an experienced provider that understands your needs and is well-versed in structuring charter services that protect your investment and improve your ROI.

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