How to invest in private aviation effectively

Is it possible to retire at the age of 34 and live without worries? Absolutely, but to do this, one needs to make a profitable investment, so that invested funds will subsequently work for you.

As a rule, entrepreneurs choose the classic option of investing in real estate. However, with this market being unstable, serenity can never be guaranteed. The popular and prospective solution is to invest in private aviation.

In general terms

Since the first civilian airplane took off the ground, flying has never stopped. People have used and will continue to use airliners because they are convenient and fast. Today, passengers place more and more importance on comfort. They value their time and safety, so they turn to private aviation. Business jet cabins are designed with all travelers’ needs in mind: they are spacious and pleasant to be in. The guests are provided with in-flight Internet access, a mini-office, catering services, and entertainment including watching movies, listening to music and holding celebrations, up to weddings, at an altitude of several kilometers, none of which is available on board a standard airliner.

Jetliners like HondaJet, for example, feature fully-enclosed lavatories, enlarged luggage compartments alongside minimized noise levels.

It is also important that while ordinary planes fly at an altitude of about 10,000 meters, jets fly 2,000 meters higher. Thus, there is no turbulence during the flight. In addition, the pressure system in private jets is arranged so that the passengers feel at most 900 meters above sea level: the body does not feel overloaded and the cardiovascular system does not suffer.

It should also be noted that passengers of business aviation jets are served in separate terminals, undergoing a shortened document control procedure. Accordingly, they arrive at the airport just half an hour before departure. It saves time, which is especially appreciated by customers flying on business.

Fractional ownership of a jet: the benefits are obvious

An attractive and profitable option for investing is the fractional ownership of a jet. It can be compared to timeshare in real estate.

Fractional ownership means paying in advance for a fixed number of flight hours, which the owner (but not the proprietor of the aircraft!) is entitled to use throughout the year. Various membership programs have been developed — jet cards, which start at 25 hours. The minimum membership fee is 1/16th. The average cost of a jet card is $100,000.

The obvious advantage of fractional ownership of a jet is the stability of service. You are guaranteed to get a jet with a familiar crew and a familiar set of premium quality services at the right time. Flights are made in any direction.

As a rule, a jet fractional ownership contract is concluded for 5 years. If necessary, your share can be sold to the private jet operator by paying a remarketing fee (about 7% of the share value), or on the open market (without the right to transfer unused hours to the new owner). There is no monthly fee for operating a business jet in fractional ownership: payment is made for each flight hour.

Thus, investing in a business aviation airliner with fractional ownership is an optimal solution. You have no long-term obligations, you pay exactly for the flight time, and you fly with complete confidentiality, which is especially important for public persons.

Here’s a real example. A 1/16th share of an EmbraerPhenom 300 airliner would cost about $624,500. Monthly costs would not exceed $6,000. A flight hour of this private jet costs $2,000 on average.

Investing in private aviation during the pandemic

The COVID-19 pandemic, which has literally turned the world upside down, has changed the airline market. Even those who used to travel exclusively by regular flights now resort to private aviation services.

The main reason is the closed borders of many countries. Today, alas, it is obvious that the coronavirus is not going to step down yet. At the same time, people, tired of the restrictions, want to continue living as they did before the pandemic: vacationing at resorts, doing business in other countries. Passengers rent jets for their own purposes because airports accept private airliners even in countries closed to regular aircraft.

Unlike the beginning of the pandemic, when jets flew primarily on evacuation flights, business aviation aircraft are used today just as they were before COVID-19, the only differences being a changed pool of tenants and a leveled seasonality: private jets are in demand 365 days a year today.

Business aviation services are relevant in the era of the pandemic not least because passengers pay increased attention to their health today. Chartering a jet is practically a hundred percent guarantee that you will not catch the virus: the lessees have minimal contact with third parties and there are no other passengers on board the liner. Understanding this, clients choose to be safe and fly private jets rather than business class.

A notable trend today is flights on business airliners for vaccination purposes from Russia to other countries, such as Hungary or Serbia. Clients also combine vaccination and fashionable vacations, for example, at European ski resorts. Jet renters fly to Germany, Spain, or Portugal, get authentic vaccination documents and rest in comfort where they want.

The relevance of medical aviation is also worth noting. Jets are designed in such a way that, if necessary, they can be easily transformed into medical aircraft: the necessary equipment — stretchers, defibrillators, drip racks, intensive care modules and so on — can be installed inside the cabin.

Aircraft can be used in emergency cases to transport coronavirus patients under special flight conditions, as well as for air transportation of bedridden patients, the evacuation of victims from disaster areas, flights for planned operations, including flights abroad, or air transportation of pregnant women to give birth in foreign clinics. These private aviation services are always in demand.

Let’s summarize. Investing in business aviation airliners today is a venture with guaranteed return. The high level of service in business aviation, unlimited geography of flights and ample opportunities in times of pandemic are attracting more and more customers who choose comfort and safety.

By Vitaly Arkhangelsky, director of Jet. Paris — AVIAV TM (Cofrance SARL — Nice, France)

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