The undeniable lure of private travel — peaceful plane rides, smaller and quieter airports, no lines — has raised demand for private aviation. According to Alton Aviation Consultancy, commercial airlines’ share of the premium travel market fell to 80% in 2022 (down from 90% pre-Covid), thanks to a surge in private travel. An estimated 10,000 to 15,000 more people are flying private since the start of the pandemic.
The industry’s unprecedented demand has also brought issues such as labor shortages, maintenance delays related to disrupted supply chains, and limited supply to meet aircraft demand. The cost of private travel, typically billed hourly, has increased at a faster rate than inflation. Flights chartered for $5,000 per hour in early 2020 can now cost triple that and often come with more delays and logistical issues than before.
If you’re considering private aviation, take some time to weigh the aforementioned benefits against the challenges. The next step is building your aviation profile to help you determine the best service provider for your needs.
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Your aviation profile and key decision points
How many hours do you anticipate flying per year? Is your use of private air travel consistent from one year to the next?
Do you typically prefer to fly during peak travel times, such as on or around holidays? Are you flexible when scheduling travel times?
Your Travel Preferences
How many passengers will typically fly with you? Will this number vary significantly across different trips?
Are you flying for business, personal or both?
Where do you fly most frequently? Do you fly internationally?
What is your preferred aircraft size, type or average age?
While flying private is more expensive than commercial, do you find yourself looking for the best value? Or do you want the best experience with less concern for cost?
What type of private aviation program is right for you?
Once you’ve refined your travel profile, you’re ready to assess which aviation program option best aligns with your needs.
Whole aircraft ownership
You own the plane and have full control. You, or a management company you retain, will be responsible for crewing the aircraft and managing the maintenance and storage. You will have unfettered access to your plane, but also bear the full costs of use.
In certain situations, a joint venture may own the aircraft with multiple owners sharing the aircraft’s use and associated costs. The cost of storing and maintaining a wholly owned aircraft can vary greatly depending on the particular aircraft and its geographic location. It is important to analyze the projected overhead and maintenance costs in advance of making a purchase.
Fractional ownership or leasing
A third-party company maintains the aircraft, but you buy or lease an interest in a particular aircraft. Typically, the industry starts at 50 hours per year, which would equate to a one-sixteenth interest in a plane.
Fractional ownership has lower upfront cost than full ownership. The third party company handles all maintenance and management, but you ultimately pay the costs. Your interest grants you access to the owner’s aircraft fleet, which allows fractional owners of the same aircraft to fly on the same day.
Jet cards and memberships
You purchase a set number of flight hours or deposit a fixed-dollar amount with a provider, and draw against your balance when you fly. Jet cards and memberships may offer flexibility, less commitment and prices similar to an ad-hoc charter. However, they may be more expensive than full or fractional ownership based on operating hours.
You book the aircraft on a flight-by-flight basis. Chartering offers more flexibility and less liability than ownership and may be well-suited to premium travelers who fly infrequently. However, given current market conditions, charter companies may require you to book travel far in advance, and you will compete with other travelers during peak usage periods.
In addition, charter companies often add surcharges for fuel, landing fees and pilot wait times, and in some cases, charge repositioning costs for flights.
Navigating the options for private aviation can be time-consuming given current market conditions and the range of programs. Goldman Sachs can help clients educate themselves about the private aviation market and introduce them to preferred partner service providers.
This material is intended for educational purposes only and is provided solely on the basis that it will not constitute investment advice and will not form a primary basis for any personal or plan’s investment decisions. While it is based on information believed to be reliable, no warranty is given as to its accuracy or completeness and it should not be relied upon as such. The private aviation industry continues to evolve and individuals should consider their own circumstances and financial profile before committing to any private aviation program. Information and opinions provided herein are as of the date of this material only and are subject to change without notice. You are encouraged to consult with your own investment, tax, legal, or other professional advisers regarding your specific circumstances. Goldman Sachs is not a fiduciary with respect to any person or plan by reason of providing the material herein, information and opinions expressed by individuals other than Goldman Sachs employees do not necessarily reflect the view of Goldman Sachs. This material may not, without Goldman Sachs’ prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. This material is not an offer or solicitation with respect to the purchase or sale of any security in any jurisdiction. Investing involves risk, including the potential loss of money invested.
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