Aircraft, What should I know before buying an airplane?
Few investments involve as much money and forethought as buying an airplane for your business or pleasure. It is a big decision and one that should not be made without considering all the aspects it entails. For instance, did you know that financing might be an ideal option, even if you have the money at hand? Also, if you decide to finance your purchase, did you know that the lease payment is not the costliest part about owning an airplane? This blog mentioned some tips from Greenwood Aerospace regarding buying an airplane for your business.
First and foremost, let us look at the strategic benefits of owning an airplane. The advantages are numerous, but they can be put into three primary categories:
If you have ever attempted to hold a meeting on a commercial airplane, you know that it is almost impossible. Commercial flights are not only cramped, but the curious ears and prying eyes can make a meeting uncomfortable and unproductive. Owning an airplane provides you with a level of privacy and confidentiality that can make meetings in the air your best conference room.
When you purchase an airplane, you have bought a huge reserve of time that you can spend on your business or other tasks. You can go from one place to another without enduring the hassle that comes with commercial flights, including baggage, boarding lines, flight schedules, the TSA, etc.
Having your own plane turns half an hour of flight time into an hour of total travel time, rather than what would otherwise be 3 hours with commercial flights. Ideally, the ability to hold meetings while traveling saves you time.
Personal security is improved as you have total control of the pilots, crew and passengers. In addition, when traveling overseas, you’ll have the ability to fly more directly to your destination and depart faster when necessary.
So, what are the most important things to consider when buying an airplane?
Financing vs. Buying
While you may have the funds available to purchase the aircraft outright, financing is, more often than not, the best option. That is because the financing rates on airplanes are so favorable that it makes more sense to put that money into another venture that has a bigger return compared to the interest rate.
Are You Ready for the Expenses?
Leasing doesn’t call for a large sum of money compared to buying, but it is still a substantial expense. However, your financing payments are dwarfed when compared to the cash demand of running the plane. From fuel, pilots, insurance and hangarage to landing fees and maintenance, the actual aircraft purchase isn’t the most expensive part of owning an airplane.
There are over 30 private airplanes models available in the market, but in every passenger and distance class, there are just 2 to 3 models to pick from. As such, it is important to have a proper understanding of how you plan to use the airplane, the distance you will often fly, and the maximum number of people you’ll need to take with you.
Lastly, there are numerous and specific steps to buying an airplane. As a first-time buyer, you need to know what you are getting into and be familiar with all the requirements for owning, leasing, financing, operating as well as buying and selling an airplane.
With all this information, you might be scratching your head, not knowing where to start. Consult your bank as most of them are able to finance aircraft purchases. If you have decided to take the leap and get your own airplane, consider working with an experienced professional as it makes the entire process smoother.