Preston Holland, CCO of FLYING Finance, discusses private aviation including costs, chartering, jet cards, fractional ownership, pilot partnerships, and the process of purchasing an aircraft. Insights on tax implications and determining if aircraft ownership is the right choice.
Private aviation serves as a strategic business tool for increasing capacity and competitiveness, beyond luxury travel.
Jet card memberships offer convenience and flexibility, but evaluating operator stability is crucial for investment safety.
Dry leasing in private aviation provides operational freedom but requires owners to manage crew, fuel, and operations independently.
Chartering private aircraft requires balancing access priorities and availability, considering trade-offs between revenue and personal usage flexibility.
Deep dives
Understanding Different Aspects of Private Aviation Industry
Private aviation is not just about luxury travel but also a business tool that increases capacity and competitiveness. Preston Holland discusses private aviation models like chartering, jet card memberships, and fractional ownership, shedding light on their costs and benefits. Operating under Part 91 or 135 regulations impacts how aircraft are used and managed.
The Value and Risks of Jet Card Memberships
Jet card memberships offer convenience and flexibility, where depositing funds upfront allows access to private jet services. However, customers need to evaluate the operator's stability and financial strength to ensure their investment's safety. While jet cards provide premium services, the risks associated with operator insolvency should be considered.
Insights into Dry Leases and their Functionality
Dry leases in private aviation allow individuals or entities to lease aircraft without crew management, akin to renting a car. Understanding the difference between dry and wet leases is crucial, with dry leasing offering more operational freedom but requiring owners to manage crew, fuel, and operations independently.
Challenges and Considerations in Chartering Private Aircraft
Chartering private aircraft comes with considerations like access priority and availability. Owners entering the charter market may face reduced spontaneous flight options due to prior bookings by charter clients. Understanding the trade-offs between charter revenue and personal usage flexibility is essential for aircraft owners.
Owning vs. Chartering: Financial Considerations
Owning private aircraft involves significant financial commitment and risk. The episode discusses the advantages and drawbacks of owning aircraft, highlighting factors like maintenance costs, depreciation, and the impact on financial statements. It explores scenarios where chartering might be more cost-effective, especially for individuals flying under 300 hours a year.
Selecting the Right Aircraft: Mission Fit and Depreciation
Choosing the right aircraft involves aligning it with mission requirements and depreciation considerations. The episode delves into the process of selecting an aircraft that meets 80% of the mission needs, considering factors like range, passenger capacity, and maintenance support. It emphasizes the importance of finding aircraft models that fit within the sweet spot of 10 to 25 years old for optimal value.
Timing the Aircraft Purchase: Factors and Decision Points
Deciding when to purchase an aircraft involves analyzing financial, operational, and usage factors. The episode discusses break points for aircraft ownership, including around 300 hours of annual flight time. It also delves into situations where owning an aircraft becomes advantageous, based on the need for depreciation benefits, mission requirements, and the cost-effectiveness compared to chartering.
Bonus Tip: Free Consultation for Guidance
The episode offers a bonus tip for listeners, highlighting the availability of free 15-minute consultation calls for aircraft-related questions and advice. This service aims to provide informed guidance on topics such as chartering versus ownership, selecting the right aircraft, and timing the aircraft purchase. Listeners can leverage this resource to enhance their understanding of private aircraft ownership considerations.
Preston Holland is the Chief Commercial Officer of FLYING Finance, which is an aircraft financing company. Before taking over the finance business, Preston ran FLYING Media Group (now known as Firecrown) as Chief Operating Officer.
