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For Busy Entrepreneurs, Private Jets May Be the Way to Go

Posted on: August 1st, 2017

For Busy Entrepreneurs, Private Jets May Be the Way to Go

The allure of boarding a cushy private jet for your next business trip is undeniable. Imagine avoiding long TSA lines and the seemingly inevitable delays and cancellations (as well as the occasional forced removal of passengers) that come with commercial air travel, and instead stepping into your own plane booked to fly you right to your favorite office branch, client, prospect or business deal—all in better-than-first-class comfort.

It’s an option that may be more realistic than you think. Private aviation isn’t simply an option for the wealthiest 0.1 percent anymore. Successful business owners whose names aren’t Ellison, Gates or Bezos are increasingly finding private jets to be a great option for getting the job done. There are two big reasons why:

  1. Time. According to Craig Ross, founder of Aviation Portfolio, a private aviation advisory firm, you might save yourself four to five hours per flight by flying private—and that might shoot up to ten or 12 hours if you’re flying from airports that don’t offer direct flights to your destinations. That alone can make the numbers add up. “If you’re a businessperson who really values his or her time and simply doesn’t have enough of it, a private jet can be a smart move, financially,” he notes.
  • Competitiveness. Perhaps even more important than time and cost savings is private aviation’s ability to help you outgun the competition. You’re well-aware that if you’re not in front of your clients and prospects, someone else is. By getting in front of them more easily and frequently via private means, you remind them about your value and your commitment to them. That can, and does, make the difference in keeping a client from defecting to a competitor, or being the one to sign a prospect instead of the entrepreneur who stays put in his office and uses Skype.

GET THE EDGE: Commercial airlines are constantly cutting and eliminating routes as they use big data to analyze traffic—a trend that is causing business owners to forgo trips they normally would have made to keep tabs on employees, clients and prospects.

The upshot: Private jets can give you the edge of getting “face time” with the key people who help drive your success.

How to do it: One-offs or programs?

There are myriad ways to dip your toes into the private aviation waters (er, jet stream?), but there are two main methods for making the friendly skies even friendlier with jets:

  1. Ad hoc. Booking one private jet flight at a time, when needed, is the obvious route. This approach comes with the lowest possible commitment—when you want a private jet flight, book one. The big downside, however, is that the flight and service experiences can be wildly inconsistent each time. The quality of each aircraft and crew will vary. There are also lower service guarantees with an ad hoc approach. If there’s a problem with the aircraft or the itinerary, you may be out of luck in terms of getting boarded onto a replacement plane or getting a refund.

Warning: Booking private jet flights on your own can be surprisingly difficult. Ross notes that you (or your assistant) might spend an entire day or more trying to get booked on an available flight.

  • Programs. A more formal and organized approach is to join a program that requires you to pay money in advance for easier access. This might include owning a fractional share in a private jet along with many other people, being part of a fractional lease agreement or paying for a private jet club membership.

Why do a program?

  • Consistency. Each program or membership adheres to a particular level of service. You might get a certain type of aircraft each time you book, or only top-rated crews. If you have very particular needs and want to be sure they’re met each and every time, a program approach can help ensure that happens.
  • Certainty. Booking through a membership typically takes one phone call—no hunting around needed. And the club or arrangement usually ensures that there will be a “plan B” if something happens to knock your travel plans off course. This is helpful if you’re particularly risk-averse.

WATCH THOSE ASSUMPTIONS: Don’t assume being part of a private jet club is like joining Costco. You won’t necessarily pay less for your flights than you would by going the ad hoc route. Again, the consistency and ease of access are the main selling points of private jet programs.

Likewise, private aviation (as great as it can be) isn’t perfect, and you shouldn’t expect a flawless experience. The reason: The same forces that impact commercial air travel—bad weather, unscheduled maintenance, sick pilots and crew—can impact private jets. If the vice president of the country happens to be flying into your airport and that shuts down the airspace around it, you’ll be stuck no matter what type of aircraft you’ve chosen. “Don’t think that perfection is guaranteed with private aviation—you’re not 100 percent bulletproof just because you’re spending a lot of money,” says Ross.

Savvy tips: How to pick the right jet experience for you

The sheer number of private jet choices makes the evaluation process a daunting one. But if you’re thinking of spending thousands of dollars (or even tens of thousands of dollars) to fly in style, it’s vital to do your homework.

Ross says business owners should focus on three main areas when sizing up their options:

  1. Safety. Does the pilot have an Airline Transport Pilot (ATP) certificate, the highest level of aircraft pilot certificate? And how much experience does he or she have with the type of plane you’ll be flying in? Likewise, who owns and manages the aircraft, and what is their safety record?
  1. Service. What services are included in the flight contract, and do those options meet your needs and goals? Also, will you be offered a replacement aircraft or replacement crew if there’s an issue that grounds your flight?
  1. Value. Three private jet flights to the same destination might range in price from $15,000 to $35,000. The priciest of the three might be the best value if it meets your particular needs in terms of flight time, cabin size, features, the safety ratings of the operator and pilot, and other factors. Conversely, the lowest-cost option might do the trick. Assessing the value means first knowing what you want and need from a private jet experience. Are you simply trying to get from point A to point B in the timeliest manner? Or are you trying to “wine and dine” a top client?

WARNING: Don’t negotiate your flight entirely on cost. If you “beat up” a vendor on price, you probably won’t get the service, flexibility and fast response needed if your plans change or you need additional help or “hand holding” of any kind.

Getting the help you need

Navigating the private jet landscape successfully takes time, knowledge and persistence. To avoid turbulence, we don’t recommend taking a do-it-yourself approach. Instead, we recommend working with independent, fee-only aviation consultants—true professionals who don’t get commissions or kickbacks for recommending certain companies over others.

This report was prepared by, and is reprinted with permission from, VFO Inner Circle.  AES Nation, LLC is the creator and publisher of VFO Inner Circle reports.

Disclosure: The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS.

Fusion Wealth Management is not affiliated with Kestra IS or Kestra AS. https://www.kestrafinancial.com/disclosures

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