Business aircraft can be a valuable business tool. Making the right aircraft choice depends on having data that is comparable and appropriate to the mission assigned to the aircraft. Selecting the right aircraft and the right operating options will provide a positive experience that demonstrates the true value of the aircraft as a business tool.

Where do you begin?

Clearly define what is expected of the aircraft. This can be as simple as four passengers nonstop from point A to point B.  From there other criteria can be developed to define the operational parameters for the aircraft. 

It is important to understand that aircraft are compromises. With increased capabilities come increased costs. No one aircraft can do it all.  So it is critical to get advice early on as to what is capable and what is not regarding an aircraft. Here are a few things to keep in mind:

The acquisition cost is but a small part of the overall cost of owning and operating an aircraft. Fuel, maintenance, crew costs, training, hangar, parking, and insurance are all needed before the aircraft first takes off. These can run into the hundreds of thousands of dollars per year. Maintenance costs are highly cyclical, and if not planned for, can present significant surprises. 

Market depreciation is real and is a cost, not an income.  From time to time aircraft values do increase, but that is a temporary aberration.  Aircraft are complex mechanical devices. While the maintenance required does keep the aircraft value from decreasing rapidly, over time the value of the aircraft will decline. As one example, a large business jet that sold for $25 million new in 1991 today is worth about $8 million. To replace that same aircraft with it's current production counterpart will cost over $35 million. 

You need to have a plan. A well-designed aircraft acquisition plan will show that the recommended aircraft, with modifications or upgrades and the associated acquisition and implementation schedule is the lowest cost alternative capable of accomplishing the assigned mission. To accomplish this, an aircraft acquisition plan must:

     • Identify and quantify the real transportation needs

     • Differentiate between "must have" and "nice to have" requirements.

     • Identify the aircraft best able to meet the technical requirements.

     • Balance acquisition cost with operating costs for the greatest benefit with the least investment.

In formulating the plan it is important to remember that the aircraft acquisition process takes time.  Once an aircraft is in the service, it will probably stay there for five to ten years. This places a premium in the planning process.

As we go forward, I plan to touch on these and other high-level subjects involved in owning a business aircraft.