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Private Jets
Convenience
and Safety Keeps Private Jets Soaring
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By Laurie Burstein
With corporate accountability, safety and security issues, and budget
concerns being big topics in air travel today, more companies are
re-thinking the costs and benefits of using private planes. A relatively
new concept involving partial aircraft ownership, as well as chartering
a plane, are two viable alternatives to owning a corporate jet.
An
interior shot of an AERO CHARTER jet. |
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By buying shares in an aircraft company called NetJets, Inc. corporate
executives can fly for business without a lot of the headaches and
time hang-ups involved in commercial travel and avoid the high costs
of owning and maintaining a company plane, says Donn Seidholz, vice
president of sales.
“If you figure out what a CEO’s time is worth and then figure the
time he or she would spend on a commercial flight waiting in the
airport, connecting to other flights if needed, and perhaps having
to drive an hour or two to a meeting, then having the access to
a private plane is certainly worth the cost.”
NetJets’ partial ownership plan lets companies that don’t have the
need or resources to own a plane, purchase shares for a minimum
of 50 hours of private flight time. Companies then avoid costs associated
with pilots’ salaries and fuel, not to mention flight scheduling
and many other costs and logistical problems. NetJets, Inc. started
this concept in 1986 and today it is the largest operator of private
jets and the leader in “fractional aircraft ownership.”
Seidholz gives an idea of how NetJets’ partial ownership plan works.
For example, a best selling plane today is an Encore, costing $7.8
million plus fuel, pilots and maintenance. To buy 1/8 of a share
on NetJets for 100 hours for the Encore, which seats seven people,
costs $975,000 for the 100 hours, a monthly management fee of $9,900,
and $1,390 per hour.
While this sounds high, Seidholz says this costs less than flying
seven executives commercially for 100 hours. NetJets can have flights
ready in four to six hours from the time a client calls, and avoids
the long waits at commercial airports. Plus, with NetJets there
are tax advantages including deducting the management fee as well
as a 95 percent depreciation cost. Additionally, CEOs can travel
with a team and work on the plane. To prove that this is a growing
trend, Seidholz says the latest research shows that the current
4,000 fractional private jet owners will increase to 9,000 fractional
owners in the next five years.
“If
you figure out what a CEO’s time is worth and then
figure the time he or she would spend on a commercial
flight waiting in the airport, connecting to other
flights if needed, and perhaps having to drive an
hour or two to a meeting, then having the access to
a private plane is certainly worth the cost.”
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Donn
Seidholz
vice president of sales,
NetJets, Inc.
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NetJets has served the St. Louis market for seven years and has
seen demand for its services expand here as well as all over the
country. NetJets is a division of Berkshire Hathaway, run by the
famed Warren Buffett.
Chartering a flight is another good option for many companies. St.
Louis-based Aero Charter launched its service here in 1978 and is
still flying today. Located at Spirit of St. Louis Airport, its
founder and CEO Robert Thomas, says his customers appreciate the
flexibility, convenience and safety of chartering a private jet
for business. The company has 37 employees, 14 pilots, and a full
range of corporate jets, turbo-prop and twin-engine charter aircraft
ready to go on just 11/2 hours notice.
“Private planes are a great business tool for today’s companies,”
Thomas comments. “The image used to be that only the wealthy chartered
planes. We have seen a change in the last 10 years or so, now chartering
a flight is more accessible and affordable for many types of businesses,”
Thomas says. He adds that business is currently very strong even
in a slower economy.
Thomas agrees with Seidholz on the issue of the cost of a busy CEO’s
time. “If a CEO has a lot of places to cover, he needs to move around
quickly. By chartering a flight, we are accessible to 14,000 airports
around the country by some type of aircraft as compared to the maybe
500 served by commercial carriers.”
Thomas also notes that one of the biggest changes he has seen in
his 33 years of flying is a big improvement in safety. “The safety
and reliability of equipment on charter flights is so much better
today. Technology has really allowed us to make this a very safe
way to travel.”
In addition to providing charter service, another key service of
Aero Charter is corporate aircraft acquisition and management services.
Aero Charter assists companies with all the responsibilities associated
with buying and managing a private plane. The company also is a
carrier for medical transplant teams and often flies organs around
the country. Aero Charter has a maintenance department as well and
offers installation and repair work for other corporate jets. Lastly,
the company has a travel agency where it books commercial flights.
With more corporate executives chartering flights or buying into
fractional jet ownership, the sky is the limit.
Laurie Burstein is a St. Louis-based free-lance writer.
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