5 takeaways from Sherpa Report’s April 2019 article on “Buying A Jet For Charter Revenue”

Like all professionals in the private aircraft management sector, we like to stay on top of industry issues and practices.  As a result, we regularly troll trade publications and industry experts to stay up to date and enhance our knowledge base.  Today we wanted to highlight a recent article from Sherpa Report that we thought offered pragmatic advice on the aspects of buying a jet to generate charter revenue.

You can find the entire article at https://sherpareport.com/aircraft/jet-charter-revenue.html

We thought our blog readers might be interested in 5 key takeaways from the article that resonated with us and reflect our own experience in this category. Here they are:

  1. Source information can make or break your financial projections.You need a management company that can estimate fixed and direct costs accurately.Choose a company that can help guide you on the numbers specific to an aircraft you are considering. The bottom line is that unless you plan against a specific aircraft type or types, estimates based on average numbers simply may not give you as clear a picture as you need.
  2. Narrow down your aircraft type based on need. Consider in detail the planned use of the aircraft and choose appropriate aircraft for the mission. Your aircraft management provider may be able to recommend suitable aircraft based on their experience.  Develop your financial plans around a specific aircraft choice so that you’ll have a more accurate understanding of the costs to own and operate it before you commit.
  3. Know the history of the aircraft before you buy. The Sherpa Report article very correctly suggests that you know the actual tail number or serial number of the aircraft and where it is in its life cycle. We know first hand how this will lead you to the information and answers you need to make a knowledgeable decision.
  4. Choose an aircraft management company with experience and knowledge in both regulations and maintenance.As the article points out,the aviation industry is very regulated, so if your aircraft is not properly maintained, it is not allowed to fly” which could put you out of business. Quality of maintenance is critical and can have a serious impact on how often your aircraft is serviceable to fly which directly impacts revenue and expenditures.
  5. Map out your financial plan before you commit. An excellent suggestion is to create a detailed plan by graphing annual projected aircraft flying hours and expenses over time, and then overlaying that graph with estimated revenue from charter sales. Do three versions: best case, worst case and expected results. You need to be able to operate within any of these scenarios should you choose to go forward.

This article was a good read and we think helpful to both novice and experienced private aviation businesses who are developing a business plan.

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