Purchasing a private aircraft can be a significant investment for corporations seeking to enhance their business accessibility and efficiency. However, corporations and their boards don’t always know very much about the complex world of aircraft acquisition. Here are the five biggest mistakes to avoid.
- Neglecting Comprehensive Needs Assessment
Sometimes corporations let want supersede need when pursuing an aircraft acquisition. Instead, corporations need to take a methodical approach and conduct a thorough needs assessment before acquiring a private aircraft. It’s crucial to understand the specific business requirements that drive the decision to buy an aircraft. Neglecting this step can result in purchasing an aircraft that doesn’t align with the organization’s actual operational needs and budget. To avoid this mistake, carefully consider the purpose of the aircraft. What will its mission be?
- Overlooking Operating Costs
Sometimes the idea and enthusiasm related to owning a private business jet can cause some details to be overlooked. This is a sophisticated, technical purchase that comes with a range of operating costs that include maintenance, crew salaries, insurance, fuel, hangar fees, and much more. Underestimating or overlooking these ongoing expenses can strain a corporation’s finances. Firms should have industry experts help them to create a comprehensive budget that considers the mission of the aircraft and all operational costs to establish a well thought out financial plan that the corporation can afford.
- Buying Beyond Budget
The money issue is so common that it warrants additional comment in addition to point 2! Sometimes an overzealous CEO can fall in love with a state-of-the-art, luxurious private jet and buy an aircraft that ultimately exceeds what the company can or should afford. really important not to let one individual drive the final decision. Create a team who has been briefed on corporate needs and budgets with sound financial overseers. Be realistic about the budget even if it means sacrificing some amenities or features for the sake of fiscal responsibility.
- Neglecting Regulatory Compliance
The aviation industry is heavily regulated, and corporations must adhere to myriad rules and standards. This is the domain of professional aircraft management firms and corporations should rely on them to ensure compliance. Failing to understand and comply with these regulations can lead to enormous legal issues, fines, and operational disruptions. A professional aircraft management team will keep companies out of trouble.
- Lack of Proper Due Diligence
If done properly, the purchase process of a business jet can’t be rushed. There are no shortcuts. Corporations need a dedicated team to liaise with the manufacturer or, if purchasing a used product, with the seller. It is critical to thoroughly research the history of the aircraft, including maintenance records, accident history, and ownership history. A failure to uncover hidden issues can lead to expensive surprises down the road.
Suffice to say that purchasing a private aircraft is a significant acquisition that can make a company more efficient and accessible to customers around the world. Doing it correctly is as important as running any business effectively and profitably.