2 Misconceptions About Corporate Aircrafts & How They Can Save Your Company Money

Posted on: 26 September 2016

There are many misconceptions held by the public about corporate aircrafts, and as a business owner, you need to make sure those misconceptions don't prevent you from making a lucrative investment. Whether your employees and you travel long distances frequently or they need to but you have reduced their travel due to budget constraints, there are many reasons a company aircraft can truly be a wise business investment and not just a company "toy." Read to to learn the truth behind the biggest misconceptions about corporate aircraft and why you ought to consider aircraft sale services

1. It is Cheaper for Your Employees to Just Take Commercial Flights 

Prices of small aircrafts vary widely depending on the specific type of aircraft you purchase and whether you go with a pre-owned or brand new model, but you may be surprised when you look into corporate aircrafts and find some that are priced much lower than you expected. When you take that price, add in a little routine maintenance, and divide it by how many more years you plan to be in business, you may realize that the cost-per-year of that aircraft is comparable (or even less) than what your company currently spends each year on commercial flights for your employees.

However, when considering the value of a corporate aircraft, you need to add in another few factors:

  1. The cost of employee cab rides to and from the airport and/or airport parking. Whether your employees tend to choose either option, the cost of both can really add up.
  2.  The wasted time your employees spend waiting in airport security lines. When you own a corporate aircraft, your employees can begin to use the time they used to spend in long airport lines more effectively.
  3. The ability to hold meetings and perform other business tasks mid-flight. You may not have realized that those long hours your employees spend in the air on commercial flights are also time wasted compared to what they could be doing on a corporate aircraft. On a private aircraft, the privacy of the flight can truly be taken advantage of when it allows your employees to discuss even top-secret company information freely. 

 Also, don't forget that your aircraft and the cost of maintaining it are both business expenses that can help reduce your tax burden at the end of the fiscal year. 

2. You Must Choose Between Full Commercial Aircraft Ownership or Commercial Flights

Aside from full aircraft ownership, there are other ways to have access to a private aircraft for business use. Along with purchasing one outright or just chartering an aircraft when you need one, you could also invest in fractional ownership of an aircraft. You likely know that chartering an aircraft is similar to "renting" one for a flight. However, you may not have heard of fractional ownership. When you enter into a fractional ownership agreement with several other business owners, you each own a share of the aircraft, similar to how company shareholders hold shares in your business. These agreements can involve anywhere from two business owner who split the plane costs and its use 50/50 to eight business owners who each own 1/8 of the aircraft. You can take a look at a sample agreement and see what the typical contract looks like. 

Of course, the keys to making a fractional aircraft ownership work well is choosing the partners you invest in the aircraft with wisely and drafting an agreement that makes all co-owners happy. This can be an ideal arrangement for two business owners who each have a business busy season at different times of the year, but it can lead to headaches if one co-owner does end up using the aircraft much more than another while not covering any more of the expenses. 

Whether these other options are more affordable for your business depends on how many hours you plan to spend in the air each year. While chartering an aircraft is only cost-effective when flying occasionally, fractional ownership can be a good investment if you plan to log less than 240 hours of time in the air each year. However, at 240 hours and over, experts recommend owning your own aircraft. 

Don't let misconceptions about corporate aircraft keep you from making an investment that may be very lucrative for your company. Look into corporate aircrafts for sale to check out the current prices and consider if full ownership or fractional ownership with the right partners could end up making your business even more prosperous.