Runway Guide: Aircraft Leasing
April 18, 2022
The concept of a lease is comfortable for most people. Most lease agreements typically exchange access to vehicles or facilities for an agreed-upon recurring or monthly payment. A private jet lease works much of the same way. For those who are interested in eventual private jet ownership, private jet leasing can be a great way to preview the experience.
There is no one-size-fits-all approach to private travel. But is leasing right for you? What are some benefits or attractive features of leasing? Transparency and trust are crucial in selecting the solution that is ultimately curating your private travel experience.
It’s also important to prioritize defining your needs in this space, as it will be key in identifying the commitment that is right for you. Let’s examine the concept itself and a few reasons why aircraft leasing remains an incredibly popular mode of private jet access in 2022.
How is Aircraft Leasing Different from Fractional Jet Ownership?
Fractional ownership is best described as the experience of whole jet ownership without the hassles of crewing and maintenance for the aircraft. But for those who wish to go without the upfront costs of owning an asset, including the depreciation risks, leasing can prove a savvy choice.
Within fractional ownership, you buy a fraction of a plane and are allowed a fixed amount of hours per year and thus charged a monthly management fee, an hourly charge for usage and an hourly fuel surcharge. In some sense, it’s like the ultimate jet timeshare or an exclusive jet membership. A standard deposit then rounds out your total financial commitment.
While every provider is different, leasing only requires an initial capital outlay that falls somewhere between fractional ownership and jet card. Additionally, jet leases are an attractive option for corporate flight departments because they qualify as a ‘travel expense’ rather than an owned ‘asset’. If cost control and schedule flexibility are important needs of yours then a private jet lease may be right for you.
How Does Leasing a Private Jet Work?
Most private jet leasing programs are typically designed for travelers who fly 50 or more hours per year and provides access to multiple aircraft types and sizes. The lease model can be advantageous because it minimizes your exposure to market demands and increases safety, reliability, and availability thresholds while offering a less capital-intensive solution to outright ownership.
Leasing with certain providers will grant you with guaranteed access to aircraft, highly experienced pilots, and most importantly predictable costs.
Below we outline all cost components and benefits of a typical private jet lease program.
Cost Components of a Typical Lease or Access Model:
- Security Deposit: A fully refundable deposit upfront based on aircraft and allocation of hours.
- Monthly Lease Payment: A fixed-rate amount based on aircraft and annual flight hours allocation.
- Monthly Management Fee: Covers the indirect costs of operating an aircraft, including pilot training, insurance, crew provisions, cabin support, and administrative costs.
- Hourly Rate: Charged for each hour an aircraft is in-flight, plus approximately 12 minutes of taxi time. This rate also includes direct costs associated with maintenance, standard catering, engine costs, and pilot fees.
- Fuel Component Adjustment: Added to the base hourly rate to account for fluctuations in the cost of fuel, which varies monthly.
Benefits of a Typical Jet Lease:
- Incremental Purchasing Power: Add 25-hour blocks of flight time to accommodate changes to your travel needs, or, purchase hours from fellow Owners.
- Aircraft Flexibility: Choose from seven unique aircraft to accommodate your range and passenger needs.
- Flexible Contract Commitments: A minimum 30-month term up to a maximum term of 60 months.
- Short Call Out Time: As a leaseholder, book a flight with as little as 10 hours** advanced notice.
If you’re ready to explore the best that private aviation has to offer, Flexjet’s private aviation experts can provide you with everything you need to make a truly informed decision, from jet card programs, to leases and fractional ownership. We look forward to building a relationship with you, one that is dedicated to ensuring exclusive, personalized service, and a truly world-class experience.
**Please keep in mind, private jet leasing is currently experiencing record high-demand. Aspects like schedule flexibility, call-out time and aircraft selection may be limited in spots. Inventory may also be limited. Otherwise, leasing a jet share affords you the benefits, travel experiences and service standards Flexjet has to offer.