Things you need to know before buying a private jet

Olga Tcacenco
Olga Tcacenco
Director, Trust and Corporate Administration
Things you need to know before buying a private jet

Buying a jet is different from purchasing a car, real estate or any other type of assets. You are entering a very specific, highly complex and regulated area. Thus, educating yourself and seeking guidance is essential to make it a pleasant experience rather than a stressful and disappointing one.

Where do I start?

As future aircraft owner, you would need to start identifying the type of aircraft that suits your needs. You will have to consider why do you need or want a jet, your future destinations, number of cabin seats you would like to have, how many hours your aircraft will fly annually as well as the budget for both purchase of the aircraft and its operation. You also need to consider whether to buy a brand-new aircraft or a used one. Typically, the market price depreciation is about 5 to 10% per year, so a 5 to 10-year-old aircraft costs about 40-50% of the price of a new one, which could be a great value. On the other hand, maintenance costs of a used aircraft could be higher, and you will miss on manufacturer’s warranties and other benefits of a brand-new jet.

What is the process of buying an aircraft?

Depending on the aircraft, the sale and purchase process might take 2-3 months in case of the used aircraft and from 3 to 12 months for a brand-new aircraft, which will be build, customised and delivered according to your wishes. The acquisition process is rather complex, and you will need to engage a team of specialists, such as aviation lawyers, technical advisors, escrow agents, etc. The matters to consider include, among others, regulation, tax, insurance, risk management, potential finance as well as aircraft management and operation.

How do I structure the ownership of my new jet?

Before signing the Aircraft Purchase Agreement, it is important to ensure that you have a correct ownership structure in place. To mitigate your personal liability and for number of other reasons, it is advisable to establish a company providing for limited liability, which will purchase and own the aircraft. Several matters should be considered at this stage, including your fiscal residence, the aircraft’s future base, flight destinations and frequency, aircraft registration, etc.

Who will operate my jet?

Operation of the aircraft is usually delegated to professional operators or management companies. According to the regulations, the operator is responsible for entire operation, including safety. Choosing the right operator is essential, as this will determine your entire flight experience, the operational cost efficiency and may even impact the re-value of your aircraft. It may allow condition the availability of aircraft financing.

How do I ensure that my jet retains its maximum value?

To keep the value of your jet at its highest, you will need to ensure systematic technical oversight, quality aircraft and engine maintenance programs, regulatory upgrades, appropriate hangarage and tight monitoring of the aircraft operation. 

KENDRISfly team of aviation, tax and legal experts can support you on each stage of the process, including selection and sourcing of the aircraft, sale-purchase transaction management, setting up the appropriate ownership structure, selection and supervision of the operator and value retention of your aircraft. Our unique one-stop shop approach will allow you to enjoy your private jet with peace of mind.