Jetgala - FALL-WINTER 2022

45 B U Y I N G A P R I V A T E J E T O wning a private jet is ideal for UHNWI as it provides the ultimate in transportation freedom and mobility. However, there are other considerations, such as how the asset will be managed and how owners will handle the financial and other ramifications of ownership. Private and business aviation is a very complex and heavily regulated industry. Funding aside, there are operational, tax and jurisdictional consequences to consider; along with the operational costs and technology upgrades that are a vital to successfully managing and maintaining a highly sophisticated aircraft. Most people will require financing for a private jet. Expect to pay a rate of between 4 per cent for a jet costing above $20 million and 7 per cent and 8.25 per cent for a purchase of $4-15 million. Smaller purchases ($1 million or lower) fall into the ‘prime plus’ category that has a rate of 9.25 per cent. Standard loan terms are 5, 7, or 10 years.The loan amortisation can be as short as eight years or as long as 25 years, and is determined by the aircraft’s age and flight hours. It pays to check first with your private bank; not only does the private bank have knowledge of your financial position, the rates they offer may be extremely competitive. Crew salaries can range from US$60,000 to $150,000 per pilot, and recurrent training can cost anywhere from $30,000 to $100,000 each year. In addition, there are other additional costs such as a professional crewing team, accountants, and human resources. Other yearly fees are insurance (US$30,000 or more), hangar rental (US$25,000 to $80,000), and a variety of other fixed costs including refurbishing, navigation chart services, computer maintenance and avionics maintenance. Jet owners can expect to pay US$300,000 to $1 million annually for maintenance. Work with Professionals Just like with real estate, it pays to work with experts when buying a private jet. Aviation specialists help in identifying the right aircraft for an individual’s needs; they can explain tax ramifications, contracts, and technical subjects related to acquiring a private aircraft. An aircraft can’t fly unless it bears its nationality and registration marks. For an aircraft to fly in Singapore, it will need to be registered under the Singapore Register, an ICAO Contracting State, or another State that has an air service agreement with Singapore. The registration number or ‘N’ number on the tail also provides valuable information about an aircraft and its title. Singapore registration owners also need to apply for these permits as well: Certificate of Registration, Certificate of Airworthiness, Permit to Fly, Maintenance, Repair & Overhaul and Noise Certificate. Buyers will also be hit with about 12 per cent tax on the purchase, depending on the country. It All Adds Up Fuel accounts for one of the largest costs of owning a private jet, so prospective buyers will want to look closely at fuel efficiency when considering an aircraft. For example, a Heavy Jet with a fuel capacity of 50,000 pounds would cost between $500,000 and $1,000,000 annually to fuel depending on usage and the price of Jet1-A, the light kerosene that jets burn. In the final analysis, a personal jet offers the ultimate in travel freedom but it does come at a spectacularly high cost. If you are in the market for a private bird then it pays to check with the experts to make sure you don’t get your feathers plucked.