Sunday, August 24, 2008

The actual costs of private jet travel

Janet and I were at a fancy-schmancy Park Ave. auction awhile back and we overheard a woman declare in a condescending voice:

“Nobody travels commercial anymore”

Well, this lady did not look like the billionaire class, but at the same time, I know that many executives are fed-up with commercial air travel, and are moving to shared-jet companies like DayJets, a great new service where the cost of the ride depends directly upon your flexibility.

As of 2009, the real costs of a private jet (for one person) are aboput 50x higher than flying coach, and about 6x more than first class. For example, these rough costs, RT, LAX to Frankfurt:

- Coach on commercial air - about $1,200
- First Class commercial - about $12,000
- Private jet rental - about $80,000

So, for a private jet that holds 8 passengers, renting a private jet is cheaper than riding first class, and much nicer, no TSA . . .

Also, the trend is towards smaller commercial point-to-point jets these days. It's sad that Neyjects and Dayjets went out of business, but in the next decade, expect to see more small, point-to-point jets, small jets, not behemoths:

So, how rich does a person have to be to own a private jet? Some zillionaires have amazing aircraft for pleasure, even for extreme water skiing:

I did some investigation and I was surprised to find a huge variance in the costs of private jets:

- A brand-new Gulfstream 5 costs $59,000,000
- A used Learjet can be had for under $600,000
- A used commercial jet can be had for under $10m

The 2010 Gulfstream 5 – only $59m

Affordable private jets?

On the low end, I was surprised to see than some old Learjet’s were very affordable, like this on for only $650,000. That may sound like a lot of money, but considering that a nice home in Manhattan is over a million dollars, it’s a great bargain.

And this, a Boeing 727 for only $2.5m! For course, it costs over $100,000 for a fill-up, so the cost of the jet is about equal to 25 fill-ups!

Just like when buying a horse, the purchase cost is a tiny part of the investment. You need $100k a year for a pilot, and fill-ups can easily top $10k.

I was impressed to hear that the Google whiz kids, Brin & Page, have their own private 767, a huge jet:

But I was shocked to see that a 767 can be had for only $15m, less than one-third the cost of a new G5.

I’ve been a licensed private pilot for over 30 years, and while it may be tempting to have a private jet, I think I’ll stick to commercial air travel.