Many business jet owners plan to hire out their aircraft to help offset operating costs, but how could this impact their plans for financing? AvBuyer's Gerrard Cowan speaks to the experts to learn more.
Aircraft are not cheap. They cost a lot of money even when they’re not in use, notes Roman Pavlicek, Chief Financial Officer of Czech Republic-based ABS Jets, which offers a wide range of aircraft management and chartering services to clients in Europe and beyond.
“There are always fixed costs to be paid whether the aircraft is in active operation or not. These include costs such as basic maintenance, crew payroll, training, insurance, parking, various systems subscriptions, and more,” he says.
The chartering decision is based partly on the aircraft owner’s personal plans (how often they expect to use the aircraft themselves for leisure or business purposes, and if this could conflict with chartering plans and terms), and whether they’re happy for other people to use their aircraft given the potential for additional wear-and-tear.
There are also technical questions to consider, Pavlicek adds, such as the aircraft age and flight hours, the aircraft’s operational reliability, maintenance demands, and so on. “All of this could lead to higher or lower chartering intentions,” he says.
In general, the finance provider will mainly focus on safe cashflow related to the aircraft, Pavlicek adds. It is up to the individual user to establish if they need to finance the aircraft.
This article was originally published by AvBuyer on July 17, 2023.
