Second-hand jet market booms as rich pull plug on private flying
The market for second-hand private jets is booming as wealthy business people decide they can no longer afford owning their own aircraft.
The value of second-hand private jets available to purchase has doubled to $3.3bn from $1.6bn last year, according to Jet Republic, a newly launched company concentrating on fractional ownership of aircraft.
Jet Republic said sales of second-hand jets are up 90% on last year with as many as 211 on the market in Europe.
Jonathan Breeze, chief executive of Jet Republic said: “The ultra high net worth market has been affected by the current global financial crisis but many of those people with private jets are looking to sell them and switch to a fractional ownership model or jet card scheme."
He said that the average asking price for a used jet is currently just under $16m; and he estimates the total annual cost of running a jet for 200 hours a year is $3.5m per year.
He added: “A fractional business jet programme allows an organisation to free-up cash as buying or leasing a share in a Learjet 60XR is the most cost effective way of running a business jet. In many cases a business jet plays an essential part in enabling our clients to run their lives and businesses.”
Jet Republic said for private jet owners who use their aircraft less than 200 hours a year, the savings through a fractional programme are even greater.
The annual cost of fractional ownership is significantly lower than sole ownership of an aircraft for those flying for less than 650 hours a year.
Breeze said: “Typically a private jet is out of service for scheduled maintenance for around two months a year which is a significant inconvenience to an individual or organisation with a single aircraft. The same issue applies to those that require simultaneous use of an aircraft to different destinations. ”
Around 30% of enquiries received by Jet Republic have come from large corporations and governments, when it was only expecting around one in ten to be from this segment of the market. The remaining 70% has come from entrepreneurs, private individuals and families.
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