The New Math Of private Jets

- Sara Clemence

Owning your own plane has long been a badge of success—a time-saving security enhancer that offers privacy, efficiency, and access to the world on your terms. But lately, not all jet- setters are choosing to be jet-getters.

Travelers with extreme means increasingly take a portfolio approach to aviation. They’re mixing and matching fractional ownership, jet cards, charters, jet clubs, and other options— as well as trips on their own planes, if they have them—to get where they want to go. “No one of these is usually the perfect fit,” says Brendan MacMillan, chief investment officer at New York’s QP Family Offices, which sets up and manages offices for high-net-worth families around the world. A great solution, he says, “is having multiple arrows in the quiver.”

One reason the portfolio approach has become appealing is that ownership1 itself has become less so. “We’re seeing a tsunami of different issues that collectively make managing your own aircraft more difficult and costly,” says Ford von Weise, global head of aircraft finance for Citi Private Bank. Insurance costs have increased as much as 20 percent over the past year, says Stephen Johns, president of Michigan-based LL Johns Aviation Insurance. Meanwhile, the popularity of private planes (sales last year were up 5 percent) has pushed up the price of hangar space. Plus, the Federal Aviation Administration is requiring that all private aircraft begin carrying the Automatic Dependent Surveillance-Broadcast (ADS-B) tracking system by the end of 2019. The mandate “is pivotal for the next-generation traffic-control system,” von Weise says. It’s also expensive, he adds.