Find a good adviser is the top advice from Rohit Kapur, JetHQ, President Asia, for people considering their first business jet purchase.
“The pandemic has got a lot of fence-sitters taking notice of private aviation,” Kapur told the forum Concept & First Time Buyers. “The pandemic will work positively for our industry and I’m optimistic about where it will take us. There is a new generation of people who are getting wise to the idea that business jets are a great way of saving time and boosting productivity.”
But making informed decisions – particularly as a first-time buyer – required professional advice, said Kapur. “I normally say: hire me but I won’t say that here.” While potential investors are “very smart people”, having made millions or billions of dollars, it’s still possible to make “silly decisions” without the support of good advice, he added.
His other top two tips were: prefer newer models when buying pre-owned and become fully familiar with the operational costs. “If you want a super-medium [model], as opposed to a newer mid-size, go for the newer one,” Kapur advised.
For first time buyers, pre-owned is probably the way to go. “We don’t see many new concept buyers looking at new aircraft. It’s scary to realise you’re spending a lot of money on a new aircraft and then realise you’ve made the wrong decision.”
Sales in the sub $5m category
Kapur noted many sales in the sub $5m category, with buyers considering Hawkers, Citations, Phenoms and some Learjets. “The whole pre-owned market is a good place to get great deals.”
His final advice was to study the operational costs of the prospective purchase. “Get to know the costs well,” he advised. “It’s not just the buying costs, it’s the operating costs too.” Strong communication in the pre-purchase period was a key means of avoiding unpleasant surprises – possibly in the form of an unexpected $2m maintenance bill later.
Unexpected $2m maintenance bill
“The more we can communicate [with prospective buyers] the better. People need to know what they are getting into in terms of operating costs, regulatory issues and hiring pilots.” Kapur detected a shift away from the situation five years ago where wealthy corporate individuals bought a business jet, often after an IPO, to make a style statement. “Right now, it is small and medium-sized companies. They are buying because they feel it’s important to travel safely and securely and people buying out of need rather than to make a style statement.”
Fellow panellist David Dixon, President of Jetcraft Asia, President, chose three related pieces of advice to pass on to first-time purchasers. First plan your exit route, by not over-personalising the aircraft, which could hinder its later sale, he said. Second, understand what you are buying in terms of the technical capabilities of the aircraft. Third, understand the costs and seek professional management.
How to buy a business jet – at a glance
Rohit Kapur, JetHQ
1. Find a good adviser
2. Prefer newer models
3. Study operational costs.
David Dixon, Jetcraft Asia
1. Don’t over-personalise your aircraft, which may impede a later sale
2. Understand the aircraft’s technical capabiliites
3. Know the costs and seek professional management.