A new aircraft buyer faces mounting costs, limited layout options and a very long waiting time. A good quality pre-owned business jet can be purchased, reconfigured and refurbished at well under half the price, and ready to fly in a fraction of the time.
Business aviation is in higher demand today than it’s ever been. The Coronavirus has created challenges for commercial airlines, most notably: point-to-point flights . Nowadays, it’s very difficult to get a flight from your location to your required destination without multiple layovers and the associated transfers and delays. In the current state of affairs private aviation has never been more attractive by offering safety, convenience and efficiency for wealthy individuals. For those who’ve flown privately, it’s a truism to say that once you’ve tasted private aviation, you never want to go back.
Given that it’s unlikely there will be a quick return to the levels of point-to-point travel seen prior to the pandemic any time soon, the market has never been stronger for business jets than it is right now. Unfortunately, this means that a customer placing an order today for a new aircraft will have to wait, in many cases, at least two 2 years before they can begin to fly their new jet. For Airbus Corporate Jets (ACJ) and Boeing Business Jets (BBJ) the wait is much longer. When you’re buying an aircraft in this range, you buy a “green” aircraft. This isn’t just a metaphorical term, the jet is literally green – the colour of the primer and, not only that, the cabin is completely empty. So it’s up to you as the owner to put together a team of people to design the interior, then have an outfitter put this all together with a myriad of suppliers. On average, an aircraft like this will take about 3 years from signing the purchase agreement to actually taking delivery.
The current lead time to build and deliver a new aircraft is hard to digest for an owner, particularly in this age of instant gratification, where we’re used to buying online and receiving goods a few days later. Waiting 2-3 years for an aircraft would be unacceptable to most, particularly if you need a private jet to travel because of the current problems with commercial flight.
Aside from the lead time, when you buy a new aircraft, a buyer’s choice of layouts, features and finishes is limited to what the manufacturer offers in their portfolio of options. In many cases, wanting a custom layout or a unique feature just isn’t possible. Manufacturers are unable to provide this level of customisation as their production simply isn’t that flexible.
To see what this can mean for you, let’s look at the interior of two large aircraft, on the left is a Bombardier Global 6000 and on the right is a Gulfstream 650ER:
At first glance, they seem different – an expert eye would be able to identify them. However, the big tell here is the windows: the Gulfstream’s large round windows are unmistakeable. Although, if you remove the windows from the images, the differences become quite superficial:
In fact, it’s really quite difficult to tell without the distinctive windows. This demonstrates that the aircraft themselves – from a floorplan perspective – are often very similar.
From a manufacturer’s outlook, this similarity is useful: OEM’s need to limit options. This makes the product more affordable, while making it easier and quicker to build and therefore maximising profit margins. So, the new owner gets a new plane with an interior selected from an OEM catalogue. This includes the latest technologies, systems and finishes that they’ve chosen from the catalogue with a choice from selected available floorplan offerings.
This is, therefore, why OEM’s prefer not to individualise aircraft beyond the catalogue options. When making these requests, you’ll be listened to attentively, you’ll hear replies like “yes, that’s a wonderful idea” and then you’ll receive an eye-wateringly huge bill for seemingly small changes. This means they don’t have to refuse your requests outright, it just becomes an unjustifiable cost from the buyer’s perspective.
For example, a recent issue came about with a gentleman who was buying a new large-cabin jet and wanted his personal seat to be slightly wider than the standard for comfort. He was told it wouldn’t be a problem, until the cost of installing the custom seat came in at $780,000 – it’s very debatable whether a single chair should cost that much but, regardless, he didn’t go with the purchase.
Even without custom requests, the list price for these types of aircraft: a Global, Gulfstream or a Falcon, range from 50-75 million dollars. Not only that, soon after you sign the purchase agreement, escalation starts. This cost is tied to inflation and, put simply, means that the price of the aircraft goes up if the manufacturer’s costs go up. This could result in the final price being significantly higher than expected.
To summarise: when buying a new aircraft, the key issues you’ll face as a potential owner are:
- Limited interior layout options and finishes
- Waiting time
However, all these issues can be alleviated through purchasing a pre-owned aircraft.
Firstly, the most obvious benefit is the reduced cost. A good quality pre-owned business jet can be purchased, reconfigured and refurbished at well under half the price of a new build aircraft, while being ready to fly in a fraction of the time. Much like cars, aircraft depreciate quickly initially but, when you buy a pre-owned jet, the aircraft’s depreciation curve is significantly flattened, which is likely to please your accountant.
However, pre-owned aircraft offer much more potential than this.
Let us assume that a buyer has retained a professional adviser to identify the best type of aircraft that meets their needs. This will include range and performance, the number of passengers and the expected on-board service. The right aircraft will have an excellent pedigree that means that maintenance is up-to-date, the original outfitting has been done reasonably well, the flight deck is well-equipped and it’s been well cared for.
As such, it has now been selected by the owner, but this is where the opportunity comes into play:
A pre-owned aircraft can be reconfigured, updated and refurbished to meet a new owner’s particular needs and expectations, something that the OEM would not do. The level of customisation is entirely up to you – it’s not necessary to make a radical departure from the existing layout. You may even wish to acquire that aircraft and keep the current layout. You may, on the other hand, decide you just want to change the material finishes. However, you may want to have different leathers, or a new carpet, or you’d like different veneers or maybe even a carbon fibre finish. But, there’s also the opportunity to do something different, to completely redesign the interior to your very own requirements and sense of style.
As an example, let’s look at the seating:
An OEM will generally maximise the number of seats in several standard configurations – usually offering more than ten 16G TTOL (taxi, take-off and landing) seats in their aircraft, which aren’t necessarily the most comfortable seat for a long journey. So, if most of these aircraft fly with between four and five people on board, shouldn’t the cabin be designed for the real number of passengers that you’re going to be carrying? These compromises shouldn’t be necessary.
People like to move about and stretch, they like to work, to collaborate, dine, relax and sleep. So, instead of putting 16G seats in all the available seating positions, the plan could be opened up a little. With more flexibility, cabins can be designed for comfort and productivity: providing passenger spaces for working, for privacy and to sleep comfortably. As a solution, it’s been well-received: designing the cabin around carrying six people comfortably on a long-range flight. If necessary, the cabin can be laid out to accommodate a few additional people on those rare occasions when an owner simply needs to take a few more people on the trip.
Pre-owned ACJ and BBJ aircraft offer incredible value. These aircraft were designed to fly 120,000+ hours in short haul airline service. They’re designed to be abused and are easily maintained. Maintaining these aircraft is, in fact, significantly less expensive than maintaining a Gulfstream, Global or large-cabin Falcon. A bizliner that has been flown privately for 15 years would have the equivalent of less than 2 years of airline service – it’s still a young airplane. These are perfect aircraft for the owner seeking a spacious cabin that is unique and displays their personality and their needs. There’s room here for a generous lounge, a private bedroom with a real, large bed with an ensuite bathroom and even a shower. Or perhaps a private office that converts into a guest bedroom.
This means that acquiring a pre-owned ACJ or BBJ offers a unique opportunity to fully customize the cabin. Ideally, an aircraft with good pedigree and a cabin layout that broadly reflects what the owner is seeking is a good starting point. Then, with a professional completion manager and a top designer, the cabin can be designed to exactly meet the owner’s needs – private and professional, and wrap that all up in their own sense of style.
To learn more about the benefits of a pre-owned aircraft wait for part 2 of this article series or simply request a personal meeting with us at: email@example.com