For companies with many business travelers, a business jet may be something to consider. The costs for frequent commercial travel can add up quickly, making owning or chartering a jet worth the expense. Having a business jet can give any company convenience and added productivity, as well as the benefit of possible tax deductions for certain expenses of business flights.
What Are the Costs of Owning a Business Aircraft?
There are several important things to consider regarding the corporate travel costs of owning a business aircraft, and there’s more to it than just the original purchase price — although that’s an important consideration too. Here are the main costs involved in owning aircraft for your business:
- Purchase price: The initial cost of buying a private aircraft can vary wildly and will depend on the size and type of aircraft you choose, and whether you buy new or used.
- Maintenance: Ensuring your aircraft is properly maintained at all times is absolutely crucial for safety. It’s important to budget for regular maintenance and any needed repairs.
- Operating costs: Operating costs may include the salaries, training, and travel costs of a flight crew, airport scheduling fees, and subscriptions for navigation data, among other additional features.
- Hangar fees: When you’re not in the air, you’ll need a safe place to store your aircraft. A simple parking space with a tie-down is an option, but a hangar will better protect your investment from the elements. The hangar storage fees will vary depending on the location and size of the airport. Larger, international airports will have more expensive storage than smaller, regional airports.
- Insurance: Insurance costs will also vary depending on the size, age, and type of aircraft, as well as average flight hours. But this can be a significant annual expense to budget for.
- Miscellaneous: There’s an almost endless variety of upgrades and add-ons for any corporate aircraft, including high-tech options, aesthetic and comfort-based upgrades like decor, furniture, communications, and connectivity. This category can also include any additional services, comfort items, as well as food and beverage items for the flights.
What Are the Costs of Chartering a Jet for Business Travel?
Another option for corporate travel is chartering a jet. With charter flights, you don’t own the aircraft and don’t need to worry about individual costs for all of the extras that come along with owning a jet. Most charter flights charge a per-hour fee for flight airtime. Generally, you aren’t charged for on-the-ground time for your trip.
The hourly rates for chartering a private jet can vary according to the size and type of aircraft you choose, the size of the flight crew, the distance flown, and the cost of fuel at the time. The cost will also include some additional fees and taxes. It’s important to remember that the charter flight costs are all-inclusive and already factor in all of the separate costs that you’d be responsible for if you owned your own private aircraft.
Benefits of Private Flights for Business Travel
Private jet travel for business offers many benefits, including:
- Convenience: What could be more convenient than avoiding all the hassles of standing in line at an airport and waiting in the terminal? With a private jet, you can be on board and on your way within minutes. Travel where you need to go without worrying about over-booked flights or commercial flight schedules.
- Productivity: On your own private aircraft, it’s easier to maintain productivity, and you can even work from the jet and hold meetings with colleagues in the air. There’s far less downtime for you and your team, as you can keep working from the comfort of your private plane.
- Privacy: Private jets are quiet and distraction-free. Plus, your team can discuss proprietary company information without worry that you’re being overheard by other passengers.
- Saved time: Your time is valuable and you won’t have to waste it arriving early for flights, waiting at baggage claim, or losing precious work time while you’re in the air.
How to Analyze Your Company’s Travel Expenses
It’s a good idea to conduct a business travel assessment to understand your company’s business travel expenses as it can help you determine the best modes of travel for future use. You’ll want to note what modes of travel your company uses, who uses corporate travel and how much, when travel is most frequent, as well as the overall costs, including any extras like overnight hotel stays.
For your business expense management, be sure to analyze all of the data to compare the expenses and the benefits of certain types of travel for your company. Take into consideration how your needs may change in the upcoming years, either with larger teams or more or less travel.
Is Business Travel By Private Jet Tax Deductible?
When considering business travel costs, you’ll want to think about taxes. And while you may see private jet travel as a business expense, in terms of tax deductions, it’s not always that simple. Determining if your business aircraft costs are tax-deductible can depend on a number of factors.
To count as a tax-deductible business expense, travel must be normal and necessary to your business in the eyes of the IRS. And because private aircraft travel is seen as a luxury, sometimes it can be difficult to justify the expense for your taxes.
For example, if you’re using your jet for business purposes, only transporting employees and clients, and traveling to locations not easily served by other modes of transportation — including commercial travel — you’ll have better luck claiming tax deductions. However, allowing family members and guests to fly with you and traveling to locations easily reached by commercial airlines or by car can make it more difficult for you to claim those tax deductions.
Should You Own or Charter a Jet for Business Travel?
Choosing between owning and chartering a jet can come down to what’s best for you and your company. There are benefits and drawbacks to each situation, so it’s best to understand your needs when making this decision. When you own your own jet, you have the convenience of constant availability and flexibility in your travel plans, but you are solely responsible for all associated costs.
If you go with a charter company, you may have a wider variety of aircraft to choose from for different purposes, and all of the details will be taken care of for you. Just be sure to work with a distinguished charter company that has excellent safety ratings.
Contact Latitude 33 About Private Jet Sales and Charter Flights
Ready to take the next step? Whether you want to buy, sell or charter a private business jet, Latitude 33 can help. Contact our experienced team today and we can assist you in finding the right business jet solutions for your company. We can be your trusted partner throughout any aircraft transaction, offering acquisition and brokerage services as well. Get in touch today to get started.