The average cost of a private jet depends on some key variables - especially where you're going, what aircraft you want to fly in, who is flying with you, and when you want to get there.
For instance, a short hop from Boston to Bangor, Maine - about 30 minutes - would likely only cost $2,500 in a small plane. Yet if you were flying in a plush, customized, mid-sized private jet from Boston to Cleveland (about a 90-minute flight) you're likely to pay more than $30,000 for the ride.
Of course, it also depends on whether you want to buy or simply lease a private jet as you go.
What's the best solution when paying for a private jet? Read on and see which factors come into play so you can make the right decision before you get airborne - one way or another.
The Average Cost of Buying a Private Jet
Buying a private jet is an expensive and comprehensive undertaking.
The variables involved tend to mount up when you're mulling over a private jet acquisition. Chief among them is the make and model of the plane, the age of the aircraft, and the extra features and creature comforts you're willing to pay for when buying a private jet.
Then there's the cost of maintaining and operating a private jet aircraft, which can add significantly (that could mean several million dollars annually) to the cost of owning a private jet.
With that as a backdrop, figure on the cost of a brand-new private jet purchase to have an exceedingly wide range from $3 million to $90 million, depending on the type of jet involved.
The cost of a new private jet or even a second-hand aircraft depends on the following key factors:
How Often Will You Fly the Aircraft?
Industry insiders say that unless you plan on flying 150 or 200 hours annually, it's not worth it to buy the jet. Anything less and the money you'll pay for the purchase and maintenance of the aircraft is money you'll never get back - even if you can resell the jet down the road.
Know That You'll Likely Only Own the Plane for 4 or 5 YearsAviation industry data shows that the average private plane purchaser will flip his or her plane every four to five years. That means having to buy a new plane, if you want to keep your owner status within five years of buying an existing one. That adds more to the long-term cost of private plane ownership - even if you sell your old plane for a profit - and should be factored into your total cost.
Should You Buy New or Used? That's an easy call if your budget is limited but you still want to buy a private plane. Take
Gulfstream's G450 aircraft, for example. That's a fine aircraft that will set you back by $40 million or so, depending on features, if you buy it new.
But if you buy a secondhand model, that price goes down to as low as $15 million for a bare-bones model - saving you a bundle of cash in the process, while still getting a decent plane.
The Average Cost to Charter a Private Jet
Your other airborne option is to go the lease route and charter a private jet.
Once again, the price will vary dependent on your budget, your needs, how many people you're flying, and what planes are available in your area that works within your schedule.
There are some price guidelines, however.
For example, a turboprop plane (think a Piper Aztec) can get you from Los Angeles to Las Vegas for the weekend might cost you $3,000 or so. A light jet (think a Cessna Citation Mustang) costs more for the same flight - about $4,000 to $5,000. Overall, expect to pay an average of $4,000 for a light jet or turboprop for a flight of three hours or so.
Like buying your own jet, leasing one has its advantages and disadvantages.
After all, by leasing and not buying a private jet you're losing some good leverage. With ownership comes privileges and you'll need to factor those issues and benefits into the lease versus buy equation
Again, How Often Will You Fly the Aircraft? If you've got deep pockets - really deep pockets - and you fly more than 200 hours annually, owning your own jet makes more sense. Yet if you're a relatively infrequent flier, and you fly less than that per year, leasing becomes a budgetary issue. Why waste money buying a plane when you won't use it on a regular basis?
If You Don't Want the Hassle of Ownership If you're an on-demand flier who doesn't want to shell out hard-earned cash for an upfront purchase for a private jet, and you don't want to deal with a plane's maintenance, crew and other operational issues, leasing a jet is the way to go.
You're Not Stuck With a Single Aircraft Option Air travel charter companies offer all kinds of private jets for lease, with varying size, performance standards, price, and amenities. With most charter companies, you'll even get a helicopter option too, if that suits you best (for shorter flights.) If you own your own jet, you don't have those options and you'll fly the aircraft you own, or you may not fly at all.
On the downside, leasing a private jet has some turbulence, too - especially in terms of flexibility, timing and price.
You Don't Call the Shots When you charter a plane, you may not get the exact flight time you want. That could mean something significant if you need to be in Boston on Monday and back in Cleveland on Tuesday. You're at the mercy of what the charter has available and there's no guarantee that it will fit your schedule.
Landing in Specific Airports Can Be a ProblemFor a variety of reasons, including time, staffing and general ownership issues, some charters may not fly into the city or airport you need to be in over the next 24 hours. Inconsistency with charter jet companies is a common complaint among frequent charter lease customers, so you'll have to spend extra time scheduling the exact flight you need with the exact company that provides it.
Prices Can Fluctuate Wildly Depending on the private jet lease you need and the private jet leases that are available, you may wind up paying much more than you thought to get where you want to go. As a jet leasing consumer, you really are at the mercy of what's available and when. Often, around weeks and holidays especially, those leased jets become much more expensive for fliers who may have to dig deep to get home for the holidays.
How to Buy a Private Jet
Your best bet in buying your own private jet is to hire an aircraft management company to do the heavy lifting for you.
An aircraft management company can help you come up with a realistic budget and help you find a private jet that meets your unique needs. One move you can make on your own is to leverage an aircraft cost calculator, which can help you select the right plane, calculate its operating costs and get you a financing plan and pricing numbers (find a good aircraft cost calculator here.)
Once you and your management company have found the right plane at the right price, and have established maintenance and operation costs, make sure to insist on a pre-purchase inspection (again, this should be handled by your aircraft management representative.)
Once you get down to the number, bring an aviation broker (your management company may have one on hand or could recommend a broker to you.) Your broker will get you the best price for the aircraft and represent your overall financial interest in closing the deal down, including getting you the best financing deal.
Expect to pay between 2% and 5% of the total cost of the private jet for a professional aviation broker.
How to Lease a Private Jet
Usually, when you lease a private jet, you're either doing so on a one-off basis (which can be more expensive) or buying a chunk of time that's reserved for your flying needs in the future.
For the latter, private jet leases usually start at 50 hour packages and increase by 20-hour increments. You can opt to pay for a package deal, pay cash upfront, or finance the entire deal on your own (your private jet company can help you with the financing.)
No matter what you do, plan-wise, expect to pay 25% down upfront for the flight or the flight package, and the rest before you get on the aircraft.
Total costs will include the down payment, the monthly jet lease fee (if you're buying into a full-time leasing plan), a jet management fee (which covers operations and maintenance costs), the actual private jet fee (often billed as an hourly fee), and any ancillary fees like ground transportation, state and local taxes, and any luxuries that weren't included in the original deal, like additional luggage or fuel fees.)
The Takeaway on the Cost of a Private Jet
Remember, there is no "one size fits all" answer to either buying or leasing a private jet.
Do your calculations and your due diligence, ask others who have gone through the experience for tips, and get a professional aviation broker or consultant involved to smooth out the process.
Do that, and you'll be flying the friendly skies in no time, as a private jet customer, with all the benefits that entails.
It's never too late - or too early - to plan and invest for the retirement you deserve. Get more information and a free trial subscription to TheStreet's Retirement Daily to learn more about saving for and living in retirement. Got questions about money, retirement and/or investments? Email Robert.Powell@TheStreet.com.