Should You Purchase or Lease a Private Jet?

A “BEYOND THE PORTFOLIO” SERIES FOR HNWIs

"Merely considering private aviation as just a means of transportation is entirely mistaken. Approaching ownership or leasing will change your lifestyle, enhance your quality of travel, and make it much more convenient than you think. Boringly, it gets you from A to B; however, it should deliver choice and control. Not only do you have the benefit of flying on your timetable, but you will also have (for the intelligent owner) privacy in flying and handling your aircraft. The ultimate convenience has to be ownership of your plane. When you own it, you are the customer; you call the shots wherever you are.

Customizing your interior, having the latest in in-flight tech, or just knowing your jet is available at a moment's notice is all part of the personal service that is part and parcel of the ownership experience. Best of all, of course, is that it is instantly available whenever you desire it. This is not your small Citation Mustang but your Bombardier Global Express. The importance of perfectly coiffured hair always aids discussion when cruising at 47,000 feet.

The investment is high, from an initial $3 million for the smallest turboprops to more than $75 million for a Challenger 605 or its larger brother, the G650. And that is not the end, as there will be annual expenses for maintenance, storage, insurance, and crew salaries. Depending on how you use your jet, or even whether you use it, there may be potential for tax relief for business use, or you may consider chartering out your jet if you are flying only sporadically.

More importantly, jets are depreciating assets depending on how frequently you fly. My old VLJ depreciated by around 15 percent yearly, so we lost around $5 million in the first five years of ownership. Leasing allows you to dream of private aviation without the burden of ownership. Depending on how often you fly, you might lease your jet if you prefer more flexibility. If you're a traveler who helps plow the furrow of business, owning your plane might not make sense when you fly only a few times a year. However, getting precisely what you want regarding aircraft customization may only sometimes be possible, and you may miss out on your jet being available at peak travel times. You may also have to pay more than you budgeted if you fly more than expected due to annual hourly rates and fuel surcharges.

There are two approaches to private aviation: you can buy or lease. Buying makes better sense if you fly more than 200 hours yearly, at least eight to ten hours a month. However, emphasize to your silver-haired interior designer from 'Below Deck' that they must beautifully coiffure your hair on the descent into London!

The charter market is vast, and productivity has gone through the roof. Who is to say that you won't become a jet port—the traveler that helps to open up a new market—by being the first to pioneer a new route or destination, not have a family of three, and end up with a $50 million jet all to yourselves?"

It is about living that lifestyle.’ So, whether you are buying or leasing a jet, an essential consideration for those looking to take the next step in private aviation is the purchase or lease decision being an extension of your lifestyle. Private aviation represents power, success, freedom, and financial independence. At DWAM, we believe in standing with you, hand in hand, as you make these important decisions. We act as the stewards of your wealth as we guide you through the financial complexities of above-the-crypto altitudes. And your long-term wealth goals will be at the front of our thinking. To access additional insights on luxury investments, please follow our exclusive series Beyond the Portfolio, where we educate and update high-, ultra-high- and multi-millionaire investors on exclusive purchasing and financial decision-making that pertain directly to their portfolios. By better understanding the trade-offs of each option, you’ll be empowered to decide whether leasing or owning a jet fits your lifestyle and investment portfolio.

Disclaimer: The content provided in this article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or lease any aircraft. Private aviation ownership or leasing involves substantial financial risks, including depreciation, maintenance, insurance, storage, and operating costs. Additionally, tax benefits related to private aviation may vary based on individual circumstances and applicable laws, which are subject to change. Potential buyers and lessees should seek the advice of qualified financial, legal, and tax advisors to evaluate the suitability of private aviation as part of their overall economic and investment strategy.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of Duncan Williams Asset Management (DWAM). Past performance is not indicative of future results, and all investments carry the risk of loss. This article is not intended as an offer or solicitation to buy or sell securities or other financial instruments. DWAM does not guarantee the information's accuracy, completeness, or timeliness.

Investors should conduct their own research and due diligence before making any financial decisions related to private aviation or other luxury investments. Please consult a qualified professional for personalized advice tailored to your financial situation.

Duncan Williams Asset Management is an SEC-registered investment adviser. SEC registration does not constitute an endorsement of Duncan Williams Asset Management by the SEC, nor does it indicate that Duncan Williams Asset Management has attained a particular level of skill or ability. Advisory services are only offered to clients or prospective clients where Duncan Williams Asset Management and its representatives are properly licensed or exempt from licensure. Duncan Williams Asset Management may render advice only if a client service agreement exists.

‍