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Three things to consider when purchasing a business aircraft.


Few endeavors involve as much capital and forethought as procuring an aircraft for your business. It’s an enormous decision and one that shouldn’t be embarked upon without taking stock of all that it entails.

First, let’s look at the strategic advantages of owning an aircraft. Make no mistake — the benefits are many, but they can be boiled down to three main categories: time, privacy and security.

Time.
When you own your own aircraft, you’ve purchased a large reserve of time that you can spend focusing on your business. You can now go from one location to another without the hassle of commercial flying and all that it entails — TSA, boarding lines, baggage, flight schedules, cancellations, etc. Owning an aircraft turns 30 minutes of flight time into an hour of total travel time, instead of what could be three hours with commercial airlines. It also makes business meetings while traveling possible.

Privacy.
If you’ve ever tried to hold a meeting on a commercial flight, you know it’s virtually impossible. Not only is it cramped, but there is no lack of prying eyes and curious ears that can compromise a strategic conversation. Owning an aircraft brings a level of confidentiality that may make meetings in the air your most preferred conference room.

Security.
Finally, personal security is maximized because you have ultimate control of passengers, pilots and crew. Plus, when traveling internationally, you have the ability to fly more directly to your location and depart quickly should the need arise.

Other things for consideration.

How will you use it?
There are over 30 private aircraft models available in today’s market, but in each passenger and distance class, there are only a handful of models to choose from. Therefore, it’s critical to have a firm grasp on how you intend to use your aircraft, the distance you will most consistently fly, and how many passengers you will need to take with you.

Are you prepared for the overall cost?
Whether it be pilots, fuel, maintenance (scheduled or unplanned), hangarage, insurance or landing fees, the actual purchase of an aircraft is not the most expensive part of owning it.

Buying vs. financing?
While you may have the capital available to buy your plane outright, financing can often be a better option because financing rates on aircraft are typically favorable. It’s also a single asset that typically has a longer life cycle than other business assets. You might be better off putting that cash to work where it can earn a return that’s greater than the interest rate.

Finally, there are many detailed steps to purchasing an aircraft. Purchasers must know what they’re getting into and be familiar with all that the FAA requires for owning, operating, leasing, financing, buying and selling an aircraft.

If all of this information has you thinking about where to start, ask your bank. Many banks are able to finance your aircraft purchase, but few treat it as the specialty it is. Commerce Bank has a dedicated aviation lending team with over 25 years of experience helping our clients. We can help with financing, but can also help connect you with industry specialists who understand the unique challenges associated with an acquisition like this, such as aircraft manufacturing sales teams, brokers and dealers, management companies, insurance brokers, and aviation tax and legal counsel. There are also consultants that can provide insight into utilization and determine if fractional or charter utilization is right as an alternative or supplement to your aircraft. Building a team is important to ensuring a good aircraft owning experience and we are here to help.

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