One of the great things about being rich is that you can travel the world as you like – a mix of the pointy-end of commercial airlines out of Australia and private jets everywhere else.
Flying private would have come in handy on a recent family holiday to Bora Bora which took us four flights and 16 hours, leaving me wondering if it was all worth the effort. It was, but life's so much better when you enjoy car-to-plane access, don't have to handle your own luggage, can skip security checks along the way and enjoy a friendly wave goodbye from fixed-base operation staff after you've declared to curiously deferential customs officers that, no, you're not carrying a firearm or too much money.
There's a lot of upside, but it can be expensive. Yet Australian businesses and individuals are increasingly deciding that private is the only way to fly.
Growth in corporate aircraft here is up 40 per cent compared to 2007, before the global financial crisis, says one industry estimate.
Jet owners can get a little back on their investments if they're willing to let jet operators charter them out during their down time. Quentin Jones
One of the people responsible for this growth in private and corporate aviation is a man accustomed to high speeds. Five-times world motorcycle Grand Prix champion Mick Doohan set up his own jet management outfit after being disappointed with local operations when he brought his plane back to Australia after retiring from the racetrack in Europe.
"I thought I could do better myself so, a few mistakes later … Global Jet International (GJI) will be 10 next year," Doohan says.
GJI manages and offers hangerage for corporate or private jets owned individually or in syndicates. It also organises charter flights for those who need the flexibility to go wherever, whenever they need to.
Outside of corporate ownership, typical global jet owners are 63.6 years old, with an average net worth of $US1.66 billion (A$2.3 billion) and an average liquidity of $US195.5 million, according to research firm Wealth-X.
They are overwhelmingly male (96.8 per cent) and self-made (75.1 per cent). Of global jet owners, 16.9 per cent became rich through a blend of inherited and self-made wealth, and 8 per cent inherited everything they have.
If you'd like to be part of this league, consider that jet owners allocate about 1 per cent of their net worth on private aircraft, spending an average of $US16.4 million per plane.
Which isn't much, really, when one considers the cost of a new Global 6000 would set you back more like $US62 million, or (my preference) the Gulfstream 650, $US74 million.
Not that you have to buy new – and most Australian buyers don't, perhaps understandably given the state of the Aussie dollar.
With the price depreciation of these things being fairly steep in the first five years, one could reasonably expect to pick up a bargain on the pre-owned market.
Doohan says a 2005 G550 would set you back around $US28 million, a 2008 Global XRS (6000) $US25-$30 million depending on its hours and condition, while a 2009 Challenger 605 today (the new version of which would sell for $30 million) would cost around A$13-$15 million.
Jet owners can get a little back on their investments if they're willing to let operators such as jet managers ExecuJet and GJI charter them out during their down time. And there are times when even jet owners have to charter extra planes to get all their people around.
Chartering might be a more palatable option for many, with prices ranging from A$2500 per occupied flight hour for a small Learjet up to A$12,000 per hour for large-bodied planes such as a Global 6000.
It's unclear which segment – sales or charter – is larger.
"Some start out chartering and they end up buying an aircraft for the group," Doohan says. The big-bodied, longer-range aircraft are more popular in this country just because of the sheer distances here. To get to Perth from Brisbane during winter could take six hours.
But the annual costs of running these things can be breathtaking.
At the top end of the corporate spectrum, say a Gulfstream 550, Doohan says you're looking at $2 million a year, breaking down to $US3800 per flight hour (assuming 400 hours a year) and including fuel ($US2000 an hour), maintenance ($US700 per hour) and catering and landing charges.
On top of that comes costs for pilots ($US250,000), hangerage ($US80,000-$110,000) and insurance.
Doohan says safety isn't an issue with the pre-owned jets.
"And I don't say that lightly. The aircraft have to be maintained … to the same specs as your Airbus A380, but those things are flying a lot more."
On average, a corporate aircraft flies about 400 hours a year compared to a 747 which does about 400 hours every month.
Despite the costs, there are good reasons why growing numbers of corporations are buying into their use.
Ease of access to hard-to-get-to areas (think Bora Bora) is the main one, but also on a schedule that suits the company or individual. And if meetings run over, the plane will never leave without its passengers.
You've also got to take into account what an executive's time is worth – or a team of executives. Take Ramsay Health Care chief executive Chris Rex, for example, named by the Australian Council of Superannuation Investors recently as Australia's highest paid chief executive with an annual salary of about $30 million.
Ramsay would be saving money if it invested in a jet rather than letting Rex fly, say, 600 hours a year on a commercial jet when taking into account time wasted in terminals and missed days because of unavailable flights or delays.
"[Viewed against] what his time's worth – or that or of any highly paid executive and executive team – corporate aviation well and truly pays for itself," says Doohan.
It also allows teams to visit multiple sites in a day instead of what could take a week on commercial airliners.
"And if you've got eight people on a corporate aircraft, that really is productive talking time," Doohan adds.
So jets are often used as a flying boardroom.
"It's harder on a commercial airliner to sit down and discuss business or the meeting you just had. So, while you're flying, you're also getting work done rather than just sitting there and taking in the inflight entertainment."
And if they can do that and include the odd serve of celebratory champagne and caviar in the mix, it'd be like heading for a holiday to Bora Bora every time.
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