A friend showed me some numbers yesterday for two options he was considering. One was 75 hours on Netjets, the other was buying a Citation X and having a local group manage, charter, etc and he use it about 100 hours a year.

The costs for both were absolutely staggering. I had never seen an op cost for an X, worked out to his 100 hours would cost him ~1mm a year, and that assumes it flies another 400 without him onboard. Crew salaries, reserves, etc were all much higher than I would have guessed.

Then you look at Netjets - the prices appear to be almost double what I remember looking at pre-Covid. They were trying to sell him on a Praetor - I was surprised to learn that didn't seat 8 in their config. So you pay 1.3mm (I think that was the number) for 75 hours and you can't take 2 families.

Made me really appreciate the economics on my plane!

Why a Citation X?

For double club two pilot jets, it's cheap to buy, apparently charters well, has a lot of pilots and has a big cabin. My buddy has chartered one a few times and loves the plan. I don't blame him - they look so cool

The Citation X has low acquisition costs, but high operating costs, relative to other super midsize jets.

A former operator I worked for used $950/hr as a ballpark maintenance cost. You slow down to save fuel? Each 0.1 hour you slow to save gas costs $95, so depending on fuel price, slowing down wasn't the best option.

There is also a spar corrosion issue that is affecting a number of that type.

It also breaks a lot. "Fastest plane between service centers"

It broke twice the amount of the Challenger 300 I flew (on a fleet basis).

Did your buddy see what the Challenger 350 costs were from NJA? That should be 8-10 pax (I don't know if NJ has the couch or a half club). The couch option (6 club seats, 3 person couch) seats 9, plus one of the lav if you aren't going far and your operator is cool with it.

The flat floor 6'1" cabin of a Challenger is much better experience than the dropped center aisle layout of the Citation X.

You should to a similar analysis on PlaneSense and their PC12 / PC24 offering. I'd be curious what you think of that one. I'm guessing you'd say, "that's better, but still.... wow"

All of these management and frac companies are in business to make money. Set the pilots aside for a minute and look at all of the other people who need to be paid to make it all work and then add on the expectation of ROI.

When my dad was running the flight department at Champion Spark Plug in the 80's this guy came in pitching this idea of fractional ownership looking for investment from the Stranahans. My dad sat in on the meeting. After, Mr. Stranahan asked him what he thought. He said it was the dumbest idea he'd ever heard. That guy was Rich Santulli.

I think it is hard for "us"* to see the value in a plane ownership situation where you just stroke a check, pick up the phone, and get flown somewhere, but, eventually, it did become profitable.

I also think the value of the anonymity of frac can't be understated.

*"us" in quotes because I'm not in the same league as you are when it comes to ownership. But we both enjoy "managing" our airplanes.

I flew a X for about 900 hours in a charter operation about 10 years ago, times have certainly changed since then. At that time $2 gas on contract was the norm and Pilot salaries were much lower; the pane chartered for about $4.8k per hour. The airplane I flew was a good airplane, rarely broke, but that was many thousands of airframe hours ago. The corrosion wasn’t an issue then, but I would be concerned now.

Keep one thing in mind too, NJ doesn’t “charge” for empty legs, but the cost of live legs is VERY high - more than double a charter rate in the open market. I now have occasion to fly a Phenom 300 on charter and the rate is $4,600 per hour plus $ 1000 per day for the crew. Last time I looked that Phenom from NJ was over $10k per live hour, $15k per month management fee, and you bought the airplane for list plus. It’s not an inexpensive way to own, but the availability is great.

If I were your friend I’d find a local charter operator that I trusted with a Challenger 300/Legacy 500/ G280, and a Phenom 300 or CJ3/4 in their fleet. He will save $$, have access to light and super mid airframes when needed, pay less when it’s one or two people, and not have the headaches of ownership.

Brad

Just out of curiosity, do you have any references on the spar corrosion issue?

They have a reputation for being maintenance pigs.

Older ones were cheap prior to COVID for this reason.

I have a two club two pilot jet. I don't spend anywhere near the amounts discussed here.

Mike C.

Coast to coast, it is hard to beat the X. We do the round trip ~9.5 hours and burn ~2300 gallons total. NetJets found (created) many of the maintenance problems, so the issues are well known. These planes don't get to 20K hours (800 hours a year) by being maintenance pigs.

If you are a pilot, own a plane and actively manage it, NetJets or charter management companies prices seem ridiculous and are roughly 2.5x.

Just out of curiosity, do you have any references on the spar corrosion issue?

They have a reputation for being maintenance pigs.

Older ones were cheap prior to COVID for this reason.

I have a two club two pilot jet. I don't spend anywhere near the amounts discussed here.

Mike C.

Sal, I believe they're referring to two sets of club seating....Eight seats

Thanks!

Caldwell's Theory of Relativity" states that all economic analyses are relative to wealth level.

What seems like sound economics to you is laughable to others and brings incredulity in others. Of course you already know this.

I find our airplanes expense not worth a lot of thought. And since I have someone managing now of no real difficulty to operate. But when it can't fly because of a red master warning light (like last week) or because I need to go somewhere when it's in the shop for an inspection, I think how nice it would be to have a guarantee I could.

But if I started trying to compare charter service for all the expenses I see on my aircraft's income and expense statement, and added in the likely depreciation expense and the real cost of capital, I suspect charter in some form equal to my plane's capability isn't far off. But I have a commitment to a partner for a couple of years so the thought's not worth having.

Most mangement companies are not so good

Better to hire a pilot who can also manage it, pay him more, and you’ll end up paying less and getting more as a owner

If you need to be able to 135 it, I’d probably just use netjets and not buy a plane, it’s like buying a car you can’t afford and planning to use it as a Uber to make the car payments, on paper yeah, in practice…