The Real Cost of Owning a Business Jet

Last year we looked at the Real Cost of Owning an Airplane to see how much it costs to own at a single-engine, Cessna 172. Since writing this article, my aviation interests have expanded considerably, my curiosity has skyrocketed and I’m eager to understand how much it costs corporate flight departments to own and maintain a business jet.

I’m going to try to stick with my original five-part agenda—initial purchase price; maintenance and operating costs; insurance; parking; and upgrades/add-ons. But as we shall see, owning a business jet, doesn’t quite match up in all the categories. I’ll explain more on that later.

Let’s start with the easy one. I found that business jet prices range from $3 million to $90 million, though one source says that about 85 percent of business jet owners buy second-hand aircraft. As Steve Varsano founder of the luxury private aircraft company of The Jet Business, says, “If you're not flying your airplane 150 to 200 hours a year, you really shouldn't buy one. You should just rent one.”

Depending on your budget, age or size of the aircraft you need and more – the initial purchase price can vary tremendously. It’s also important to note that most owners switch jets every four to five years, much like car owners.

There’s also a significant variance among the many business jets out there so for this article, I decided to use the Gulfstream 450, more commonly known as the G450. With Honeywell’s Primus Epic cockpit, APU, weather radar, air and thermal management, navigation and radio and other available upgrades, you can see why this aircraft peaks my interest. Here’s an idea of what it costs to own a business jet.

Purchase Price

A new G450 can cost anywhere between $38 and $43 million brand new, depending on the upgrades you add at the time of purchase. On the other hand, a pre-owned model will typically cost you anywhere in the $14 million to $35 million range. A significant variance, depending on the flight hours, upgrades and features that are on the aircraft.

1. Maintenance & Operating Costs

With the Skyhawk all we had to worry about were fuel, oil, engine reserves and landing fees. But now we have crew salaries and benefits including a flight attendant. And once you’re flying with an aircraft of this size, a lot of other fixed and variable costs come into play such as APU allowance, navigation chart service, computer maintenance and catering, to mention just a few. Let’s not get bogged down in details and just say that our total cost of ownership per year, for a Gulfstream G450 is roughly $4 million. This is based on 423 hours of usage per year. This does not include insurance or parking which I’ve broken out separately to go along with my Cessna 172 analysis.

2. Insurance(s)

Let’s figure hull insurance at $34,520 and “single limit liability” at $12,500 for a rounded total of $47,000. However, it’s important to note that insurance can increase based on several factors not limited to average flight hours, age of the aircraft and more. And, as the jet gets bigger and carry a higher payload, you can almost count on a larger premium.

3. Hangar vs tie down

Well, clearly you’re not going to leave our multi-million dollar investment out in the rain — or, here in Arizona, in the sun—so we can count on a hangar fee of around $81,000 per year. If you want to park your plane at a large, international airport, such as Los Angeles International Airport (LAX), you may pay closer to $160,000 a year or $12,000 a month.

4. Upgrades/Add-ons

The amount of upgrades offered in the aerospace industry are almost limitless with options to change out almost every product on your plane. Considering Honeywell’s extensive portfolio of next-generation technology, we can add satellite communications, in-flight connectivity solutions such as JetWave, a cabin management and entertainment system like Honeywell Ovation Select cabin management system, the SmartView synthetic vision system and more.

And although they’re not ‘aesthetic’ upgrades that you and your passengers will get excited about, it’s important to count the equipment you’ll need to cover the ADS-B Out, FANS 1/A and other mandate requirements that are coming up before the Dec. 31, 2019 deadline.

For the Skyhawk we allowed $5,000/ year. But for our Gulfstream and other business aircraft alike, Andre Fodor of Avbuyer.com suggests it could be different every year depending on how you fly. After all, we haven’t covered the cost of paint, furnishing your aircraft and other cabin-related upgrades that will make our transatlantic flights that much more comfortable. To be conservative, let’s budget $100,000 to $500,000 a year to cover upgrades.

All told, you can figure an initial purchase price from $14 to 43 million and annual costs of $4,628,000.

As you can see, there are several options for those fortunate enough to purchase an aircraft of this caliber. Whether you purchase new or used is clearly a matter of personal preference and budgetary constraints. For more information on owning an aircraft please visit faa.gov.