Q&A for Citywealth magazine – Private Aviation feature
Thursday 30 June 2016
Edward Leigh, Senior Manager – Aviation catches up with Citywealth magazine about the latest trends in the aviation sector.
Do UHNW individuals still buy jets or is chartering taking over purchases?
Yes - UHNW individuals continue to buy aircraft particularly those who use their aircraft for 250+ hours per annum. Below this figure, chartering or fractional ownership is more popular.
There seems to be an explosion of jet chartering apps. Do UHNWIs really use them or is it just a gimmick?
Like Uber, apps such as Victor, Ubair and JetSmarter have certainly disrupted the air charter market and will no doubt continue to grow. Despite the availability of this technology, there will always be a need for a good aircraft charter broker.
On the other hand, some US-based startups, inspired by the likes of Uber and Airbnb, offer an all-you-can-fly private jet service for a fixed fee, i.e. Surf Air or Ultimate Air Shuttle. Do you see this as a growing trend? Do we have a similar market in Europe?
These companies give UHNW individuals more choice and this sector is undoubtedly set to grow and expand into Europe. There are certain compromises such as the routes available, the aircraft type and the flights may be shared with other members hence the flights are not truly private.
Floyd Mayweather is reported to have bought his second jet this week. How many private jets do your clients have on average?
For an individual, it is quite unusual to have two aircraft. The majority of our private clients have one aircraft and they would lease or charter another aircraft when required. However, our corporate clients typically have several aircraft in in their fleet at any one time.
How much money do your UHNW clients spend on a jet?
This is dependent upon several factors such as number of passengers, the operating area and budget. Many of our clients opt for mid to large size aircraft and spend anywhere between $15m to $80m.
What features do they require?
This varies from owner to owner. Key considerations for owners are performance, range, fuel efficiency and operating costs.
What trends do you see in the private jet sector?
Private aviation in Europe has become increasingly onerous. With the recent introduction of Part NCC and the Union Customs Code, owners will have to seek specialist VAT advice to set up the most suitable ownership structure for their aircraft.
Similarly, the movement of aircraft into and out of the EU has become more complicated and costly for owners. Some service providers involved in customs operations are applying for Authorised Economic Operator status to make this process much more efficient for clients. Equiom is proud to be the first Corporate Service Provider in the Isle of Man to achieve Authorised Economic Operator status.
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