speaking of eclipses.....

[svcta]

An aquaintance is interested in buying an eclipse(in a partnership, I think). He's got $$, so my question is this:

Why wouldn't he consider netjets and be able to have a more capable a/c for similar investment?

I know it's a broad question, and I've got a few ideas of my own, but would like to get more opinions before I help him spend this kind of money.

So far my short list of things to weigh is:

1. How many people do you want to carry?
2. What kind of places do you want to go?
3. How badly do you want to get there?
4. What is your operating budget?
5. Do you want to have the same crew all the time?

This would be this guy's very first time with airplanes. So I think it would be a little wise to get the feet wet with a year or two of netjets or something like that. Thoughts?

Thanks.

 

[AerroMatt]

Why not NetJets?

"Why wouldn't he consider netjets and be able to have a more capable a/c for similar investment?"

An excellent question. I'm no expert, but IMHO this goes into the ego part of the equation. Wanting total control over the investment may play as big a part as the novice jet owner believing he can keep costs lower than NetJets management fees.

"So far my short list of things to weigh is:

1. How many people do you want to carry?"

The question might be better phrased as, "How far do you need to carry 'X' number of people?"

"2. What kind of places do you want to go?"

Do you mean like, into the Alaskan bush vs. the Vegas Strip?

"3. How badly do you want to get there?"

Better phrased: How fast do you want to get there?

"4. What is your operating budget?"

Perfect

"5. Do you want to have the same crew all the time?"

Maybe: How hard are you planning on working the flight crew?

"This would be this guy's very first time with airplanes. So I think it would be a little wise to get the feet wet with a year or two of netjets or something like that. Thoughts?"

I agree 100%. However, the Ego thing I mentioned earlier might prevent this sensible suggestion from being followed. Best thing to do would be to ask him directly why he wishes his own airplane vs a NetJets fraction. Thinking about it further, NetJets' 2 year initial contract requirement might be something he doesn't like either. Once again, I'm mind reading here.

Good luck to you. Maybe it'll prove to be a lucrative consultation for you.

Just my 2 cents.

 

[svcta]

I appreciate the insight......I'm not sure he really knows what netjets can offer him yet. Also, the "ego" precisely why I've tried to break things down in to a short list of questions.

From a technical standpoint I just don't think the performance of the eclipse would hold up to a partnership when considering what you can get in to a Hawker for with netjets. The capabilities are very different.

 

[GVFlyer]

Choosing the Eclipse may just be his cheapest option if he wants to fly very much.

The least expensive option from NetJets is the "Hawker" 400XP. For a half share the 400XP costs $325,000,000 with a monthly management fee of $46,560 and a charge of $1,554 per occupied hour.

GV

 

[BoilerUP]

A half share of a Beechjet costs $325M?

 

[willNOTfly4free]

I have found that fractional ownership can be a wise investment for the short term. With a management fee of $46,000/month and an hourly fee for a/c useage, your friend can justify buying a Beechjet (or similiar a/c) if he intends to utilize it for any long length of time. Normal a/c managment fees for a wholly owner BE400 are only a fraction of that stated above. Not to mention paying only the direct costs when operating it and the ability to place the a/c on a charter certificate to generate some revenue. There are many aircraft management companies available that can help your friend select the right aircraft for his needs.

BTW: What's wrong with having the same crew all the time?

 

[svcta]

Nothing wrong with the same crew all the time....it's what I do, actually! Some people really like that, to others it doesn't matter so much.

It just seems to me that a mil. and a half for such a weak performing aircraft is a bit much.

 

[caseyd]

200 Hours of Netjets Hawker 400XP cost as follows:

Interest only on $1,625,000 aquistion is $9417/month or $568,740 over five years.
1000 cccupied hour fees of $1554 total $1,544,000.
60 monthly mangement fees of $23,280 total $1,396,800.

Add it all up ($3,519,540) and divide it by 1000 looks like $3519.54 per hour. Yikes!! AND ya still owe the bank $1.6 on a share worth no more than $1.0M cause she's been rode hard and put away wet for five years. So add another $600 an hour to pay the bank. Double Yikes. Buffett didn't make it to number two fer nothing.

You can charter the thing for $2000. I don't know where his break even will be with charter but I bet it's south of 1000 hours. I don't know if he needs more than 200 hours. I don't know if he has the interest in creating a department (the highest quality / lowest cost solution). If he just wants to hop 300 miles once a month all by himself then VLJ's might work. For myself, I don't think ANYONE who can afford something else and has experienced even the meager comfort of a CJ1 is gonna ride those things more than twice.

good luck

caseyd

 

[GVFlyer]

A half share of a Beechjet costs $325M?

Pesky commas and periods and zeros and stuff. You knew what I meant. Good thing, too, cause I sure didn't write it.

That's what I get for early get-up, long day, wine assisted posting. Does $3,250,000 for a 1/2 share sound better?

GV