Business Owner Blog: Flying too Close to the Sun

Thoughts from TAB

As a diligent follower of the Business Aviation section of Forbes, I know that the most important decision a business owner ever faces is; should I buy a jet???

Mark Patiky, author of Take the Pain out of Business Travel.? Fly Yourself, would tell you that if you?re a business traveler, the answer is yes.? But he?s not advocating a corporate jet, or some kind of socialist corporate lease program, Mr. Patiky suggests that you purchase a two-seater prop plane.?

This is interesting advice, and not advice that I?ve heard before.? Mr. Brugman says a business traveler on a regional flight can deduct 2/3^rd?s of their total travel time, and 4/5^th?s of their total travel costs by taking their own vessel.? It?s hard to argue with the assertion that private flight saves time, but I?m absolutely positive that non commercial flights can?t save you money.?

Of course I?ve been wrong before, especially in matters of finance, so let?s take a closer look at the benefits of shuttling myself to Durango, (essentially Providence to Manhattan, the distance traveled in Mr. Brugmans trip,) in my own plane. I?ll use the same lead time afforded to the aviation scribner, we?ll say I have to be in Durango tomorrow morning, and that I have to come home the same day.?

On Hotwire, a serviceable, next day, round-trip flight to Durango costs me $500.? Brugman?s flight from Providence to Manhattan allegedly cost $1000, so let?s say the average cost of a next day flight is $750.?

A 20 year old single prop Mooney M20M Bravo, the exact plane described by Mr. Brugman can be purchased here, for the low, low price of $160,000.? There are plenty of 40, and even 50 or 60 year old planes for sale on this website, so let?s say this plane will last for another 20 years.? Not a licensed pilot?? Here we can find a realistic estimate for the cost of flight school.? $8500 This website tells you to budget $4000 per year for insurance, maintenance, and inspections. So far as I can tell, if you want to keep want to keep your plane at an airport, it?s going to cost you. The most reliable source I could find put the price at $7 per night for outdoor parking.

Then there?s ramp fees, I won?t factor these because often, these fees are waived if you fill you plane with gas when you land.?

Fuel?? According to this website, jet fuel will set you back about $6 per gallon.?

Let?s crunch some numbers; remember we?re assuming no major repair costs, and that the jet will last you 20 years.?

Cost of airplane 160,000/20= $8000 per year.

Pilot license= $425 Dollars per year.

Insurance, maintenance, inspection=$4000 per year.

Parking your plane+ 7*365= $2555

So without fuel costs, the cost of owning a plane is $14980 per year.? Let?s round to $15,000 and say that the figure is equal about 20 next day, round-trip, regional flights per year.?

Not as bad as I thought, let?s factor in fuel.?

In the article we used Denver to Durango as an example.? That trip is about 200 miles as the single propeller plane flies.? Mr. Burgman said his plane, the one we are using in this study gets 20 miles to the gallon.?

20/200=10

10*6=60,

60*20= 1200, about two next day, regional flights.?

So if you?re taking 22 or more short-notice regional flights on commercial planes annually, you might want to consider purchasing an aero-plane.??

Of course if you?re making 22 or more short-notice regional flights on a commercial plane, and you haven?t already weighed the pro's and cons of jet ownership, I'd imagine your business is struggling. If you?re honestly considering buying a single propeller plane for your small business, maybe it?s time to sell.?

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Did this blog persuade or dissuade you from buying a plane?? Chime in on Facebook.

Source: http://blogs.thealternativeboard.com/2012/09/flying-too-close-to-sun.html

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