What Is an Average Private Jet's Insurance Price and Maintenance Costs?
So you are looking to purchase a plane, and you are asking yourself what a typical annual operating budget would be. We will use a Citation X airplane for most of my examples. A Citation X airplane is simply a medium sized aircraft that has two engines but is very fast.
Insurance
Once you have closed the sale of your new Citation X aircraft, your first order of business will be to arrange for insurance. The Hull Value will determine the amount of premiums you will pay; the average going rate is 14% of the hull value. The accepted standard liability is $200,000,000, but this will slightly vary depending on the age of the aircraft, type of ownership and the aircraft use.
Your annual insurance premiums for a Citation X aircraft that is valued for around $10,000,000 will be $30,000 per annum. Due to the price wars between insurers, the period we are on of low premiums is expected to continue and this is good news for all aircraft owners.
Parking
The next logical step is to look for somewhere to place your valuable machinery. Since the real estate bubble, there has been an abundance of hangar spaces available for aircraft owners; the prices vary depending on the region you select to be your aircraft’s base. For top class amenities with Fixed Based Operators (FBO’s), the cost will run up to $5000 per month, however, away from such hot spots, you may find costs ranging around $3000 a month. Therefore, your annual cost will be $36,000 per annum.
Maintenance
Even when not using your plane, you will still need to adhere to a calendar schedule of maintenance, zero flights per year still warrant component replacement every 3, 12, 24, 36, 72, 120 and 144 months. Otherwise, you will be unlicensed. This calendar schedule is still supplemented by an hourly schedule that ranges from 270 to 15,000-hour intervals. Constant maintenance may not increase the value of your plane but it will maintain it, as well as saving your life.
Staffing
There isn’t much to speak on this subject, except by saying you require a Captain and Co-Pilot for your Citation X. The rest will be determined by how much you are willing to splurge for your luxury. Set aside $300,000 to $350,000 for salaries and benefits. Of course, if you prefer to fly with a flight attendant, the cost must be rolled into the budget.
Fuel
This is considered as Direct Costs that heavily relies on the type of plane. The lighter the plane, the less fuel it will burn. Also, for every hour the plane flies, the less the fuel consumption. In our case, a Citation X aircraft will have a fuel consumption of around 360 u.s.g. Per flight hour. In total, the yearly operating cost will be around $2,500,000. Make sure you consult an aviation accountant or expert to get the exact figures. You should also find out about the tax benefits that come with owning your plane.
