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Saturday, April 15, 2006

Jet Charter, Private Jet or a Corporate Business Jet?

Tough question - do you charter a jet or do you purchase your own private jet?


A private jet or a chartered corporate jet is a bit of a stretch for most small businessmen.


The concept is is a valid one for comparing purchase versus rent decisions - even if most of us won't have to apply the concept to business jets.


In speculation there is often a timing issue where components of a purchase decision are subject to market volatility. In business there is (sometimes) only the bottom line of profitability.


If you are in a position to charter a jet or purchase a jet just for your ego's sake - it is again divorced from a business decision - get the best you can afford without compromising your wealth.


For a business jet however there are some considerations beyond monthly payments that may enter into the decision.


Michael Eisner may have overstayed his welcome- and his contribution - with Disney. Disney however had floundered and almost been split up after Walt Disney died as no one seemed willing to make hard decisions. Michael was brought in to save the company and drive up the share price - he did.


One of the parts of the Disney offer that attracted Eisner for those first successful years was the benefits package - which included a couple of company jets.


Eisner made a lot of money for the shareholders, and for himself. At the level he was being paid - a corporate jet saved money by cutting delays and allowing him to work while in transit.


Eisner might not have turned down the job if he would have had to fly commercial -- but his ego and decision making capacity was probably enhanced by status symbols, including the jets, that came with the position.


Chartering a jet occasionally versus purchasing a private jet or corporate jet can be reduced to numbers - but so can renting or buying your house.


Often the decision will come down to benefits that are hard to put on paper, but are impossible to ignore. Is it going to be a Lear jet, Gulfstream, Aztec jet, or perhaps an airbus or other commercial use jet? Each type of personal jet says several things about the owner, although even the man in the street knows Learjet.


You can charter a jet to investigate the idea, or just contact a seller - although you probably won't get the benefits of a long distance test from a seller.


For a weeks vacation - charter a jet. A private jet or a corporate jet is far more difficult to justify - or deny.


Now - do you really need that much truck for your small business?


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