Often, ideas for informative books begin with conference data; numbers that CEOs discuss, then move on. This occurrence is generally what happened with the new book, recently published (October 2022) entitled Aircraft Buying Guide 2022. It was published by SherpaReport, a virtual publication online since 2006, that provides valuable information and analysis to UHNW clients, allowing for more informed decision-making in purchasing of private aircraft, or investing in jet cards, or buying fractional, charter or full ownership of jets, yachts, and other travel options. Because it is one-of-a-kind, Sherpa’s business and consumer membership base has grown exponentially over the years, and with the publication of this book, will likely grow additionally.
SherpaReport was founded by President and Senior Analyst Nick Copley. An online media and publishing executive, he has dedicated his career to building and growing various media and information businesses. Nick has had in-depth discussions with the many leading providers and operators of high-end jets, yachts, and destination clubs, as well as innovative start-ups, in the fields of private aviation and luxury travel. The resulting insider knowledge, acumen, and insights are reflected in the quality of comprehensive content available on SherpaReport. And now, the book.
Recently, Nick attended the NBAA (National Business Aviation Conference) in October 2022, where a keynote speaker presented an interesting statistic: In 2021, 40% of buyers of private planes were new, generally young, buyers. This interested Nick as he was working on a book that helped solve the puzzle many potential private jet buyers had discussed with him – what does it take, in addition to money, to purchase a new or used private jet? What are the criteria, and what type of team must be in place so as not to make financial errors? This book, Aircraft Buying Guide solves the puzzle, as it explains reasons to own, reasons NOT to own, steps in the process, and further legal and tax implications in acquiring a private jet. Further, 2021 stats from NBAA interested him: new aircraft business jet purchases numbered 710, Turboprops 527 purchases; planes with piston engines, 1,393 were purchased.
JustLuxe recently completed a business conversation with Nick Copley, about the reasons behind buying a jet or not; the teams needed for such a purchase, and in general, the reasons for the major uptick in flying privately, post-pandemic.
JustLuxe: How do you think the pandemic has changed the perception of flying privately?
Nick: Historically, over many years, the most important reason that people give for flying privately is to save time. This is expected to continue to be one of the key reasons going forward.
The pandemic brought many new first-time flyers to private aviation. They were brought in by the relative health safety of private aviation compared to commercial flights – going through much quieter private terminals and having the plane to yourself. But once they had flown privately, they came to experience other benefits: the time saving, the flexibility, the privacy, quality of service and convenience, to name just a few.
JustLuxe: You mention dealing with alternatives to owning. Do you have some stats as to which, post-pandemic, is most popular alternative as of 2021-2022?
Nick: Private aviation has reached record levels in 2022. Initially coming out of the pandemic, it was charter and fractional ownership that first started to hit record levels, and early in the pandemic, it was light jets and turboprops that were flying, because most of the travel was domestic in the US.
The owner-occupied planes took a little longer to start hitting records – some of these are owned by corporations that weren’t doing as much travel, early in the pandemic. And now, we are a couple of years post pandemic-onset, and with international markets opening, the larger cabin aircraft have more flights now.
JustLuxe: Also, your explanation of the travel needs of the UHNW potential buyer includes thoughts on what and how to assess personal and professional requirements, in terms of purchasing a new or used jets. In your personal experience, have you, as Publisher of the SherpaReport, heard about problematic consequences of buying a jet based on seduction of NEW rather than fiscal practicality?
Nick: New vs. used is always an interesting part of the purchase discussion. New aircraft cost more but are often more fuel efficient and can be on manufacturer’s maintenance plans, which makes operational budgeting far simpler. At the same time, new aircraft, in a normal market, depreciate faster. In other words, buying used can get you a lot more plane for your money.
It’s always a balance of wants vs needs. There are certainly stories of people buying more for wants than needs or being more influenced by emotional sentiments than fiscal economic discipline. Each buyer is different and driven by different requirements. A good adviser will guide someone through the purchase process and help avoid big fiscal missteps.
JustLuxe: How important is an aviation attorney in the purchase of a jet? What issues can be handled well by this type of attorney?
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Nick: Aviation is a heavily regulated sector, so having an expert on all these regulations is quite important. Someone whose practice is focused on aviation will have experience of numerous aircraft transactions and will know the steps to take, and as importantly, those to avoid. They can advise on ownership structure, compliance with federal regulations and may also cover all the complicated aviation tax issues.
JustLuxe: Your book says, “A key question often revolves around chartering out the plane to cover some of the costs, and this is another area where prior experience with the type of plane can make a lot of difference.” Can you explain the difference?
Nick: Chartering out your aircraft can help offset some of the costs of ownership. But aircraft managers vary, and some are better at producing charter revenue than others, and some are better with certain aircraft simply because they have experience with that plane and may have a book of charter customers who like that type and size of aircraft.
JustLuxe: Some of the most relevant explications in your book center around a detailed needs assessment and analysis diagram, created by Paul La Fata, the renowned aircraft budget analyzer. Is this process more helpful to seasoned or to new buyers?
Nick: This process applies to all buyers whether they are buying their first plane or their fifth plane. Needs change over time, so an assessment to understand those current needs and wants, is a key early part of any buying process. A good aviation professional will know the right questions to ask to help facilitate this research and assessment.
JustLuxe: Your book well defines issues and solutions to corporate aircraft acquisitions, five operating cost categories, suggestions as regards the purchase and maintenance of a private jet, legal and tax considerations, pre-purchase inspections, types of insurance, and a check list at the end. If you did a second edition of this aircraft buying guide, are there any other thoughts, tables, and ideas you might add?
Nick: We very much plan to update the Guide each year because things change so often in the marketplace. We included tables of costs, as examples, for multiple aircraft and over time this change, so we will update these each year, to give readers the latest numbers to help with their decisions.
In writing the book, we reached out to several sector specific experts, for instance in aviation law and tax and in aviation insurance, and we will talk to them in the future to cover any key variations. But the essential steps, the buying process and advice and information is likely to remain the same.
JustLuxe: And finally, what issues have you seen in the aircraft purchase or charter population that you think this book will help?
Nick: Over many years, I’ve spoken to many people who say that so much about private aviation costs is confusing and opaque: facts that ought to be straightforward often are not. I have heard questions like, what are the different ways I can fly privately, what are the differences between cards, memberships, and fractional ownership, and how much each cost.
The goal is to bring those parts into one place to help buyers solve the puzzle. The book might help them become smarter buyers for their first transaction, by providing guidance for what is involved. In other words, I helped write the book to help bring clarity to a potential private aviation flyer; simply to help them understand what their options are, how each option works, what it provides and what it costs. One big aim of the book is to help bring clarity to a potential private aviation flyer. Simply to help them understand what their options are, how each option works, what it provides and what it costs.