Affordability of a Private Jet: Is $150M Too Much?

The perception of whether $150 million is too much to spend on a private jet largely depends on the convenience and prestige it offers. Let's delve into the costs and functions of a private jet and evaluate if such a lavish investment is justifiable.

Initial Costs and Maintenance

A basic private jet can start from around $2 million, while an 8 million jet offers the luxury of being flown solo if the pilot is certified and rated. However, beyond these thresholds, additional pilots or even a flight crew become necessary, along with the expenses of maintenance, storage, and fuel. Insurance is also a significant factor to consider.

Ultimately, the allure of owning a private jet might justify the substantial cost for some, but it is important to note that $150 million is a highly excessive amount. Even with this budget, the jet operations could drain your resources, making the convenience and prestige questionable.

Secondary Costs and Maintenance

In addition to the purchase price, there are numerous landing fees, parking fees, maintenance, fuel costs, and flight crew expenses. These ongoing costs can deplete the $150 million remarkably fast. This makes it difficult to justify spending such a large sum on a private jet.

For those deeply considering a private jet purchase, there are other ways to spend money too. The Gulfstream G650, for instance, set the standard in business jets: it can fly from Los Angeles to Melbourne, Australia, non-stop in almost 15 hours, while cruising at Mach .90 with a 100% fresh air cabin at sea-level pressure. A slightly used G650 can be purchased for around $50 million, which amounts to less than one-third of the $150 million budget.

Depreciation and Tax Considerations

Since 2020, new and used business jets can be fully depreciated immediately under the U.S. tax code. This means if you are offsetting $150 million in income, purchasing a like-priced jet might make sense from a tax perspective. However, there are likely more efficient ways to achieve the same financial offset and plenty of tax professionals can offer alternative solutions to this complex problem.

Even with the $150 million budget, only a portion would be allocated to the jet purchase itself. The rest could be financed at today's low interest rates, resulting in a net gain of more than $150 million after the purchase, assuming you were offsetting $150 million in income.

Options Within Budget

For those who are determined to spend $150 million, the Boeing Business Jet (BBJ) Max 9 would typically cost less than $100 million new. The larger 787-based version would likely exceed the budget, leading to the consideration of used commercial aircraft like the 747 or 787-based VIP conversions.

In conclusion, while the allure of a private jet is undeniable, the cost analysis suggests that spending $150 million might be more than what is necessary. Careful evaluation of costs, maintenance, and tax implications can help in making a more informed decision.