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Use This Detailed List of Routine Costs to Help Set Your Private Jet Charter Budget

January 24, 2017 By admin Leave a Comment

Use This Detailed List of Routine Costs to Help Set Your Private Jet Charter Budget

One of the reasons aviation-related and other luxury service startups have failed in recent years is underestimating the costs. Those going into the industry for the first time might get carried away when they realize they can afford the plane (or, in the case of “Uber for X” models, realize that they don’t even have to own a plane in order to sell charter flights) that they neglect the other costs – a mistake that could ultimately spell the collapse of the business.

Use the list below as a guideline to create a realistic budget for your operating expenses.

1. Fuel

Fuel can make up nearly a third of your operating costs. When including fuel in your budget, make sure to make allowances for price fluctuations.

2. Staff salaries and benefits

Apart from the routine costs of pay and healthcare, make room in your budget for incentives as well as administrative costs such as hiring new staff members through a job website or HR agency when someone leaves.

3. Maintenance

There are ways to save on maintenance without compromising the safety or luxury of your aircraft. Still, don’t be tempted to skimp too much on preventive maintenance – neglect will eventually catch up to you in the form of repair costs and loss of profits while grounded.

4. Damages and repairs

While the need for repairs might not always come up, it’s important to set aside a certain amount regularly. Unspent amounts from your repair budget can be put into an emergency fund for when you need to replace more expensive parts.

5. Cabin supplies, cleaning, and maintenance

Jet charters are most often a luxury purchase, so your interiors need to be in perfect condition as well. Apart from cleaning services and supplies, reserve an amount for repairs and replacements for interior items such as upholstery, lighting, and flooring.

6. Catering

Your food and beverage offerings can play a significant part in how your customers rate your service, so this needs to be an important consideration in your budget. Determine whether it would be more cost-effective in your case to hire a chef full-time or just purchase meals from a caterer or restaurant.

7. In-flight entertainment

This would include internet access, subscriptions to on-demand TV and movie services, and magazines.

8. Taxes and insurance

Have your accountant crunch the numbers to find you the best possible deals for your insurance, and determine all the possible tax exemptions.

9. Office expenses

The amount would depend largely on how many full-time in-office workers you have versus freelance contractors. This includes rent, utilities, cleaning services, office supply consumables, and replacements or repair of office equipment.

10. Advertising

An advertising budget is a necessity for your business and shouldn’t be an afterthought. Try to find lower-cost options for promotion such as targeted Facebook ads, and ads in local papers.

11. IT services

Apart from your office internet subscription, you might also need various software licenses, cloud-based storage and computing services, and website or app management costs.

Filed Under: Private Jet Business Tagged With: cleaning services, costs, routine costs

Jettly is no substitute for obtaining a knowledge base from fully qualified and accredited people in your jurisdiction. Our comments and statements are meant to stimulate thought processes that may eventually take you along that developmental path. Our readers should seek advice and knowledge about any and all applicable regulations from qualified people in your jurisdiction.

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