Compared to other business types such as retail, food, or everyday services, the private aircraft charter business is much less common. So for someone venturing into it for the first time, there’s unfortunately not nearly as much literature or industry wisdom to go on. This leads to some pitfalls that could ultimately spell failure for the company. Here, we list the 5 “don’ts” for someone looking to start a private jet charter company.
- Don’t evade taxes.
Whether it’s falling for the temptation of tax evasion so as not to cut into your profit margins, or simply the negligent work of an incompetent accountant, not paying proper taxes could land your company in serious trouble especially at the transaction size that comes with private jet charters. At best, it could lead to massive tax fines, and at worst you could be shut down and face jail time for tax evasion. Moral of the story is to get the best tax advice you can afford because one wrong transaction in this industry can wipe your business out.
- Don’t overestimate the demand in your market.
You might be a latecomer to the jet charter industry in your area or decided to go into it after seeing a similar business find great success. If so, proceed with caution and make sure to do thorough market research in your particular location. Don’t be lured by the prospect of unmet demand without confirming with data first. The amount you’ll spend on market research is minuscule compared to the sums you stand to lose upon investing in a business that not enough people need.
- Don’t underestimate the funding you’ll need.
Private aviation businesses come with a massive capital requirement, which doesn’t stop at just being able to afford a jet. You’ll also need funding for your hangar and office, staff hiring costs and salaries, training and certifications, maintenance, license fees, computers and software, and so on. Research specific numbers and don’t rely on rough estimates.
- Don’t neglect maintenance.
Yes, aircraft maintenance is expensive, but the consequences you stand to face due to improperly cared-for aircraft are much more costly. At best, you lose business when your planes get grounded for not complying with safety regulations. The worst-case scenario, of course, is to have a serious accident because of technical failure. Don’t be that kind of company.
- Don’t shy away from partnerships with other firms.
There are services that might seem more costly if you hire a company versus doing it in-house; examples of this could be catering, marketing, or IT services. However, you must be honest in gauging whether you can realistically handle these requirements within your company, or it would require manpower that you cannot afford. For instance, if you try to skimp on marketing or advertising costs by not hiring an agency and instead just assigning that task to a member of your staff – who isn’t even a full-time marketing professional – you run the risk of damaging your company’s reputation by seeming unprofessional. Good partnerships can set your company up for smooth operations and greater profits, so don’t ignore this opportunity.