Owning vs. charter vs. airlines

In article , Mike
wrote:

€ On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
€ wrote:
€
€ There is usually a point where it is cheaper to do it yourself than have
€ someone else do it for you. What I'm wondering is what would that point be
€ when it comes to trans-world air travel. When does buying your own jet and
€ employing your own pilots make economic sense than using an airline? Or
€ will the airlines always be cheaper?
€
€ More specifically, let's say you have a number of employees in Fiji. Each
€ gets four round-trip flights to anywhere in the world each year as part of
€ their benefit package. Most will want to use at least one of those for the
€ Christmas season to spend the holidays with family. There would also be an
€ expected heavier usage of their flight options during the summer. The
€ question I have is: How many employees would one need to have where buying a
€ private jet and employing pilots would make economic sense? Would there
€ also be a span between these two options where chartering a private jet
€ would make economic sense?
€
€ Scott Jensen
€
€ I am pretty sure that private jet ownership will lose in a pure cost
€ comparison. However, to make a fair comparison, one would have to
€ consider many factors. What is the passenger's time worth? Is there
€ convenient regular scheduled service? etc. A round trip first class
€ ticket from the US to Europe can be upwards of $10,000 if purchased at
€ the last minute. Or you could buy your own Boeing Business Jet for
€ $40,000,000. Even if only used for one trip, the BBJ could have a net
€ lower cost. If the passenger takes the commercial flight for $10,000
€ and the airline gets him there late and he loses the $4 billion dollar
€ deal, then you can see why he would be better off spending the money
€ for the BBJ.

$4 billion dollar deals are pretty rare.

"Alan Street" wrote in message
...

$4 billion dollar deals are pretty rare.

Not any more! Wal-Mart alone does 100 of those each year.

"Alan Street" wrote in message
...
In article , Mike
wrote:

? On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
? wrote:
?
? There is usually a point where it is cheaper to do it yourself than
have
? someone else do it for you. What I'm wondering is what would that
point be
? when it comes to trans-world air travel. When does buying your own jet
and
? employing your own pilots make economic sense than using an airline?
Or
? will the airlines always be cheaper?
?
? More specifically, let's say you have a number of employees in Fiji.
Each
? gets four round-trip flights to anywhere in the world each year as part
of
? their benefit package. Most will want to use at least one of those for
the
? Christmas season to spend the holidays with family. There would also
be an
? expected heavier usage of their flight options during the summer. The
? question I have is: How many employees would one need to have where
buying a
? private jet and employing pilots would make economic sense? Would
there
? also be a span between these two options where chartering a private jet
? would make economic sense?
?
? Scott Jensen
?
? I am pretty sure that private jet ownership will lose in a pure cost
? comparison. However, to make a fair comparison, one would have to
? consider many factors. What is the passenger's time worth? Is there
? convenient regular scheduled service? etc. A round trip first class
? ticket from the US to Europe can be upwards of $10,000 if purchased at
? the last minute. Or you could buy your own Boeing Business Jet for
? $40,000,000. Even if only used for one trip, the BBJ could have a net
? lower cost. If the passenger takes the commercial flight for $10,000
? and the airline gets him there late and he loses the $4 billion dollar
? deal, then you can see why he would be better off spending the money
? for the BBJ.

$4 billion dollar deals are pretty rare.

And ones that get lost because you get there a day later are non-existant.

Mike
MU-2

"Matt Barrow" wrote in message
...

"Alan Street" wrote in message
...

$4 billion dollar deals are pretty rare.

Not any more! Wal-Mart alone does 100 of those each year.




Name one.

Mike
MU-2

"Mike" wrote in message
news
On Fri, 01 Apr 2005 15:22:04 GMT, "Mike Rapoport"
wrote:


"Mike" wrote in message
. ..
On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
wrote:

There is usually a point where it is cheaper to do it yourself than have
someone else do it for you. What I'm wondering is what would that point
be
when it comes to trans-world air travel. When does buying your own jet
and
employing your own pilots make economic sense than using an airline? Or
will the airlines always be cheaper?

More specifically, let's say you have a number of employees in Fiji.
Each
gets four round-trip flights to anywhere in the world each year as part
of
their benefit package. Most will want to use at least one of those for
the
Christmas season to spend the holidays with family. There would also be
an
expected heavier usage of their flight options during the summer. The
question I have is: How many employees would one need to have where
buying
a
private jet and employing pilots would make economic sense? Would there
also be a span between these two options where chartering a private jet
would make economic sense?

Scott Jensen

I am pretty sure that private jet ownership will lose in a pure cost
comparison. However, to make a fair comparison, one would have to
consider many factors. What is the passenger's time worth? Is there
convenient regular scheduled service? etc. A round trip first class
ticket from the US to Europe can be upwards of $10,000 if purchased at
the last minute. Or you could buy your own Boeing Business Jet for
$40,000,000. Even if only used for one trip, the BBJ could have a net
lower cost. If the passenger takes the commercial flight for $10,000
and the airline gets him there late and he loses the $4 billion dollar
deal, then you can see why he would be better off spending the money
for the BBJ.

How would the BBJ have a lower cost?

Mike
MU-2

Spend $40 million to get a $4 billion contract, or spend $10,000 and
get nothing. Spending $40 million makes more money. Therefore,
spending $40 million has a NET lower cost.

I suppose that you are right if there is any such thing as a $4B opportunity
that depends on being somewhere at a specific time. I any event, a BBJ will
never be the cheapest way to get anywhere.

Mike
MU-2

$4 billion dollar deals are pretty rare.

And ones that get lost because you get there a day later are non-existant.

Mike
MU-2


Okay, the $4B thing is a bad example, but anyone who doesn't think that
large deals have not been lost over small things has not spent enough time
around the petty country club that is now the american boardroom. The
people running most of our large corporations are more about power and ego
than dollars and sense - yes, I mean "sense".

I can't stand them, can't understand them, can't underestimate them, and
will likely have to go back to dealing with them to make enough dough to pay
for my aviation habit. Sure, many of them are just being pragmatic about the
way things are, but too many of them wouldn't change it if they could.

"Mike Rapoport" writes:

"Mike" wrote in message
news
On Fri, 01 Apr 2005 15:22:04 GMT, "Mike Rapoport"
wrote:


"Mike" wrote in message
...
On Fri, 1 Apr 2005 01:21:11 -0600, "Scott Jensen"
wrote:

There is usually a point where it is cheaper to do it yourself than have
someone else do it for you. What I'm wondering is what would that point
be
when it comes to trans-world air travel. When does buying your own jet
and
employing your own pilots make economic sense than using an airline? Or
will the airlines always be cheaper?

More specifically, let's say you have a number of employees in Fiji.
Each
gets four round-trip flights to anywhere in the world each year as part
of
their benefit package. Most will want to use at least one of those for
the
Christmas season to spend the holidays with family. There would also be
an
expected heavier usage of their flight options during the summer. The
question I have is: How many employees would one need to have where
buying
a
private jet and employing pilots would make economic sense? Would there
also be a span between these two options where chartering a private jet
would make economic sense?

Scott Jensen

I am pretty sure that private jet ownership will lose in a pure cost
comparison. However, to make a fair comparison, one would have to
consider many factors. What is the passenger's time worth? Is there
convenient regular scheduled service? etc. A round trip first class
ticket from the US to Europe can be upwards of $10,000 if purchased at
the last minute. Or you could buy your own Boeing Business Jet for
$40,000,000. Even if only used for one trip, the BBJ could have a net
lower cost. If the passenger takes the commercial flight for $10,000
and the airline gets him there late and he loses the $4 billion dollar
deal, then you can see why he would be better off spending the money
for the BBJ.

How would the BBJ have a lower cost?

Mike
MU-2

Spend $40 million to get a $4 billion contract, or spend $10,000 and
get nothing. Spending $40 million makes more money. Therefore,
spending $40 million has a NET lower cost.

I suppose that you are right if there is any such thing as a $4B opportunity
that depends on being somewhere at a specific time. I any event, a BBJ will
never be the cheapest way to get anywhere.

Will it ever be the most reliable? The airlines have more planes to
swap around if something breaks, for example. And the private jet is
subject to most of the same air-traffic delays, isn't it?
--
David Dyer-Bennet, , http://www.dd-b.net/dd-b/
RKBA: http://noguns-nomoney.com/ http://www.dd-b.net/carry/
Pics: http://dd-b.lighthunters.net/ http://www.dd-b.net/dd-b/SnapshotAlbum/
Dragaera/Steven Brust: http://dragaera.info/

("Mike" wrote)
How would the BBJ have a lower cost?

Spend $40 million to get a $4 billion contract, or spend $10,000 and
get nothing. Spending $40 million makes more money. Therefore,
spending $40 million has a NET lower cost.


Dang it. Corporate Team B has a chartered helicopter waiting to take them
from the airport to Midtown. We're ruined!!

($10,000 in airline tickets x 4,000 units of risk = $40 Million)
($10,000 up to $40 million is a 400,000% increase in spending)

That $40 million spent for the BBJ by the oh-so-close Team A is now just one
more hit against the bottom line.


Montblack
Rommel, you magnificent *******. I read your book.

This is all about angels on the head of a pin, but if your executive and the
rest of the team on the plane is worth $2,000 per hour, it doesn't take much
time to make it all make sense.

Especially if those people would skip to your competition or otherwise be
less valuable because they got tired of living at the airport and being away
from their families.

Mike Rapoport wrote:
"Scott Jensen" wrote in message
...

There is usually a point where it is cheaper to do it yourself than have
someone else do it for you. What I'm wondering is what would that point
be
when it comes to trans-world air travel. When does buying your own jet
and
employing your own pilots make economic sense than using an airline? Or
will the airlines always be cheaper?

More specifically, let's say you have a number of employees in Fiji. Each
gets four round-trip flights to anywhere in the world each year as part of
their benefit package. Most will want to use at least one of those for
the
Christmas season to spend the holidays with family. There would also be
an
expected heavier usage of their flight options during the summer. The
question I have is: How many employees would one need to have where buying
a
private jet and employing pilots would make economic sense? Would there
also be a span between these two options where chartering a private jet
would make economic sense?



The economic justification for business jets is that they can save very
valuable time of highly paid executives. It never makes sense on a cost per
mile basis.

Mike
MU-2



Add to that marketing (or lobbying) value. What better way to win over
a b2b client's business or a congressman's vote than to give them a free
ride in a corporate jet?