The annual ownership budget, line by line
Alexander Filimonov — business aviation: sourcing, acquisition and entry into service.
A super-midsize Praetor 600 sells on the market for $20–29.5 million, to my knowledge. Our catalogue splits its annual running cost into two numbers: fixed costs of about $948 470 a year and variable costs of about $4 029 per flight hour. Everything after that comes down to one figure — how many hours you fly in a year.
Eight lines that make up the year
| Line | Type | What sets the amount |
|---|---|---|
| Crew | fixed | Two pilots type-rated on the aircraft; a large jet adds a flight attendant |
| Hangar or ramp | fixed | Size of the aircraft and the base. Rates between airports differ several times over |
| Insurance | fixed | Value of the aircraft, geography of flights, crew experience, form of operation |
| Engine and airframe programmes | fixed plus hourly | The main budget item. Detail below |
| Calendar checks and continuing airworthiness | fixed | They fall due by date whether the aircraft flew or sat |
| Navigation databases, connectivity, subscriptions | fixed plus one-off | Subscriptions run every year, one-off upgrades are expensive |
| Fuel, fees, ground handling, catering | variable | Counted on actual hours flown |
| Reserve for heavy checks and engine overhaul | reserve | Set aside every hour, spent once in several years |
The reserve line differs from the rest in one way: no invoice arrives for it monthly. That is exactly why it goes unbudgeted most often.
What it looks like in money
Praetor 600, fixed costs $948 470 a year plus $4 029 per hour, to my knowledge:
| Hours a year | Fixed | Variable | Total for the year | Full cost per hour |
|---|---|---|---|---|
| 100 | $948K | $403K | $1.35M | $13 500 |
| 200 | $948K | $806K | $1.75M | $8 800 |
| 300 | $948K | $1.21M | $2.16M | $7 200 |
| 400 | $948K | $1.61M | $2.56M | $6 400 |
The annual budget rises 1.9 times while the full cost of an hour falls 2.1 times. The fixed block spreads across more hours, and that is the one way to bring the hour down without giving up anything real in how the aircraft is operated.
A word on the illusion of a cheap entry. The market holds the Learjet 31A in a corridor of $499K–1.09 million, with a reference operating cost near $4 380 per hour against an annual budget of about $1.97 million, to my knowledge. A year of running it costs twice the price of the aircraft itself. Purchase price and running cost live independently of each other.
The main line is the engine reserve
An engine is a consumable with a known life and a known restoration price. The order of magnitude by type, to my knowledge:
| Engine and type | Restoration |
|---|---|
| Rolls-Royce Tay 611-8, Gulfstream GIV | $2–3M a pair |
| GE CF34-3A, Challenger 600/601 | $1.5–2M a pair, 6 000–8 000 hours between overhauls |
| PW305B, Hawker 1000 | $1.2–1.8M a pair |
| Honeywell TFE731-5BR, Hawker 750 | $700K–1M per engine |
| PW617F1-E, Phenom 100 | 3 500-hour life, reserve $500–700K |
Restoring a pair of Tays on a GIV comes to the price of the aircraft: a GIV-SP in good condition trades at $4–5 million, to my knowledge. On the Hawker 1000 the cost of overhauling the pair exceeds the price of the aircraft, and the low prices on the type follow directly from that.
An hourly programme turns a rare large payment into a level instalment. The market prices it directly: an aircraft outside a programme gives up $1.5–2 million on a Challenger 604 or Global 6000, $1–1.5 million on a Legacy 450 and $500–800K on a Phenom 300 at resale, to my knowledge. Skipping the programme moves the money out of the annual budget and into the discount you take on the way out of the asset.
Lines that surface after the first year
Heavy airframe checks. The 120- and 180-month inspections on a Global Express run $1.5–2.5 million, to my knowledge. An unaccomplished 120-month check takes $0.8–1.5 million off the price of a Global 6000.
Avionics and connectivity upgrades. An ADS-B Out and FANS 1/A package costs $200–350K on a Hawker 800, $600K–1 million on a Challenger 604 and $0.7–1.2 million on a Global Express, to my knowledge. Fitting satellite connectivity on a Global 5000 runs $0.5–1 million.
What to do with this
An annual ownership budget is built bottom-up, line by line, against a specific aircraft and a specific base. A class average gets in the way here: decisions taken on one end up hundreds of thousands of dollars away from the fact.
Take the table above and fill in the eight lines for your own annual hours and your own base. Count the reserve separately: with no programme on the engines, set the money aside yourself at the same rate. Money left out of the budget is money missing from the calculation.
Figures here are market benchmarks from open sources, to my knowledge. The specifics are worked out against the documents of a particular aircraft.
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