If you're making use of your jet less often now compared to when you first bought it, chances are you'll be checking out ways to reduce your ownership costs. If you have a solid management program, either with the Chief Pilot/Director of Operations of your flight department or using a well respected management company, you quite possibly have your expenses already cut down to the lowest costs attainable without affecting the safety of the operation. So what else could you do? A smart option would be to use your jet to generate income when it sits idle.
There are many ways you'll be able to generate revenue from your aircraft. Many aircraft owners will first look at letting their friends operate the plane in return for payment. At first glance this is a fast and very easy way to generate income to counterbalance fixed costs - but be cautious. Federal Aviation Administration (FAA) and Internal Revenue Service rules and regulations prohibit offering an aircraft with pilots to a third party for payment unless you possess your own air carrier certificate. A good number of non-aviation tax and law specialists do not appreciate the detailed aspects of aviation regulations, so it's a good idea for you to consult with a tax and legal professional who makes a specialty of aviation to keep from unintentionally violating regulations.
One particular way you can lawfully produce income with your jet is by providing your aircraft to a third party, without fuel or crew, as a dry lease arrangement. Due to FAA commercial rules, you'll be able to only receive payment for the use of the aircraft, and can't supply a flight crew or fuel together with the aircraft. You will require a written dry lease agreement set up and there could possibly be negative tax consequences, so it is a good idea to talk to aviation-specific tax and legal experts before you proceed.
Be sure your aircraft manager submits the lease agreement to the FAA for acceptance and notifies your insurance company. Dry leasing your aircraft then places "operational control" into the hands of your lessor when your aircraft is being controlled by the third party, who must also consider the liability issues involved.
The vast majority of aircraft owners have a preference for the easiest method of producing revenue with their aircraft - putting their aircraft onto a charter firm's Part 135 air carrier certificate. In contrast to what you may have read, operating your aircraft on a charter certificate is essentially really straightforward and affordable. While there are several "super-sized" management companies with higher month-to-month and conformity fees, a large number of charter operators are concerned with setting up a fair structure that delivers value for the aircraft owner and a mutual business benefit.
Allowing a charter company to utilize your aircraft enables you to legally generate charter revenue and minimize your own liability in the operation of the aircraft. Most significantly, the charter revenue earned might offset a substantial part, if not all, of your operating expenses.
Chartering often is the most convenient way for you as an aircraft owner to lawfully produce revenue because you could set the terms on just how much charter revenue you want, and when you would like the aircraft available for charter operations. Most dry lessors will be expecting to have the aircraft available at their convenience, while charter operators are much more concerned about meeting the aircraft owner's desires first. Chartering will allow you to maintain use of the aircraft even while capitalizing on the use of revenue-earning flights with your aircraft.
There are many ways you'll be able to generate revenue from your aircraft. Many aircraft owners will first look at letting their friends operate the plane in return for payment. At first glance this is a fast and very easy way to generate income to counterbalance fixed costs - but be cautious. Federal Aviation Administration (FAA) and Internal Revenue Service rules and regulations prohibit offering an aircraft with pilots to a third party for payment unless you possess your own air carrier certificate. A good number of non-aviation tax and law specialists do not appreciate the detailed aspects of aviation regulations, so it's a good idea for you to consult with a tax and legal professional who makes a specialty of aviation to keep from unintentionally violating regulations.
One particular way you can lawfully produce income with your jet is by providing your aircraft to a third party, without fuel or crew, as a dry lease arrangement. Due to FAA commercial rules, you'll be able to only receive payment for the use of the aircraft, and can't supply a flight crew or fuel together with the aircraft. You will require a written dry lease agreement set up and there could possibly be negative tax consequences, so it is a good idea to talk to aviation-specific tax and legal experts before you proceed.
Be sure your aircraft manager submits the lease agreement to the FAA for acceptance and notifies your insurance company. Dry leasing your aircraft then places "operational control" into the hands of your lessor when your aircraft is being controlled by the third party, who must also consider the liability issues involved.
The vast majority of aircraft owners have a preference for the easiest method of producing revenue with their aircraft - putting their aircraft onto a charter firm's Part 135 air carrier certificate. In contrast to what you may have read, operating your aircraft on a charter certificate is essentially really straightforward and affordable. While there are several "super-sized" management companies with higher month-to-month and conformity fees, a large number of charter operators are concerned with setting up a fair structure that delivers value for the aircraft owner and a mutual business benefit.
Allowing a charter company to utilize your aircraft enables you to legally generate charter revenue and minimize your own liability in the operation of the aircraft. Most significantly, the charter revenue earned might offset a substantial part, if not all, of your operating expenses.
Chartering often is the most convenient way for you as an aircraft owner to lawfully produce revenue because you could set the terms on just how much charter revenue you want, and when you would like the aircraft available for charter operations. Most dry lessors will be expecting to have the aircraft available at their convenience, while charter operators are much more concerned about meeting the aircraft owner's desires first. Chartering will allow you to maintain use of the aircraft even while capitalizing on the use of revenue-earning flights with your aircraft.
About the Author:
Desert Jet is a full-service aviation management company that provides clients with expertise in acquiring and operating private jet aircraft, and offers on-demand charters in its fleet of jet aircraft. Desert Jet was one of the first jet charter providers in the world to become IS-BAO certified, exceeding a global industry safety standard.
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