By Vincent Wigmans
Most private jet owners know that, on average, 35% of the annual operating costs of a private jet is for maintenance. During the purchase of a private jet, you can easily calculate with upcoming standard maintenance inspections. But there will always be a level of unpredictable cost, for this kind of unpredictable cost you can set up an Hourly Cost Maintenance Program (HCMP). These HCMP’s are especially designed to give owners/operators peace of mind.
How does a HCMP work during a private jet sale?
As everyone knows, an unexpected maintenance event is inevitable when you are operating a private jet. Therefore, most of the original equipment manufacturers (OEM) have an HCMP in place for aircraft owners. During a private jet sale, you often see the terms: enrolled in TAP, ProParts, JSSI etc. which basically means that they have a HCMP in place. Aircraft that are enrolled in a program, do have a higher value then aircraft without an HCMP program. When there is no program in place, you can enroll your aircraft into a program. You must pay a one-time enrollment fee to add your aircraft to an HCMP. This enrollment fee depends on the manufacturer, age, and model.
As an example, to add an older Cessna C525 CitationJet into an engine program, this can go up to $500k. Next to this one-time fee, you will pay an hourly cost of $185 per engine to the program holder. If an aircraft is already enrolled in an HCMP, you can take over the program (mostly in the purchase price) and pay only an hourly cost. Adding your aircraft to an HCMP means that the operator/owner has predictable maintenance cost and less risk.
Operating a private jet can be very expensive, but you can choose to mitigate the maintenance cost to enroll in an Hourly Cost Maintenance Program. The enrollment and hourly costs depend on the level of coverage and expected utilization of the aircraft. When enrolled in a program, most cost for scheduled and unscheduled maintenance will be paid by the program holder. Only the cost of coverage depends on the coverage you selected from the HCMP.
The biggest advantage when enrolled in an HCMP is that you have a predictable maintenance budget annually without any big outliers. Also, the downtime for a maintenance stop will be less as you don’t have to negotiate costs and get spare parts (even a loaner engine) more easily. This results that you don’t have to hire another aircraft for a longer period.
If you want to buy a private jet, it is always good to look for one with an Hourly Cost Maintenance Program, not only do you know that there have never been any corners cut due to the costs. It also gives you piece of mind if you overlooked something during the pre-buy inspection.
If you are thinking to buy a private jet and need assistance, please let me know, and I would be happy to assist. You can reach me at email@example.com .