It’s August, which means London is empty as people fly off to enjoy sunshine, sea and relaxation. And for ultra-ultra-wealthy families this doesn’t involve a delayed flight and disappointing hotel, it means skipping the security queue and jumping on a private jet to arrive at their destination unflustered and well rested. It might also mean staying on a superyacht and enjoying the waters of Saint-Tropez or Santorini in complete privacy.
It’s reported that the mean average wealth of a private jet owner is around $1.5 billion, so those in a position to own one aren’t even the 1%, or 0.1%, they’re the 0.01%. The costs associated with owning a private jet only begin with the purchase price which can be anywhere between $3 million to $90 million. Depending on the size of the aircraft the annual running costs from the pilot, ground rent, fuel, air stewards, and insurance can be anywhere between $700,000 to $4 million. Then there’s the fact that according to The Jet Business founder, Steve Varsano, (you may have seen their magnificent showroom on Hyde Park corner) most jet owners change their aircraft every four to five years.
So while the idea of flying in unhassled luxury is a very nice one, with such enormous costs involved what makes owning a private jet worth it, even for a billionaire? The answer, I think, is that while it’s lovely to be able to have a private jet on hand to take you to your holiday, the reality is that most private jet owners use it to save precious time on business travel. Not only does it enable you to skip the security queues but also gives you the flexibility to fly at a moment’s notice and take off and land in an airfield close to home and the destination. It also means meetings can be conducted during travel, in total privacy and security. That said, it’s still not a purchase most billionaires choose to make with chartering private jets and memberships to clubs being big business.
So, if owning a private plane is costly but does have its practical uses, what about owning a superyacht? I think it’s no exaggeration to say that of all the things a billionaire’s money can buy, none is more decadent than a superyacht, usually defined as being 80ft or longer. Britons actually own the second largest share of the world’s superyachts and unlike property or rare art, superyacht values depreciate so they’re certainly not a smart investment decision. For those that can afford one, they represent the ultimate in luxury, privacy and status. Head to Cannes, Positano, St Barts or Capri and you’ll probably see a superyacht, or two, out in the bay.
Eight out of the ten most expensive luxury acquisitions of all time fall in the superyacht category, led by the $600 million 180-meter Azzam, owned by Khalifa bin Zayed Al Nahyan, President of the UAE. The Azzam has 70 crew members and even its own missile defence system but is so large it can only dock at certain locations. I once heard someone say that owning a superyacht is like running a business except the balance sheet shows you in the red. The enormous costs involved include year-round employees, insurance, maintenance, fuel and dockage which in high season at the most sought after marinas can easily cost over £3,000 a night. When in use, stewards need to be hired with a ratio of one guest to one steward considered optimal. The rule of thumb is that the annual operating and maintenance costs will run at 10-15% of the boat’s purchase price.
But for those that have the means to take on all these costs, the joy of owning a superyacht lies in the incredibly private and exclusive experience it affords, highly valued by the ultra-wealthy. Increasingly, they’re also being used to explore lesser travelled exotic places where luxury accommodation is lacking, unless you bring it with you. And the other reason the ultra-wealthy might buy a superyacht? Because they can.
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