How to Generate Income From Your Private Jet: The Part 135 Revenue Model Explained
Your aircraft can offset 40 to 70 percent of its annual operating costs through charter revenue. Here is exactly how the model works.
By PrivateJetNation · 5 min read
Your aircraft can offset 40 to 70 percent of its annual operating costs through charter revenue. Here is exactly how the model works.
By PrivateJetNation · 5 min read
Your private jet can generate income when you are not flying it. Most owners do not know how.
Private jet ownership has a reputation as pure luxury consumption: you buy an expensive asset, you pay substantial annual costs, and you use it for your travel. That reputation is accurate for owners who operate their aircraft exclusively under Part 91, the FAA regulations that govern non-commercial private flight.
It is not accurate for owners who place their aircraft on a Part 135 certificate and make it available for charter when not in personal use. Those owners are running a different economic model: one where the aircraft generates $400,000 to $800,000 or more in annual gross charter revenue that offsets 40 to 70 percent of operating costs.
Part 135 of the Federal Aviation Regulations governs air carrier and charter operations: commercial flights for compensation or hire. An aircraft operated under Part 135 can be chartered by the public through an approved operator. Individual aircraft owners do not typically hold their own Part 135 certificate. Instead, owners who want to generate charter revenue place their aircraft on an existing certificate holder's operation through an aircraft management arrangement.
A charter management company holds a Part 135 certificate and manages a fleet of aircraft, some of which are company-owned and some of which are owner-placed under management. When an owner places their aircraft under management, the management company handles everything: scheduling, dispatch, regulatory compliance, crew qualification oversight, maintenance coordination, fuel purchasing, and charter marketing.
Charter revenue generated by the aircraft is split between the owner and the management company under a predetermined revenue sharing arrangement. Standard splits run 75/25 or 80/20 in favor of the owner.
A midsize jet based at a high-demand airport, managed by an active charter operator, available for 250 to 300 charter hours annually, can generate $900,000 to $1.5 million in gross revenue. At a 75/25 split, the owner receives $675,000 to $1.125 million.
A midsize jet based at a lower-demand regional airport, managed by a smaller operator, and available for 150 charter hours annually, might generate $400,000 to $600,000 in gross revenue. The typical range cited by active charter management operators for well-placed midsize jets is $400,000 to $800,000 in net owner revenue annually.
Availability: when your aircraft is generating charter revenue, it is not available for your use. Most management arrangements require advance scheduling of owner trips.
Wear and utilization: charter operation generates more cycles and hours on the aircraft than private use alone.
Configuration: charter clients typically prefer configurations with high passenger capacity and standard business aircraft amenities.
Tax structure: Part 135 revenue is taxable income. A tax advisor familiar with aviation is essential before entering any charter management arrangement.
The Part 135 revenue model has been running successfully for decades at charter management companies across the country. It is not a creative financial optimization. It is a proven structure that changes the economics of jet ownership fundamentally for the owners it suits. The question is whether it fits your specific operation.
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