Monday, May 19, 2008

In the steps of Morgan

In the late 1920's, JP Morgan bought a Grumman Goose to commute from Newport RI to New York. Ironically, SoCal real estate prices are so high its now cheaper to buy a distance away and commute in via aircraft!

The modern day equivalent is now available. Due to the extreme home prices in Santa Monica, its now cheaper to buy a jet and fly in daily than it is to purchase a nice home in Santa Monica. I speak of the Eclipse 500, with its $400/hour operating costs (less if you self pilot, more if you insist on twin pilots). I wouldn't spend $1.2M to buy one, rather it would be wiser to purchase a fractional ownership and pay per hour costs. Why not. You fly 8am to 8:30am in, and then someone else rents the thing to fly in/out and then another aircraft is ready for you at 5/6/7pm (whatever your normal work day is).







During the last bubble, quite a few of my coworkers started to commute via aircraft. They bought homes out in the IE around an airfield. But note: it was almost an excuse with their wives to be able to buy planes. ;) But they did it and have never regretted the decision. Ok, they carpool at today's oil prices, but otherwise this decision has been to maximize their stick time. Now home prices are so out of hand it is economical to commute via prop plane. For high end buyers, via jet!

This market has a long way to go until its sane.

Ps: I'm happy the FAA stepped in and kept jets at the Santa Monica airport. Killing off transportation kills off business.

Got Popcorn?
Neil

6 comments:

Michael said...

Why spend the money for fractional ownership when you can get a zero-down stated-income jet loan at a 1% teaser rate for 3 years? It's the American Dream. Every family should be able to have their own jet.

You can even get a JELOC to pay operating costs! Fly for free!

Jets, after all....always go up!

marco said...

Yeah Michael is right we should not spend the money for fractional ownership
downtown toronto condos

wannabuy said...

lol

Jet's only go up?

Got Popcorn?
Neil

tj & the bear said...

One of my past clients is a subcontractor on the Eclipse; they expect to sell'em like hotcakes. I believe'em... would love to have one myself.

Neil, maybe we can partner on one in a year or two? ;-)

wannabuy said...

Neil, maybe we can partner on one in a year or two? ;-)

lol. I love the idea of these small jets. Why not three? ;)

Got Popcorn?
Neil

Angelique said...

LOL, Michael.