Buying a share in a fractional jet follows the same basic principal as fractional real estate. You are paying for part ownership of a plane, and thus an allocated amount of time in the aircraft. This usually ranges between 50 - 400 hours per year, depending on the size of the share. However, there is one main difference between fractional jets and fractional real estate.
As most of the companies operating fractional jet programs have whole fleets of aircraft, you're unlikely to be using "your" plane each time you fly. It makes more sense economically for the operator to bring the closest available jet to meet you. Having an empty plane waiting on the tarmac would mean an increase in costs, which will ultimately be handed on to the owners. At the end of the program's term (usually five years), the owners usually sell their share of the aircraft back to the operating company. This price is dictated by the market place.
There are a variety of companies offering fractional aircraft ownership and a variety of planes to choose from. The two main things to decide in picking the right plane for your needs are the passenger capacity and the flight range. The larger the capacity and the longer the range the higher your costs will be.Fractional Shares
Operating time for a plane is usually 800 hours a year, and the smallest fraction is typically 1/16th or 50 hours per year. The other common ownership fractions are:
- 1/8 = 100 hours
- 1/4 = 200 hours
- 1/2 = 400 hours
Is it for me?
As we mentioned above, you need to fly privately at least 50 hours a year for it to start to make sense. Even then if you often need different sized aircraft - eg for a mix of big groups, small groups, long trips, short trips - a share might not be the right answer. Having said that many fractional programs will let you use a larger or smaller aircraft if they have different planes in their fleet.
Buying a share is typically a 5 year commitment, so if you expect your travel needs to vary significantly over this period it may make sense to look at the other options.
The costs involved in fractional jet ownership can be broken down into four categories.
- Initial capital fee, or acquisition cost, which varies based on the type of plane and the size of share you buy.
- Monthly maintenance fee, an amount that includes the pilot's salary, insurance, maintenance and the cost of keeping the plane in a hangar.
- Occupied hourly fee, which covers fuel, maintenance and in-flight catering whilst you're onboard the jet.
- Miscellaneous, includes fuel surcharges.
The initial costs can vary from a few hundred thousand dollars for a 1/16th share in a small jet, to several million dollars for a 1/4 share in a large business jet. The costs are split in a linear fashion, so 1/8 is exactly twice as much as 2 1/16's, with no discount for buying larger shares.Alternatives
There are several alternatives to fractional jet ownership, these include:
- Outright Ownership
- Aircraft Leasing
- Jet Cards or Fractional Cards
- Aircraft Charters
- Charter Cards
- Air Taxis
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