PRIVATE JET FRACTION OWNER - WHAT IS IT & SHOULD I START?
Written By Lance Tweden | 12.01.21
Private air travel is convenient and comfortable, but there are several kinds of potential ownership. There are four scenarios: full ownership, shared ownership, fractional ownership, and charter.
All of these come with their fair share of advantages and shortcomings. To make an informed decision about the kind of ownership that suits you best, you need to understand how they work.
This guide will discuss private aircraft fraction ownership and how it compares to charter and jet cards.
What is Fractional Ownership?
Fractional ownership, as somewhat evident, is a term for fractional ownership of a jet, where the cost of purchasing, operating, and leasing the aircraft is shared among multiple owners.
Some commercial fractional ownership programs include AirSprint, NetJets, and FlexJet.
In fractional ownership, the customer - which is referred to as an owner - buys a share of the jet instead of the whole aircraft. Depending on the number of owners and their respective share sizes, each owner has access to the aircraft for a certain number of hours or days per year.
The length of the fractional ownership contract is typically five years. Once the contract period ends, the owners can resell their shares to the company or another potential owner.
Owners also have to pay a monthly maintenance fee for the aircraft. This fee covers the following fixed costs, among others:
- Pilot compensation
- Aircraft storage
- Regular refurbishment
- Pilot training
- Inspection and maintenance
Besides these costs, the owners' money covers the per hour charge for their allotted ownership of the aircraft for the year.
Documents Signed for Private Jet Fraction Ownership
When an individual buys a fractional jet share, they sign multiple documents. But these are the three major ones:
- Purchase Agreement: The document specifies the terms and conditions of the purchase.
- Management Agreement: It establishes the level of service and conditions the fractional program will offer to the owner.
- Owner Agreement: All shared owners of a private jet have to sign an agreement.
How Much Flying Time Do Fractional Owners Get?
The number of flying hours an owner gets per the private aircraft fraction ownership agreement depends on their share in the aircraft. Here is an estimated number of hours owners get according to their share size.
Flight Hours | Year Share of Aircraft
- 50 | 1/8
- 100 | 1/6
- 200 | 1/4
- 400 | 1/2
- 800 | 1/1
As evident, the flying hours of an owner increase with the size of their share. It makes perfect sense since the fewer shareholders an aircraft has, the more available it will be for each party.
Benefits of Private Jet Fractional Ownership
Private jet fraction ownership can be quite beneficial for people who often travel for work or leisure. Here are some advantages of fractional jet share:
- Privacy: Because of the ADS-B mandate, fractional ownership offers more privacy than full ownership since competitors and the media cannot track you by tail number.
- Convenience: With partial ownership, you do not have to worry about managing, staffing, or setting up the crew. Plus, there is no headache in training pilots or managing the staff. Everything is done for you.
- Parking Space: When you have a fractional jet share, you do not need to worry about parking space or hangar, whether at an airport or home base. Parking can be a pain to find during the holiday season, but private aircraft fraction ownership means you always have provisions from the ownership program.
- Backup Availability: If you are a complete jet owner, you might have to delay or even cancel your flights when the aircraft is unavailable due to maintenance issues. Meanwhile, fractional providers offer backup aircraft in just a few hours.
- Experienced Pilots: When it comes to air travel, safety should be paramount. That is another benefit of private aircraft fraction ownership. The pilots are sufficiently trained and have expertise at flying into airports you frequently fly to.
Should You Buy a Fractional Jet Share?
Buying a fractional jet share comes with its many advantages, but that does not mean every traveler is prepared for this commitment. You should only consider fractional-type ownership if:
- You are eligible to use depreciation deductions for a capital asset. However, for this, you have to show the private aircraft fraction ownership on your company's books.
- You are ready to take the risk of fluctuating operation costs. Plus, you do not mind the risk that your aircraft share's value might change substantially during the contract period and could be much lower by the end of five years.
- You have a significant amount of capital to buy a fractional jet share.
Most importantly, you should only buy fractional-type ownership if you trust the fractional program operator to be reliable and have terms in the agreements that go in your interest.
Alternatives to Fractional Ownership
As discussed above, private jet fractional ownership is not the only way to ensure instant access to air travel. Here are the three other methods:
- Full ownership
- Private charter
- Shared Ownership
Shared and fractional ownership could be considered similar in that they involve partial ownership of a jet. However, fractional ownership is overseen by a fractional program, while shared ownership is often between business partners, spouses, or friends.
Private Jet Charter
Private jet charter refers to chartering a jet for private air travel. In most cases, it is a one-time thing unless you have a membership, such as the Jet Card Memberships.
Jet Agency's membership program gives you a convenient pay-per-hour service without any hidden or hassle-filled pricing. Plus, you get a lot of perks, such as complimentary catering and jet upgrades.
As for private jet safety, Jet Agency is on the top of its game with WYVERN safety records, WYVERN PASS reports, and ARG/US audit reporting.
Since you have a membership, there is always a jet at your service in just a few hours. Jet Agency meets all your needs without you telling them twice.
Fractional ownership gives you limited access, depending on your share in the aircraft. Meanwhile, membership is more flexible, sometimes even allowing you to roll over unused hours from one year to the next.
Aside from memberships, here are some general pros of a private charter as compared to fractional ownership.
- Customization: With a private jet charter, you can get all the amenities of your choice, from cuisine and entertainment options to the jet interior. So, you can genuinely personalize air travel for your needs and preferences.
- No Commitments: If you opt for private jet fraction ownership or full ownership, you must be highly committed. Along with paying monthly maintenance fees, you will also have to sign contracts with the fraction provider. On the other hand, a private charter does not require any commitments.
- Attractive Round Trip Pricing: If you make a round trip, you are likely to find attractive round trip pricing from a local operator. For instance, Jet Agency has a Fixed Route Program that offers a flat rate for individuals who occasionally travel on the same route.
- Versatility: Being a fractional owner for a jet, you will most likely only have access to that aircraft unless your contract states otherwise. But with a private charter, you can get a plane for your immediate needs. For instance, you can choose a larger jet to fly your whole team or a private bedroom if you are traveling with your spouse for vacation.
- Different Cabin Experience: You will have the same cabin experience every time if you have a fractional jet share. Also, you will not have to worry about any new pilots flying the plane. With a private charter, the experience varies on each trip.
- Restrictions: Operators that provide private charter may have specific limitations. For instance, you might not be allowed to take your pets along.
In full ownership, you are the sole owner of the jet. Here is how it compares to fractional ownership:
- No Restrictions: Full ownership is the most liberating form of jet ownership since you are not bound by a contract or an operating company's guidelines.
- Availability: Since you own the aircraft, you can travel whenever you want, even in the peak air travel season when charter companies are often all booked up.
- No Cap On Hours: There is no cap on the number of flight hours you can enjoy in a year with full ownership. It is your jet. Travel as much as you want. On the other hand, you will have to purchase incremental hours if you max out your allotted hours in private jet fraction ownership.
- Last-minute Difficulties: If there is a maintenance or technical issue, you would have to delay your flight. Meanwhile, charter companies always have backups on hand.
- Maintenance Duties: You are responsible for hiring a crew, training pilots, and doing all the required work to keep a jet in optimal condition.
Enjoy the Perks of Private Jet Charter
If you are not yet ready for the commitment that comes with private jet fractional ownership or simply want to experience a new jet each time, you can count on Jet Agency to facilitate safe and hassle-free air travel for you.
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