Should You Consider Getting a Fractional Jet Ownership?

by Richard Zaher / Feb 02, 2012

Fractional ownership

There are many options for private jet fliers both in the US and internationally, from direct on-demand jet charter to aircraft ownership. One popular option is fractional jet ownership. Many aviation companies advertise it heavily and in some cases it can be very attractive. But what exactly is fractional ownership and why should you consider it?

The first fractional jet ownership company to come on the scene was NetJets. According to their story, they were formed because while the convenience and flexibility of owning an aircraft made sense, the finances did not. 

Indeed, aircraft ownership is very expensive. Beyond the multi-million dollar cost of purchasing a jet, further multi-million dollar costs of owning a private jet add up. From crew and maintenance staff salaries to hangar costs, maintenance bills, not to mention the high hourly rate of flying your jet for a given number of hours per week. Altogether, these expenses make for a very costly option. 

NetJets was created for people who are considering aircraft ownership, to give them an option to pay many of these costs on an annual basis instead of locking themselves into long-term aircraft ownership.

However, many private jet charter customers have found that chartering aircraft on a case-by-case basis is actually more convenient and more cost-effective than aircraft ownership or fractional jet ownership. 

How Does Fractional Jet Ownership Work?

As a NetJets client you would buy a share of an actual, existing aircraft. You can start out with 1/16th of an aircraft, and work your way up from there. You have to start out with a 5-year commitment but could get more if you want. There is a large upfront fee that you pay for this ownership, starting at about $200,000, based on the age and size of the aircraft you are buying. Therefore, for the $200,000 you would be able to buy a 1/16th share of an older Citation Ultra

There is a monthly fee that covers maintenance and crew costs, and then there is an hourly charge that is applied to each trip. So while the hourly occupied rate of the aircraft sounds good, you must break the entire cost down to get the true hourly rate. When all this is added up, it comes to a cost about double the hourly rate of a standard charter.

While you do own a portion of an aircraft, you will probably never see or fly on that aircraft. You will be flying on an aircraft of the same make, or similar make in the same class. You will be guaranteed an aircraft if you give notice 10 hours in advance. The flight crew and aircraft will be high quality and will provide great, reliable customer service.

Fractional Jet Ownership vs. Private Jet Charter

In contrast, private charter flyers who come to Paramount Business Jets pay only one price, the cost of a trip on a pay-as-you-go basis. For instance, for 50 hours of flying on a light jet our clients would pay around $150,000. Our clients receive top-notch, Wyvern reviewed aircraft at an hourly rate discounted lower than the standard retail price. They will be able to make savings on one-way and empty leg flights when they apply and have access to solutions for all trips no matter what the need. The aircraft are reviewed and selected per the client’s needs and desires.

Whether on a budget for a specific trip or looking to fly in the highest luxury on a premium jet, you will have thousands of aircraft to choose from. Every operator we work with must provide the utmost professional and high-quality flying experience because they don’t have you (or us!) locked in for the next 5 years. And instead of 10 hours, you only need 4 hours to get an aircraft booked with us.

Final Considerations

Fractional jet ownership was created for customers who are really keen on buying their own jet. And ready for the high cost of fractional ownership. If you speak to jet charter customers, you will find that many of them have owned jets before. 

In the end, booking a jet on a trip-by-trip basis turns out to be a much more financially practical option for almost any situation. You will receive the same sort of outstanding customer service and aircraft availability but with significant savings and a wider offer. 

In the end, if having read this article you are still considering getting a fractional jet ownership, feel free to call us and speak with one of our aviation consultants about fractional ownership leverage.

About Richard Zaher

Richard Zaher Richard Zaher is the founder and CEO of Paramount Business Jets. He is a pilot and the President of Air Charter Association of North America (ACANA). Richard is a graduate of Embry Riddle Aeronautical University (ERAU) with a Bachelor of Science in Aerospace Studies. A seasoned international jet charter expert, entrepreneur, humanitarian, and the recipient of the Embry Riddle Eagle Excellence Award at the 2012 National Business Aviation Association (NBAA) convention. He is also an active member of the Aircraft Owners and Pilots Association (AOPA) as well as several safety and air charter organizations.

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