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FRACTIONAL OWNERSHIP
Fractional ownership is particularly appealing for those who require the benefits of private jet travel but cannot justify the cost of full ownership or do not have the time or inclination to manage the complexities of owning an aircraft outright.
Fractional ownership is a method of aircraft acquisition and utilization where multiple individuals or organizations share the cost and access to a single aircraft. This approach allows for the benefits of private jet ownership at a fraction of the cost of sole ownership. Here's a breakdown of the key aspects of fractional ownership:
OWNERSHIP STRUCTURE
- Shared ownership of an aircraft among multiple parties.
- Each owner buys a "fraction" or share of the aircraft, entitling them to a specific number of flying hours per year.
INITIAL PURCHASE COST
- The cost is proportional to the size of the share purchased.
- Shares are typically offered in increments, like 1/16th, 1/8th, 1/4th, etc.
OPERATING AND MANAGEMENT COSTS
- Owners pay a monthly management fee that covers fixed costs like crew salaries, insurance, and hangar space.
- There is also an hourly fee for actual flight time, covering fuel, maintenance, and catering.
FLIGHT TIME AND SCHEDULING
- The number of flight hours per year is based on the size of the share.
- Owners book flights in advance and can request specific aircraft types.
AIRCRAFT TYPES AND ACCESS
- Fractional programs usually offer a range of aircraft.
- Owners might have access to the entire fleet, allowing them to choose the best aircraft for each trip.
PROFESSIONAL MANAGEMENT
- The fractional program handles crewing, maintenance, logistics, and administration.
- Ensures regulatory compliance and safety standards.
FLEXIBILITY AND CONVENIENCE
- Offers much of the convenience of whole aircraft ownership without the full burden of management.
- Owners can fly on short notice and reach destinations not served by commercial airlines.
TERM AND EXIT STRATEGY
- Contracts typically have a fixed term, often 5 years.
ADDITIONAL SERVICES
- Many programs offer extra services like catering, ground transportation, and concierge services.
COST-BENEFIT ANALYSIS
- Ideal for individuals or companies that fly enough to justify the expense but not enough to warrant whole aircraft ownership.
- More cost-effective than chartering for a certain number of flight hours per year.
TAX AND FINANCIAL CONSIDERATIONS
- Potential tax benefits depending on jurisdiction.
- Depreciation and other financial aspects can impact overall cost.
NETWORK ACCESS
- Some programs provide access to a global network of flights, increasing the utility of the ownership.