What is Fractional Jet Ownership and How Does it Work

Fractional Jet Ownership

Many people had their first contact with private aviation in the last few years due to the pandemic.

Given the benefits of flying with a private jet vs commercial, they are trying to figure out what is the best and the most affordable way to keep using private jets for personal but also for business trips. 

When it comes to private aviation, there are plenty of options – getting your own aircraft, leasing, jet cards, private jet charters, and fractional jet ownership to name a few.

In this guide, we’ll outline everything you need to know about fractional jet ownership – from how it works, and how much it costs, to the main pros and cons.

What is fractional jet ownership?

As the name suggests, with fractional jet ownership you own a percentage of a plane with a group of other people. You can compare it to a time-share whereby your share defines how many hours you can use a plane during the year.

Depending on a number of factors, your shares can range anywhere from 50 hours to 400 hours of flight per year. Generally speaking, you can buy the following share sizes:

Share SizeHours Per Year
1/16th50 hours
1/8th100 hours
1/4th200 hours
1/2400 hours

What is the cost of fractional jet ownership?

The cost of fractional jet ownership depends on the jet and the share size that you choose to go for. At the lower end of the spectrum, you’re looking at around $275,000, and this can go all the way up into millions. 

Of course, you do have to remember that for this price you will also own part of the plane, which – depending on the market – can appreciate or depreciate during your ownership.

At the end of the term (fractional programs are usually five years long), you also have the option to sell it back to the operator at market value.

Owners are charged a monthly fee whether or not they fly, and the often-overlooked fuel surcharges can add up to over $1,000 per flight hour. 

Monthly management fees start at about $9,000 per month. The occupied hourly fee usually starts at about $1,500.

Fractional ownership vs full ownership

When it comes to outright ownership, the most prominent difference is the price. When you’re the owner of a private jet, the costs increase significantly.

If you are calculating the true costs of whole aircraft ownership, you have to keep in mind that you have to pay for the pilots, downtime, maintenance, and fuel surcharges, all by yourself.

On top of that, you also have to organize this yourself or hire someone to do it for you. In short, with full aircraft ownership, the costs really start to stack up.

Also – when you share a private jet, it becomes harder to track you. With private ownership, anyone can track your plane using its tail number. This might be great if you’re Iron Maiden on a world tour, but less so if you’re a private business person.

How does fractional jet ownership work?

When you buy a fractional jet share, you become part-owner of a jet. In return for your money, you’ll be allocated a number of hours in the aircraft as indicated by the table above. The larger the share, the more time you have.

When you purchase your share in a private aircraft, you will have to sign the following documents:

When you purchase your share you will have to sign the following documents:

  1. Purchase Agreement. This is the document through which you purchase your fractional share from the provider. The document lists the terms under which the provider will repurchase your share.
  2. Management Agreement. This is the most important document for fractional owners. In short, this document is what you can and can’t do with your share and flight hours. With most companies, the terms of these are negotiable – so keep that in mind.
  3. Binder/Deposit Agreement. If your provider is awaiting the delivery of your aircraft, they may ask you to put up a deposit to hold your share. This document should identify the specific aircraft you’re buying the share in, guarantee that the pricing won’t change, and include a firm delivery date. Make sure you understand how and when your deposit becomes non-refundable, and that an additional acquisition cost won’t surprise you along the way.
  4. Master Dry Lease Exchange Agreement. This document governs the relationship among all the owners in the fractional shares program. Each owner agrees to share their plane with every other owner, thus enabling the fractional provider to utilize the entire fleet to service all the owners.

Disclaimer: Whenever you enter a fractional aircraft ownership agreement, it’s recommended that you hire a lawyer experienced in such deals. Aircraft ownership contracts, even with multiple owners included, are both long-term and expensive agreements.

Benefits of fractional jet ownership

If you fly a lot – at least 50+ hours per year – fractional jet ownership could be the most cost-effective private aviation solution for you. 

Also, there are other benefits:

  • you always know which aircraft model you are traveling in – so there are no surprises and you can have your familiar routine
  • you know the pilots and the crew
  • it’s a more affordable option than full ownership.

Cons of fractional jet ownership

Even though we outlined this as a benefit, for some people flying in the same plane all the time can actually be one of the biggest cons of fractional jet ownership:

  • as a fractional owner, you are limited to one airplane, and maybe this plane is not right for all kinds of trips you plan. It’s too big, too expensive for shorter trips, or it’s unable to take off from high altitudes such as Aspen.
  • you have limited aircraft availability and very often you are tied to one property
  • also, you need to discuss everything with co-owners
  • the purchased share is for a specific plane – any variations for a specific mission can bring additional costs and calculations.

Who offers the best fractional jet ownership program?

There are multiple companies offering a fractional jet ownership program. Unfortunately, without testing them or a large base of client reviews, it’s impossible to determine which one is best. 

Therefore, if you think that fractional jet ownership is something that you’d be interested in, we’d recommend contacting each of these companies and choosing the right one for you.

Unfortunately, not all companies operate worldwide. Each company has an area that they are dedicated to, as you can see in the table below. Though they might provide global flights, this could potentially cost you extra – as it’s outside their primary service area.

Fractional CompanyAircraft TypeLocations
Net JetsLight, Mid, Super-Mid, HeavyGlobal
FlightOptionsLight, Mid, HeavyNorth America
FlexjetLight, Mid, Super-Mid, HeavyNorth America
Nicholas AirLight, MidNorth America
AirShareLightMid-US
PlaneSenseLightEastern US
The Company JetLightMid-US

Most companies only operate in North America, with some even limiting themselves to mid and eastern US. If you’re looking at global options then NetJets will be your only choice. 

This lack of choice could be a huge put-off for some people, as NetJets might not meet all of your needs or requirements.

Flying with a private jet can be more affordable

As mentioned above, when it comes to private aviation, there are plenty of options and we will outline a couple of more affordable ones below.

1. Fractional jet ownership vs private charter

Private charters are perfect for casual and non-frequent flights. If you’re planning on flying a lot of hours, then Jet Cards or even fractional ownership are probably better options.

While private charters are more expensive, you do get to choose the aircraft so you can get a larger or smaller plane as required. 

Furthermore, with a private jet charter, you have a lot of added flexibility and can choose options more freely.

Fractional jet ownership vs private charter: Pros and Cons
With a private jet charter, you have a lot of added flexibility

2. Fractional jet ownership vs JetCards

A Jet Card allows you to purchase flight hours up-front and is often offered by shared ownership operators. In essence, a Jet card lies between chartered flights and fractional ownership, so the differences are less substantial. 

With JetCards you’re not tied into a long-term deal but of course, it is likely to be more expensive per flight.

3. Fractional jet ownership vs leasing

Fractional ownership can be frowned upon by shareholders due to the large upfront investment that it requires. Of course, you might recoup this at the end of your term – but investors mainly care about the current situation. 

For private use, the two are very similar, and the decision should be personal and depend on which option you’re happier with financially. The costs involved, including fixed costs, fuel costs, and even tax benefits, should all be considered.

Conclusion

Private jet travel can be expensive, and the fractional model can be the most costly option (when compared to memberships and charters). 

The plans are also complex, with multiple layers of costs that make it nearly impossible to calculate a realistic, fully loaded, bottom-line per-flight cost. 

Fractional jet ownership really comes down to two things: which one is the most cost-effective, and which one meets all of your needs and requirements.

If you need to fly occasionally and for different reasons, booking a private jet is often the better option since you can get more personalized service. You can choose the size of your jet, fly alone or with family, friends, and pets, and enjoy your privacy on your own terms.

If you have any questions or concerns, contact us and we’ll do our best to offer you a flying experience that meets your highest expectations.


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