Flying private has been a trend within the lucrative tier of the society that adds pride and honor to an exorbitant amount of cost, and the comfort, as well as time-saving, go without saying. Multi-billionaires who fly on private jets may not really own the jet themselves. There are multiple ways to fly on a private jet and it all depends on the requirements of the travelers.
While the upper crust buys private jets directly for themselves, holding full ownership of a private airplane has never been an easy task.
If you inherit a loaded bank account with a steady cash flow and have a wish to experience the affluence of a private jet, here are the available options.
Fractional aircraft ownership will be a go-to option if you are flying frequently and do not like to bear the burden of paying for the flight crew, timely maintenance, fuel surcharges, and coping with the regulatory bodies. Either with fractional or any other type of ownership, how many hours you expect to fly is a decisive question that helps to distinguish between the available options.
In a fractional jet ownership program, each fractional owner is allocated a certain number of flying hours depending on the fractional share they own. Flight hour allocation may vary from 50, the lower side of the spectrum, and up to 400 hours. Fractional shares start from 1/16th which is equivalent to 50 annual hours and a 1/2 share allocates 400 hours, which is the maximum. All the shares added must comprise a total of 800 flight hours for each jet for one year.
When you utilize allotted hours, there is no guarantee to fly in the jet you paid for. As fractional providers operate various aircraft types, aircraft allocation for fractional owners may depend on jet availability.
More importantly, at the end of the term, it is possible to sell the share you have brought to the operator at market value. If a fractional owner wishes to continue their aircraft ownership, more cost-effective options are offered by the companies.
When it comes to fractional jet ownership programs, two key stakeholders are involved:
Fractional companies like NetJets and Flexjet offer fractional programs and operate multiple aircraft under their name. The cost of the fractional jet share depends on the aircraft size and how many shares are you willing to buy. A light jet may cost you a few hundred thousand dollars and a super-mid to heavy type private jet may cost up to several million.
In private ownership, the aircraft owner is responsible for all back-end processes like aircraft maintenance, crew allocation, training, and flight management. When it comes to fractional jet ownership, the fractional company is responsible for undertaking all the said dilemmas and they stack up the costs involved as a monthly management fee.
Apart from the monthly management fees, hourly costs are there for each hour you fly. Fuel prices, in-flight catering, crew wages, and maintenance of the jet are considered when calculating the hourly fee for a specific flight. The cost may vary upon the aircraft type and the nature of the trip. When utilizing more hours, the management fees are incremented and added up to the final cost.
The first and foremost step when taking the fractional ownership route is running an assessment to decide how private air travel fulfills your travel requirements. Let us assume a fractional jet ownership program suits your travel needs.
In each fractional program, all the aircraft owners signing up to the program have to undergo a documentation process that outlines all the terms related to the deal.
This is the document related to the fractional share you have decided to buy. It dictates all the warranties related to the aircraft title and the condition, and terms associated with selling the share back to the operator. The purchase agreement outlines the necessary steps to follow in an exit strategy if the owner decided to terminate the fractional jet ownership program amidst the agreement period.
It is the go-to document in a fractional ownership program as the management agreement outlines all the required information. A fractional company is considered to be the management body and administrator of a relevant fractional aircraft ownership program, moreover, the document states the services offered to all the owners.
Management agreement states the allocated annual flight hours for the owner and how they can utilize them, especially in peak travel periods. For special private jet travel needs owners may require to use more than one aircraft at the same time or go for a specific aircraft, so restrictions and possibilities associated with such events are also mentioned in this agreement. In such events, the administrative staff of the operator works in close liaison with the flight department to offer the best possible option for the shareholders.
Additionally, variable costs and fixed costs associated with fractional jet ownership program, and the way of calculating occupied flight time are also stated within the same document.
All the private jet owners sign the master dry-lease exchange agreement allowing the use of their aircraft by other fractional owners. Due to this agreement owners get the opportunity to utilize the entire fleet of the operator not sticking only to the aircraft they own.
In case the provider has not received the aircraft, you may have to make a deposit to hold the share. Additionally, the document confirms a firm delivery date, specific aircraft type, and when the deposit becomes non-refundable. With the agreement, the operator guarantees that the price of a share will not be altered.
Selecting the perfect aircraft broker for buying fractional shares is extremely vital. Nowadays, there is a plethora of private aviation options available and most of the companies are charter operators and provide fractional aircraft ownership options as well. The services provided by the provider have to be on par with your travel requirements.
The primary service area of the operator should be considered as a decisive factor when selecting one as you may have to reach the primary service area each time you intend to take a flight. If it is located far away from your area, you may end up losing more time reaching the place, nullifying the advantage of taking a private jet or you may have to arrange positioning flights which is not a cost-effective option at all.
Customer reviews are also considered to be a key factor when deciding the service provider. It is more likely a company with positive reviews may serve you better than the one with negative reviews. Scheduling a discussion with an agent of the intended provider is highly recommended before putting your hard-earned money into any program.
Modern-day private aviation offers more viable options for the customers and it is the customer’s responsibility to sign up for the most rewarding option for the individual travel requirements. For some travelers, a charter flight may get the job done, while people with higher travel demands are welcomed to buy their private aircraft but with a significant amount of initial cost.
Jet cards are another option in private aviation and it falls between fractional jet ownership and jet charter. Leasing the aircraft is another option but packed with some additional responsibilities as the management and administration parts related to the flights are left to the lessee.
This article focused on fractional jet ownership and provided vital information that should be considered before enrolling in a fractional program with a comparison between other available options. So, let us boil everything down into a few words, always weigh the available options against the financial factor and match the travel requirements, then you will land on the best possible option that will clock up more stress-free flying hours under your belt.
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