What is Fractional Ownership of Aircraft?

What is the difference between typical aircraft ownership and fractional ownership of aircraft? As the term implies, with fractional ownership of aircraft, customers purchase but a share of an aircraft as opposed to the aircraft in its entirety. The price of the aircraft is then pro-rated based on the market price of a whole aircraft (more details on sing-jets.com website)
Another term that is commonly used to pertain to fractional ownership of aircraft is “fractional jets”. Its inception began in 1986 by the pioneer in private business jet charter and aircraft management, NetJets. Back then, they were known as Executive Jet Aviation.
Other providers that offer fractional ownership of aircraft include Flexjet and Flight Options. It is also possible to engage in fractional aviation for non-jet aircraft. Such aircraft include PlaneSense’s Pilatus PC-12 fleet, Executive AirShare’s Embraer Phenom 100/300s, King Air 90/350, AirSpirit’s Cessna Citation Excels, Pilatus PC-12s, and Beechcraft King Air 90s and 200s.
Fractional ownership of aircraft changed the landscape of private aviation at an unparalleled scope due to the affordability and convenience that it offers. In fractional ownership of aircraft, an owner is entitled to 50 to 400 hours each year or a specific number of days annually. The specific terms are dependent on the share size purchased or the final agreement reached by the owners. A monthly maintenance fee is required for payment by the fractional owners. In addition to this, there is also a required “occupied” hourly operating fee. The hourly operating fee is required only when the owner is aboard the aircraft and not when the aircraft is in flight and en route to the pickup point or on its way back to the base.
Owners are granted accessibility to the entire fleet of aircraft owned by the aircraft company. It may be possible to upgrade or downgrade the aircraft for certain trips. Once the contract comes to an end, the owner can opt for either selling the share back to the company or to a prospective owner on the waiting list for a position. However, for the latter option, there may be a re-marketing fee that needs to be paid.
What are the most vital components of a fractional contract? These include:

  • Binder/Deposit Agreement
  • Purchase Agreement
  • Master Dry Lease Exchange Agreement
  • Management Agreement

What are some of the benefits of fractional ownership of aircraft?

  • One leg journeys – You only pay for the time that you use the plane. This offers a significant advantage to flying a charted plane where you are essentially covering the cost of the chartered plane’s return to its destination.
  • Consistency – In contrast to charter programs, you fly the same model of aircraft each and every time. While it may be possible to upgrade or downgrade the aircraft, that choice is entirely yours. In other words, with fractional ownership of aircraft, you are paying for familiarity and comfort.
  • Flight plans from the edge of a region or a continent – Obviously, this isn’t something you will be able to do when flying commercially.

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