Frax Market Blues

James Butler Sounds Off on the 'Continuous Tug of War' between Fractional Owners and Jet-Card Members over Aircraft Use

Bethesda, Maryland • November 2006

Quoted by NBAA Convention News, Shaircraft CEO, James Butler, justifies fractional owners' concerns over the effects of jet-card programs on fractional service. He explains, "Common sense tells you that accommodating 32 jet-card members per aircraft is more difficult than servicing eight owners."

Butler points out that while some providers have addressed this concern by limiting growth in their jet-card programs, "...owners are still disenchanted that the extra hours flown on their aircraft to service jet-card holders are reducing the value of their aircraft, while the providers keep all the jet-card revenue."

Addressing owners' concerns over increased costs, such as fuel surcharges, Butler suggests, "Owners appreciate that fuel prices have increased, but they don't understand why the providers use below market base rates and owners are wary that fuel surcharges are becoming profit centers." He adds, "A more straightforward pricing approach that is based on the providers' actual costs and includes a reasonable management fee would...be welcomed by most owners."

To discuss how jet-card programs may be impacting your fractional investment, or other aspects of your particular contract, please contact James Butler for a complimentary, private consultation. All columns are available in the Shaircraft Newsroom.

Fractional Ownership: "Frax Market Blues: Share owners and jet-card members face contentious tug of war over aircraft use"

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