Should Fractional Jet Owners Sell Their Shares?

James Butler Delivers the Painful Truth on Declining Share Values

Bethesda, Maryland • January 2009

In a recent contribution to Halogen Jets, private air travel authority, James Butler, tells fractional owners that now may be the time to sell. “Share values are beginning to fall,” says Butler, “but it’s likely that the worst is yet to come.”

Tight credit, slowed sales and fewer flights are raising questions about the long-term viability of some fractional providers. In addition, Butler sees some fractional companies trying to delay repurchasing shares in an effort to hold on to capital. “Indeed, we recently had a client for whom we were contesting a low repurchase offer opt to take a bit less in exchange for an expedited closing.”

Butler explains that this is a pivotal moment in the fractional jet share market, “[T]he market for preowned aircraft is in gridlock — many sellers aren’t willing to accept lower prices while buyers are sitting on their hands waiting for prices to fall further…For now, relatively few preowned sales are occurring. So, if you’re selling…, the declining prices aren’t yet reflected in comparable sales that will be the basis for valuing your share.”

Butler’s final thought: “[T]he wiser course may be to sell your share before its value declines precipitously, reclaim your capital investment and use other private flying options like fractional jet cards that allow you to fly on the same fractional fleet or even traditional jet charter (there’s a lot of excess capacity out there so rates should be favorable). This way, when the dust settles, you can reassess your needs and budget without being stuck with a long term commitment.”

For more information on why now may be the time to sell your fractional share, download the full text of this article below.

Halogen Guides Jets: “Should Fractional Jet Owners Sell Their Shares?”

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