The Fundamentals of Fractional Ownership

James Butler Demystifies This Private Air Travel ‘Staple’

Bethesda, Maryland • September 2008

In a special “Buyers’ Guide” edition of Business Jet Traveler, Shaircraft CEO, James Butler, explains the basics of fractional ownership to help you determine if it’s your best option.

Butler emphasizes the key components of any fractional jet program:

  • You purchase a partial interest in an aircraft that an aviation company operates.
  • You have the right to use any comparable aircraft in the company’s fleet for a predetermined number of hours each year.
  • Your operator manages the aircraft and the rest of the fleet.
  • You call a few hours ahead to schedule a flight.
  • At the end of your investment (usually 5 years), your provider is obligated to repurchase your share based on the then fair market value of your aircraft.
  • Your costs include the purchase price for your share, ongoing management fees, and charges for each hour you fly.

Is fractional the best solution for you? Butler explains, “The general rule of thumb is that if you fly fewer than 50 hours per year, jet cards or charter may be better options; and if you fly more than 400 hours per year, purchasing a whole aircraft may be the way to go. If you’re in between, fractional may be the way to go, but the number of hours you fly is only the starting point of the analysis.”

Butler goes on to explain other key considerations as well as the pros and cons of fractional jet ownership. He concludes with some cautionary advice, “Remember, in the private air travel business, a mistake can cost you hundreds of thousands, if not millions, of dollars.”

To read the full discussion of fractional jet ownership, download the full text version of this article below.

Business Jet Traveler: “The Fundamentals of Fractional Ownership”

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