Understanding Fractional Aircraft Ownership

If you find yourself in the sky more than on the ground, you already know the hassles of flying commercial. Delayed flights, ever-increasing prices, lack of availability of upgrades…need I go on?

To avoid these hassles, many frequent travelers are using fractional aircraft ownership. But what is it, and should you consider it too?

What is Fractional Aircraft Ownership?

Rather than buying commercial airline tickets every time you fly, becoming a fractional owner of an aircraft gives you access to private planes when you need them. 

A pilot and crew are provided for every flight, and the program manager handles all administrative activities. These activities include maintenance, restocking supplies, refueling the plane, and myriad other activities that happen behind the scenes that you don’t want to worry about.

Typically, you can purchase shares in multiples of 1/16, and the number of hours you can access the plane will be based on the agreement among all owners of the plane. Generally, you can expect to access about 50-70 hours of plane time per year.

Fractional aircraft ownership programs may have agreements specifying the service areas included in the contract. Flights outside of these areas may incur additional fees.

So why consider fractional aircraft ownership? For many, the cost of fractional ownership is lower than purchasing a private jet and having to hire staff. And you aren’t competing for access to a single aircraft. Because fractional aircraft ownership gives you access to a fleet of aircraft, availability is usually reasonably open.

Fees for Fractional Aircraft Ownership

Becoming a fractional owner of an airplane isn’t going to be a cheap endeavor.

Let’s start with the largest fee here: the purchase price. Some companies charge about $550,000 for a 1/16 fraction of an aircraft for a period of five to 10 years. Others charge more, in the ballpark of $1.7 million.

You’ll also have an annual management fee, which could be $10,000 a year or more.

Additionally, you will pay by the hour for the actual time you fly. These costs can be about $2,000 per hour. If you have 50 flight hours per year, this cost is $100,000 annually. There may also be additional fees charged to fly out of the designated area or to travel during peak periods. 

It’s important to consider all these costs, and any others that might pop up when reflecting on whether fractional aircraft ownership is a suitable investment for you.  It might not be an investment that's cheaper than flying first-class commercial flights, but it is an investment that will provide all the benefits of private flights without having to own a plane outright.

Pros of Fractional Ownership

So, what are all those benefits of buying a fraction of an aircraft? Depending on how often you travel, the costs might not be that high. Also, consider the time you’ll save by not having to drive to and from a major airport, wait in security lines, or sit in the airport for layovers. Whether you’re traveling for business or pleasure, this is time better spent elsewhere.

Most programs guarantee plane availability, given that you make your request within a certain timeframe (like eight hours or more). This ensures that, even at the last minute, you can count on reaching your destination on the other side of the country without paying a premium for a last-minute corporate flight ticket.

Plus, being a plane's sole owner comes with a lot of extra expenses and responsibilities, like staffing your flight crew, catering, and maintenance. With fractional ownership, you don't have to worry about any of that!

Private planes can fly into and out of smaller airports, meaning you don’t have the hassle of going to the nearest commercial airport, finding and paying for parking, and then navigating your way to your aircraft. Nor will you have to deal with security lines. And often, these little airports are closer to home and more convenient than the larger ones.

Another benefit? You can schedule flights on your timeline, not a commercial airline’s. If you want to fly to Duluth at midnight, your captain and crew will be happy to oblige. Try getting that from United!

Cons

Fractional aircraft ownership isn’t cheap, and the cost may deter you. While  you’ve seen the bulk of the fees you can expect to pay, others may arise, making the cost even higher. If your flying needs vary throughout the year, you might not get enough value from a fractional ownership program.

Exiting a fractional program can be tricky.  Some have policies that prevent you from selling shares to third parties, requiring you to instead sell your shares back to the program manager at a surrender price after one year. You may not have control over the price that you get.

It’s also important to consider that the value of your ownership can fluctuate, given the demand for the type of aircraft you have ownership of. If the value has dropped significantly, selling your shares may not help you recoup much of your initial investment. 

Alternatives to Fractional Aircraft Ownership

If the idea of shelling out a cool million to fly makes you break out in a sweat, here are a few other options to fly private.

Private Jet Ownership

If money is no issue and you just want more control over your flight and the maintenance of a plane, you might buy your own. Private jets can cost $2 million or more, but you’ll maintain full control over how things operate. You can hire your own crew and have them on call when you need to fly.

Jet Card

Jet cards are like pre-loaded credit cards that give you a certain number of flight hours redeemable  with an aircraft fleet. By buying hours in bulk, you can save on the per-hour cost versus chartering a private plane.

The cost, which can be about $150,000 to $350,000 for 25 hours of flight time, may be higher than the per-hour cost of fractional aircraft ownership, but if fractional ownership is more than you need, the jet card option may be a wiser financial move.

Charter a Plane

If your flight needs are sporadic, you may be better off chartering a plane. The cost can be $1,200-$10,000 per billable flight hour, which sounds like a lot, but if you’re traveling with several people, you’ll likely spend less than you would on first-class tickets for the group.

Final Thoughts

Fractional aircraft ownership is ideal for the frequent business traveler who delights in privacy, a luxury experience, and having more control over the flight details. Fractional ownership allows the flexibility and availability of a private jet, managed and maintained by professionals, with none of the hassles of outright ownership. But be sure to weigh the costs and commitments against your specific travel needs and budget. Ultimately, the choice depends on your individual travel frequency, financial considerations, and the value you place on the unique benefits of private aviation.