What is Fractional Jet Ownership? A Definitive Guide To Everything You Need to Know

By Andrew Myers

January 21, 2020 Educational

It's no secret that private jet ownership is one of the most significant transportation expenses you'll incur. Thankfully, you don't have to be a billionaire to have your jet at your disposal when you need to head off on an unplanned business trip. If you're not sure whether a private jet is an expense you're ready to take on, then fractional jet ownership is a popular option. Not familiar with fractional jet ownership or how it works? Read on to learn all about it!

What is Fractional Jet Ownership?

Think of fractional jet ownership as something comparable to a timeshare. Instead of paying for the entire jet, you buy part of the ownership interest in a specific plane in exchange for a particular number of flight hours per year. Fractional ownership is similar to a timeshare in that you are not just buying the quarter share of the aircraft, but the crew, insurance, and logistics of ownership are all bundled. Fractional ownership allows you to fly in a newer aircraft without having all of your capital tied up. It also provides resources, like a concierge and the ability to move up into a larger aircraft for a trip or two.

How Does Fractional Jet Ownership Work?

In fractional jet ownership, up to 64 shares are sold or available for purchase on a specific plane. Fractional aircraft owners rarely fly on "their" aircraft, but instead, you will fly on a like-kind. Don't worry, they all look the same anyway. That means that fractional jet ownership is best for people who fly at least 50 hours per year in the same size plane. If you anticipate needing to fly on a variety of different sized planes, then fractional jet ownership may not be your best option. When you commit to fractional jet ownership, expect to have a period attached to your contract. Most agreements require a five-year commitment, though there are agreements that allow for shorter periods. Exiting is also limited to renewal, or you can opt to sell the share at which point an appraisal is required to determine the value. Most fractional providers will allow three separate appraisals (hopefully one of the three is by VREF) to be ordered so that there is no bias. Costs vary depending on the number of owners and the size of the jet.

How Does It Differ from Chartering a Jet?

The significant difference between chartering a jet and fractional ownership is the. When you charter a plane, you only pay for the hours you book plus membership fees, but when you have fractional ownership, you pay for the flight hours, whether you use them or not. For most potential fractional owners, the fear is in overflying, not under flying. If you overfly your allotted hours, then charter may provide a cheaper route as there are no hidden penalties. Read the fine print! That means that fractional jet ownership is a perfect option for people who find themselves chartering the same aircraft week after week. But if your flights are more sporadic, then chartering might be a less expensive option.

Ready to Spread Your Wings?

There's nothing like having the convenience of your own jet to take you where you need to go. Whether you're interested in fractional jet ownership to help make business travel more efficient, or if you're planning your dream trip to Bora Bora, it's a great way to have pride of ownership without the finances of Bill Gates. You are now boarding for a trip to a life of luxury! Want to stay up to date on everything about private jet ownership? You're in the right place. Check out our jet valuation guides software and subscriptions for everything you need to know!
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