Private flights are no longer reserved for the celebrities among us. More and more accomplished individuals are turning to air charter services for their air travel, and fractional ownership is a driving factor behind the movement toward luxury air travel.
What is Fractional Ownership?
Fractional ownership is the purchase of a private aircraft divided among many buyers. It was a concept that took shape in 1986 when Richard Santulli, a former math professor at Brooklyn Polytechnic and principal at Goldman Sachs noticed the underused nature of many wholly owned private jets after his purchase of Executive Jet.
In a fractional ownership agreement, multiple owners essentially share the responsibilities of owning a private jet under the pretense of sharing flight hours. The goal being: a more affordable private jet experience without the wasted availability.
It’s Worth Your Time and Your Money
According to the National Business Aviation Association, people who fly more than 250 hours per year should consider buying, or buying into, a private jet. From a cost standpoint, purchasing commercial airline tickets is still cheaper overall, but taking into consideration the amount of time saved, a strong case can be made for the cost-effective nature of ownership.
Who Can Take Part?
Anyone can buy in. Fractional ownership is not reserved for any particular groups or individuals. It’s becoming increasingly popular amongst those who are particularly successful in their industries and (understandably) those who travel often.
What Are The Advantages?
The fractional ownership model has opened the doors for more and more people to travel privately/via chartered air. Therefore the advantages of private ownership mirror those of the advantages of air charter travel in general, but include a few others too:
No aircraft management
The accessibility of owning a private jet — flexible flight times, luxurious travel accommodations–but without the aircraft management and aircraft maintenance that comes along with private ownership. Rather, the responsibility of aircraft upkeep is shared equally amongst all owners, who cover any incurred expenses with a combination of annual fees.
Access to technology
Private aircraft are equipped for business travel. Not only are flights shorter, making business travel more efficient, but many private jets are equipped with business resources and accommodations such as conference rooms and fax machines, among other amenities.
Inflight comforts, without the crowded cabins
Most (if not all) fractional ownership aircraft come equipped with such inflight luxuries as a full bar, sleeping accommodations, and inevitably, a more spacious, less occupied main cabin. There’s typically room to spread out, if not walk around, during the flight.
No long security lines
Security lines can be a nightmare–especially lately! Even with TSA pre-check, air passengers are subject to long and painful security lines. Fractional ownership eliminates the wait time with privatized security proceedings.
Access to nearly 5000 airports across the country
Commercial airlines have access to only about 500 airports nationwide, therefore, there are fewer limitations in terms of desired destinations.
Faster, less turbulent flights
Private jets tend to be more sophisticated in terms of their design and as a result are able to fly at higher speeds and altitudes. Most can fly at up to 50,000 ft, allowing for smoother travel and eliminating air traffic jams.
Simplification of flight in general
Flights are not limited to seat availability, specific routes, or predetermined flight times. Even if the owned jet is not itself available, a substitute aircraft will be used if the need arises. Therefore, flight restrictions are nearly nonexistent and the flight process quite smooth.
Last minute travel
A fractional ownership aircraft can be ready for departure at just 4 hours notice. Though still not encouraged, booking last minute fractional ownership flights won’t carry with it any of the hassle or added expense of commercial flights.
Fractional Ownership is Trending Up
Perhaps the perks are becoming harder to ignore, or perhaps they are simply becoming more widely known, but recent fractional market performance would indicate an increase in fractional ownership.
According to Aviation Week, over the past two years, the number of business aircraft in use has been on the rise. They assert that this growth is a product of increased industry confidence paired with longer term factors such as GDP growth and continued wealth creation.
These market conditions have resulted in a buyers’ market when it comes to aircraft purchases. Prices are at an all time low.
Market indicators such as these may account for the recent uptick in fractional ownership, since fractional ownership is possibly as accessible now as it will ever be.
Shared Cost, Shared Utilization
Often likened to a property timeshare, fractional ownership allows for a maximization of resources.
Privately owned planes are often left unused for periods of time if the owner is not personally using the aircraft, so by dividing the flight hours amongst a number of owners, individual aircraft see more air time, therefore eliminating any unjustified expense.
In today’s sharing economy, the growth of fractional ownership is unsurprising. The model results in all around improved speed and efficiency in air travel.
Where Does Fractional Ownership Fall Short?
Fractional ownership is growing in popularity and accessibility but doesn’t come without a few drawbacks of its own.
For one, fractional ownership arrangements can be more expensive than traditional chartered flight models. Many include membership fees, maintenance fees, and operating fees among other added expenses like a fuel surcharge. Plus, flight hours are not unlimited (rather, they are based on the fraction of the aircraft that is owned).
Scheduling has also become an issue, if minor. While the occurrence of empty flight legs has lessened with fractional ownership, there continues to be room for improvement in scheduling efficiency. In addition, the original fractional ownership model was based on ¼ ownership, but the model has since developed into a 1/16 or 1/32 model–though cheaper, this makes for scheduling difficulties, especially on peak travel days.
Despite these few minor drawbacks, fractional ownership appears to be on the rise as private flight is becoming a reality for the public.