Fractional Jet Leasing

Do you frequently travel by private jet? Perhaps you have been using charter services so often, that you are considering purchasing an aircraft of your own. This represents a big outlay, and one which requires much thought. Fortunately, in today’s market a third option has become increasingly common. In this article, we will weight up the pros and cons of Fractional Jet Leasing.

What is Fractional Jet Leasing?

With Fractional Jet Leasing, multiple “owners” share the costs of buying, leasing and operating an aircraft, rather than purchasing one for themselves. Each individual’s contribution will be pro-rated, based on the market value for the full aircraft. The owners are guaranteed a fixed number of hours or days usage annually, either for the specific plane or a similar model in the operators fleet, which can be availed within just a few hours’ notice.

Fractional Jet Leasing - Private Jet on Runway

Fractional Jet Leasing offers you access to a fleet of aircraft which can be prepared for take-off with minimal notice.

The breakdown of the charges applied in fractional ownership will usually include a fixed monthly maintenance fee and an hourly operating fee for when the aircraft is “occupied” (charged only when an owner or guest is on board, not for “empty legs” when the aircraft is traveling to a pick-up point).

Owners who sign up for these schemes will have access to a full fleet of planes, and can upgrade or downgrade depending on the requirements for each specific flight. Once a contract ends, the owner can then either sell their share of the plane back to the company, or on to the next customer on a waiting list.

What are the Advantages of Fractional Jet Leasing Over Charter Services?

Fractional Ownership offers several advantages over chartering a private jet or purchasing your own aircraft outright.
These include:

  1. You only pay for the time you spend in the air.
    If you find yourself flying a lot of one leg journeys, it may be more economical to sign up to a fractional ownership program. With private jet charter services, you still need to pay for the return flight, regardless of whether you or your guests are on board the plane.
  1. You enjoy consistency with your aircraft and crew.
    Part-owning an aircraft means you get to travel in the same model of plane for every journey. This builds familiarity with the aircraft and its crew, resulting in greater comfort and convenience.
  1. More Economical Trip Planning for Remote Areas
    Part-owning an aircraft means you are paying only for the time you spend in the air. If you need to frequently travel from remote regions it is likely there will be fewer charter options available, and so the cost advantages of booking through a broker are usually reduced.

Are There Any Disadvantages to the Fractional Ownership Model?

As with any arrangement, there are upsides and downsides. If you are considering Fractional Ownership, it is important to note you may encounter some of the following drawbacks:

  1. You may face reduced convenience / access
    If you are tied into a particular aircraft model this can sometimes place restrictions on your operations (if, for instance, you need a bigger plane). In the case of private small-scale shared ownership, the aircraft may not always be available when you need it.
    .
  2. You will be faced with regular costs
    If you are using a charter option, you pay only when you use the aircraft, with no fixed regular payments to cover. Whether this is an advantage or disadvantage depends very much on how often you fly.
    .
  3. Being tied to one aircraft can mean less flexibility
    Without any long-term contract, you are free to charter different sizes and models of aircraft as and when required. If you are already paying on a regular basis, you will want to make use of the plane you are paying for.

Would I Benefit From Switching to Fractional Jet Leasing?

As we have seen above, there are advantages and disadvantages to Fractional Ownership. Whether buying a part-share in a jet is the right move for you would be determined largely by how frequently you fly, where you fly, and the level of flexibility your operations require in terms of size and type of aircraft employed. There are a few other points to consider.

For owners and part-owners of private jets, the annual deprecation on their investment is tax deductible in some countries. Although this amount will be taxed later when the aircraft is sold, it is possible to gain interest on the depreciation amount while you still own the jet. This benefit is not available if you are arranging charter services, although in some cases you may find you are eligible to deduct the entire cost of a flight as a business expense. If you fly fewer hours per year, charter is usually the most cost-effective option.

Fractional Jet Leasing - Private Jet Interior

Choosing Fractional Jet Leasing allows you the comforting familiarity of using the same model of aircraft on a regular basis.

Another crucial factor is how you fly. Generally speaking, charter companies have a two-hour minimum flight time charge. If you tend to make mostly short journeys, it may be better in the long run to purchase your own jet (particularly if you have a lot of “empty legs”).

Even if you are usually present for the return journey, you have to take into account that the crew and the aircraft need to go somewhere during your trip. Does it make more sense financially to fly the crew home on a commercial airline and pay for parking, or is it more cost-effective just to send the jet away and then have it come back again after a few days?

Again, it depends very much on the specific nature of your operations and the distances involved. There are no hard and fast rules for determining which method is best for everyone, as all cases must be assessed on their own unique circumstances.

Any Questions?

If you would like to find out more about fractional jet leasing, private jet hire, aircraft charter services or any aspect of private jet ownership then please feel free to reach out to our experts. The Jetex Lifestyle team has decades of experience in private jet charter services, and will be happy to assist with honest, impartial advice. We look forward to helping you find the best solution, individually tailored to your needs.

Contact us today on +971 4 212 4088 or email lifestyle@jetex.com.

.