April 19, 2021
Fractional vs. Full Business Jet Ownership: The Pros and Cons of Each
Owning a Private Jet Makes Executive Travel More Pleasant
Business travelers seeking to leave behind commercial airlines and the crowded airports that go along with them have multiple options that don’t necessarily include buying a private jet for sale.
However, for those for whom traveling is a common occurrence, aircraft ownership is an ideal solution for decreasing the amount of hours spent in airports and aboard commercial jets unconducive to conducting business.
Fractional and full private jet ownership are appealing options, depending on the net present value they provide for your company and its shareholders. Both afford the use of private jets for business travel, the ability to conduct confidential business while aboard, and the benefits to skip the TSA lines at a regular airport. But each type of ownership also comes with its own set of pros and cons.
What is Fractional Jet Ownership?
With a fractional business jet ownership agreement, you pay only for partial ownership of an aircraft and utilize it much like a timeshare. Fractional owners are granted a specific amount of time per year in the aircraft, which depends on the size of the fractional share you own.
The total operating time for a fractional jet is 800 hours per year, so each fractional owner is granted a percentage of that. This means that your jet may have more than two fractional owners and up to 16 at any given time, if the fractional ownership program you’re enrolled in sells as little as 50 flight hours per year, for example.
Jet shares generally require at least a five-year commitment. In addition to the cost of the share, your company will need to pay acquisition costs; a monthly maintenance fee; and an hourly fee that covers hourly costs, like fuel and flight crews.
The Pros of Fractional Jet Ownership
The most popular reason companies utilize fractional jet ownership programs is to save money over the purchase price and upkeep of their own fleet of private jets. Fractional ownership contracts are more affordable than buying a jet.
Fractional ownership relieves your business of many of the responsibilities that come with full ownership as well; specifically, your aviation operations team need not oversee maintenance, hiring and training of flight crews, locating a hangar, and more. The fractional jet service provider handles all of these aspects, which are rolled into the cost of fractional ownership.
The Cons of Fractional Jet Ownership
Unfortunately, there are downsides to fractional jet ownership that your business should consider before entering into a contract.
The first argument against fractional jet ownership is that you do have to essentially share the aircraft. If the aircraft you want is booked at the time you’re seeking to fly, you’ll have to pursue other travel options, including choosing a different private jet through the fractional ownership program, flying commercially, or paying out-of-pocket to charter a flight.
The second argument is that you have no control over who else you’re sharing your jet access with. Some companies may object to this and consider it a potential conflict of interest. This, of course, is only a con to fractional jet ownership if it actually applies to you.
The third and perhaps most profound argument against fractional jet ownership is that your company will need to make a major investment when signing your five-year contract. However, you receive nothing back when that contract is up. However, if you had purchased a private jet - even a used one, like those listed for sale on AircraftExchange - you could have at least recouped some of the purchase price by selling your jet. You recoup no costs after fractional ownership.
What does it mean to own a business jet?
When your company owns its own private jet or a fleet of private jets, it means they’re responsible for all costs associated with jet ownership, much like an individual is responsible for all costs associated with car or home ownership. It’s very straightforward.
The Pros of Owning a Jet
Your company owning its own jet comes with plenty of benefits.
First, owning the jet eliminates the requirement to pay fees toward a fractional jet contract and allows you to operate your aircraft as often and whenever you like. You need not compete with other fractional owners for scheduling of flights.
Second, when you own your own aircraft, you can ensure your jet’s amenities are exactly what your company’s executives need when they travel, going so far as to customize the cabin to their liking.
Finally, owning your own aircraft gives you the option to sell and purchase a different-sized aircraft if your executive travel needs change, allowing you to recoup some of the original purchase price of your private jet. These funds can then be applied toward purchasing an upgraded aircraft, or reallocated within the business as needed.
Shop for Used Jets for Sale at AircraftExchange
Businesses of any size looking to buy a used private jet should contact a knowledgeable aircraft dealer accredited by the International Aircraft Dealers Association and review the listings of private jets for sale at AircraftExchange.com.
All the aircraft for sale on the site have been vetted for authenticity and accuracy, so you can proceed confidently with your purchase.
Begin your search for your business’s next private jet.