Own a piece of the sky.

AuthorROZANSKY, DAVID A.
PositionFractional ownership of jets

FRACTIONAL OWNERSHIP IN CORPORATE JETS IS GAINING A FOLLOWING.

An Englewood flight school wanted to take prospective pilots out of their simulators and into the real world. Only problem was, the U.S. Federal Aviation Administration considered the training plane experimental, and rules said it couldn't be rented out to the students.

"We designed a fractional ownership program for a small jet trainer that he (the trainer) intends to use to train prospective airline pilots," said Bob Schultz, an attorney at Rossi & Maricle in Denver, and a specialist in fractional jet ownership programs. The program works by having students purchase a fraction of the plane, train in it, then sell back their share. In a fractional jet ownership program, a company or person purchases a portion -- usually one-eighth or one-sixteenth -- of an aircraft, guaranteeing a certain amount of flying time each year. Five main companies nationally -- none of which are based in Colorado -- provide the service, although smaller ones are eyeing the market.

Usually, the fractions are purchased by businesses that either are expanding their own flight departments, or those who are too small or don't travel enough to need to own a corporate jet outright.

Costs -- usually a monthly and an hourly fee -- vary widely, depending on the fraction purchased, the aircraft and contract details. But buying gets a company a complete package, including aircraft, maintenance, pilots and all services. It also ensures an aircraft will be available when needed.

"It's like a lot of other industries that need a menu -- not everyone wants to buy the same way" said Mark Chambers, director of advisory services at Denver-based Aviation Resource Group International, a consultancy specializing in general aviation airports. "It's an opportunity to buy into corporate aircraft travel."

Traditionally companies can opt to use major airlines or corporate jets. Jet options include 100% ownership, chartering or, more recently, fractional ownership. At one time, a company needed to fly 250 to 300 hours a year to justify buying a corporate jet, Chambers said. Fractional programs let them fly 50 to 100 hours a year at a lower cost. Other selling points: The programs, like corporate jet ownership, allow travelers to fly into general aviation airports closer to their destinations, and they control the flight times, destinations and trip schedule. And customer service is rarely matched by the major airlines. Furthermore, "The safety records of these programs are as good as it gets," Chambers noted.

On the downside, investment in fractional ownership is more of...

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