When you buy a fractional jet share you are paying for part ownership of a specific plane. You will be allocated an amount of time in the aircraft. This usually ranges between 50 - 400 hours of flight time per year. The number of hours depends on the size of the share.

As most of the companies operating fractional jet programs have whole fleets of aircraft, you're unlikely to be using "your" plane each time you fly. It makes more sense economically for the operator to bring the closest available jet to meet you. Having an empty plane waiting on the tarmac would mean an increase in costs, which will ultimately be handed on to the owners.

At the end of the program's term (usually five years), the owners usually sell their shares of the aircraft back to the operating company. This final sale price is dictated by the marketplace price for the aircraft. 

Planes

There are a variety of companies offering fractional aircraft ownership and a variety of planes to choose from. You can buy a share of light jets, through ultra-long range jets and some companies offer shares in turboprops and helicopters. The two main things to decide in picking the right plane for your needs are the passenger capacity and the flight range. In simple terms, the bigger the plane, and so the larger the capacity and the longer the range, the higher your costs will be.

Fractional Shares

The operating time for a fractional plane is usually based on 800 hours a year, in other words the operators expect the aircraft to be flying for 800 hours each year. The smallest fraction is typically 1/16th equivalent to 50 flying hours per year. The other common ownership fractions are:

• 1/8 = 100 hours
• 1/4 = 200 hours
• 1/2 = 400 hours

There are some companies that offer fractional shares based on days of use, rather than hours of use. As an example a 1/16th share would then give you say 20 days of use during the year.

Is it for me?

As we mentioned above, you need to fly privately at least 50 hours a year for it to start to make sense. Even then, if you often need different sized aircraft - eg for a mix of big groups, small groups, long trips, short trips - a share might not be the right answer. Having said that many fractional programs will let you use a larger or smaller aircraft if they have different planes in their fleet. 

Buying a share is typically a 5 year commitment, sometimes with shorter periods available, so if you expect your travel needs to vary significantly over this period it may make sense to look at the other options. Most agreements do give you the opportunity to opt out after say 3 years.

Costs

The costs involved in fractional jet ownership can be broken down into four categories.

• Initial capital fee, or acquisition cost, which varies based on the type of plane and the size of share you buy. A share in a light jet would start at about $350,000 for 1/16th in an older plane, expect to spend at least $675,000 for a share in a new jet.
• Monthly maintenance fee, an amount that includes the pilot's salary, insurance, maintenance and the cost of keeping the plane in a hangar.
• Occupied hourly fee, which covers fuel, maintenance and in-flight catering whilst you're onboard the jet.
• Miscellaneous, includes fuel surcharges.

The initial costs can vary from a few hundred thousand dollars for a 1/16th share in a small jet, to several million dollars for a 1/4 share in a large business jet. The costs are split in a linear fashion, so 1/8 is twice as much as two 1/16's, with no major discount for buying larger shares. For some specific pricing, read this article on fractional ownership of the Phenom 300. The total costs over a typical 5 year ownership period are likely to be well over $1 million for a light jet.

Agreements and Documentation

When you buy a fractional share there are typically four documents that you'll sign:

• Binder/Deposit Agreement.
• Purchase Agreement.
• Master Dry Lease Exchange Agreement.
• Management Agreement.

Read this article for an overview of fractional aircraft contract documents.

Alternatives

There are several alternatives to fractional jet ownership, these include:

• Outright Ownership
• Aircraft Leasing
• Jet Cards or Fractional Cards
• Open Fleet Charter Cards & Memberships
• Aircraft Charters