Airfleet - Private Client Aircraft Management, Charter, Acquisitions and Consulting



For the more frequent user possibly unable to justify full ownership, there are several established multi-user, fractional ownership and other shared-use schemes.  Key requirements for such programmes are sound logistics and operations management and a critical mass of new aircraft so as to meet sales promises.

Fractional ownership permits the shareowner to utilise one or more of a pool of similar machines (some of which may be the advertised new aircraft and others older aircraft purchased pre-owned) for an agreed number of hours each year. Availability is guaranteed and a maximum response time is assured, though may be longer than desirable, e.g. normally at least 6-8 hours and in some cases up to 24 hours.  The fractional operator may, however, also charter from other operators to meet its contractual obligations and/or to minimise its own positioning costs.

In addition to the cost of purchasing a share at the prevailing market rate, the owner pays a fixed monthly management fee together with pre-set hourly usage charges, normally simply for the occupied time only.  Budgets are quoted to be easier to establish and surprises are said to be minimised.   On exit from the plan, the share can be sold at the then-prevailing market rate.

The fractional operator primarily acts as a manager for its owner-members, in the US and certain other countries operating aircraft under private rather than commercial rules with, in particular, lesser restrictions on maintenance regime, required runway lengths, weather reporting and pilot duty periods.   In Europe, most such operations are conducted under commercial rules.  The service provided is a fairly standardised, potentially lowest common denominator product, with unknown faces in the cockpit.

Fractional operators in general are also known to make most of their profits from trading their aircraft and associated shares, actually creating the market and unilaterally determining prices at time of purchase (high relative price for share in high time used aircraft which customer often perceives to be new) and buy-back (low price based on then market value of ‘tired’ high time aircraft).   It is noted that the effect of this strategy, and the sheer numbers of aircraft involved, will have an increased bearing on the wider used aircraft market over the next few years, though the aircraft involved can only enter the bottom end of the market (much like used rental cars or former taxicabs).

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