Private Jet Ownership: Is Fractional Ownership Profitable?
From tax incentives to accessing your own aircraft, there are several possible benefits to private jet fractional ownership. This makes it an attractive option for those seeking the perks of private jet ownership without the full financial burden. But is it possible to turn your new asset into a revenue stream?
Unfortunately, fractional ownership does not lend itself to profitability, but you may be able to recover the cost of your initial investment when it comes time to sell your share. Depending on which fractional ownership company you use, you may even be able to sell your share back to your provider at the end of your contract.
If you can’t make money from fractional ownership, what are the financial benefits of owning shares of a private jet?
Here’s what you need to know before you invest in private jet fractional ownership.
How a Private Jet Fractional Ownership Works
Private plane ownership comes with significant costs, from purchasing an aircraft to the ongoing expenses of operation. Fractional ownership offers an alternative to this financial burden.
It also provides a more convenient option than using a broker to charter a private jet. Essentially, fractional ownership is when you purchase a share of a private jet or fleet of private jets.
Fractional ownership shares typically come in multiples of 1/16 and are based on 800 flight hours, as per FAA regulations. That means if you purchase a ½ share of an aircraft, you’ll see roughly 400 hours in the air, while a 1/16 share would equal only 50 hours of flight time.
Can You Make Money With a Private Jet?
While it is technically possible for a private jet owner to profit by using their aircraft for charter flights, it’s uncommon. In most cases, private jet owners use charters to offset the cost of ownership, not to turn a profit.
With fractional private jet ownership, you own a share of the private jet and won’t be able to profit from your private jet, though it may still be worth the investment.
Why do on-demand #jetcharters stack up quite favorably against fractional ownership? #BizAv https://t.co/HbV9r55Emh pic.twitter.com/6WSIOo2pfK
— Stratos Jet Charters (@StratosJets) July 6, 2016
Is fractional jet ownership worth it?
Private jet partial ownership can be a great investment for you or your business, but it depends on how you typically use private jets. If you fly more than 50 hours per year and typically fly the same route, the initial investment might be worth it.
However, there are also downsides to fractional ownership. When you own a share of an aircraft, you lose out on the flexibility of chartering different types and sizes of private jets. If you need a larger jet capable of flying the whole family or want to save on operating costs for a short flight, you may need to use a charter despite owning part of an aircraft.
Fractional ownership also brings unexpected additional fees, such as maintenance and repair costs, that you should consider before purchasing private jet shares.
Can You Write off Private Jet Fractional Ownership?
Yes, you can use the depreciation of your private jet fractional ownership as a tax write-off.
In addition to sharing the weight of the sales tax with your fellow owners, this is one of the principal benefits of private jet shared ownership.
FAQ
Have more questions about the ins and outs of private plane ownership? Here are answers to some of the most common queries:
How much does it cost to own a private jet?
The cost of outright private jet ownership can range from millions to tens of millions of dollars, depending on the size and model of the aircraft. However, fractional ownership offers a more affordable entry point, with costs varying depending on the share size and the chosen program.
If you’re not ready to commit to ownership, you can also charter a private jet for individual flights. Find out how much it costs here.
How rich do you need to be to own a private jet?
Private jet ownership is primarily reserved for high-net-worth individuals and corporations. However, fractional ownership opens the door to a wider range of individuals who desire the convenience and luxury of private aviation without the full financial commitment of corporate jet ownership.
Who owns a private jet?
Private jets are owned by a diverse group, including wealthy individuals, celebrities, business executives, and corporations. Fractional ownership programs can attract individuals and businesses seeking a more accessible and flexible option for private plane share.
Is a private jet a good investment?
A private jet can be a good investment if used strategically for business purposes, chartering, or as part of a fractional ownership program with revenue-sharing opportunities. However, it’s important to consider all costs, including depreciation, maintenance, and operational expenses, before making a decision.
Explore Private Aviation Options with Stratos Jets
Want to learn more about fractional ownership and other types of private aviation business models? Our in-depth guide to private aviation offers a comprehensive look at fractional ownership, jet cards, chartering, and more.
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