- Fractional Aircraft Ownership Expenses
- Initial Purchase Price
- Monthly Management Fee
- Hourly Usage Fee
- Repositioning Fees
- Maintenance and Repairs
- Termination Fees
- Fractional Jet Ownership vs Charter: Which is Right For You?
- Can You Write Off Fractional Jet Ownership?
- The Difference Between Fractional Jet Ownership and Jet Cards
Fractional aircraft ownership is a popular option for those looking to fly privately without the high costs of full aircraft ownership. It allows individuals or companies to purchase a fraction of an aircraft, and then use it for a specific number of flight hours per year.
In a fractional aircraft ownership program, a group of individuals or companies purchase a share of an aircraft together and then pay a monthly management fee to cover the costs of maintenance, insurance, and other expenses. The aircraft is then managed and operated by a professional management company, which provides a full-service experience, including flight planning, scheduling, and maintenance.
Fractional aircraft ownership can be a cost-effective solution for those who fly frequently, but not enough to justify the expense of full aircraft ownership. With fractional ownership, your cost to fly is limited to the direct operating costs of the aircraft, and your ongoing fixed and variable costs are shared across the pool of fractional owners of the aircraft, and you don’t have to worry about the costs of maintaining and storing the aircraft.
Now, let’s get into the specifics of fractional aircraft ownership and explore the differences between fractional jet ownership vs charter flights.
Fractional Aircraft Ownership Expenses
Before you become a fractional owner, you should know the full cost of fractional jet ownership.
The following are expenses that you can expect to pay as a part owner. Your fees will vary depending on many things, including the size of the jet (light jet, midsize, large) and share size. Private aviation can be expensive, so it’s important to get into fractional ownership being fully aware of the long-term costs.
Initial Purchase Price
When you purchase a fractional aircraft share, you’ll need to pay an initial purchase price. This price will vary depending on the type of aircraft you’re buying and the size of the share you’re purchasing.
Monthly Management Fee
Most fractional aircraft ownership programs come with a monthly management fee. This fee covers the cost of maintaining and managing the aircraft, including pilot and crew salaries, fuel, and insurance.
Hourly Usage Fee
You’ll also be charged an hourly usage fee every time you fly. The hourly usage fee will vary depending on the type of aircraft you’re flying and the number of hours you fly.
If you want to fly to a destination that the aircraft isn’t already located at, you may be charged a repositioning fee. This fee covers the cost of moving the aircraft to your desired location.
Maintenance and Repairs
As with any aircraft, your fractional aircraft will require regular maintenance and repairs. These costs can add up over time, so it’s important to factor them into your budget.
Fractional aircraft ownership also requires insurance, which can be a substantial cost, you will need to pay for the liability and hull insurance that covers the aircraft.
If you decide to terminate your airplane co-ownership, you may be required to pay termination fees.
Fractional Jet Ownership vs Charter: Which is Right For You?
It’s important to note that these costs can vary depending on the fractional aircraft ownership program you choose. Be sure to do your research and compare different programs to find the one that best fits your needs and budget.
With a charter, there is no ongoing expense. Simply pay as you go. You also have flexibility in choosing the size and type of plane for every charter. This can be a big benefit when traveling longer or shorter distances.
For short distances with only a few passengers, charter can allow you to choose an economical option. If you’re traveling cross country, you can choose a larger jet that can go non-stop.
Additionally, it’s a good idea to consult with a financial advisor to make sure fractional aircraft ownership is the right choice for you and understand the expenses related to it.
Can You Write Off Fractional Jet Ownership?
Fractional private jet share offers the same tax benefits as full ownership. Those with fractional aircraft ownership for businesses can write off the costs as a tax deduction. Proper documentation of your fractional interest usage, be it for business or personal travel, maximizes your travel cost deduction.
The Difference Between Fractional Jet Ownership and Jet Cards
Jet cards are perfect for occasional travelers, while fractional ownership is well-suited for those who fly more than 25 hours per year.
With a jet card, you select a dollar amount for a fixed number of hours, and as you fly, those hours or flight costs are deducted. Once the hours or amount on the card are used, the arrangement ends.
As we covered earlier, buying a fractional share means purchasing a portion of the plane and receiving a set number of annual private use hours. In addition, fractional jet shares provide tax advantages as tangible assets and offer bonus depreciation benefits for business travel.
With this information in mind, you can have a better idea of whether you want to buy into ownership of private jet travel or to stick with private jet charter companies for your air travel needs.
In conclusion, when deciding between whole ownership vs fractional ownership, fractional aircraft ownership can be a great option for those looking to fly privately without the high costs of full aircraft ownership. However, it’s important to be aware of the expenses related to private jet fractional ownership.
By understanding these fractional plane ownership costs, you can make an informed decision about whether shared ownership is the right choice for you.
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