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Accessing Business Aircraft

No one will deny the ability and efficiency of the business aircraft to serve a company’s or entrepreneur’s needs for transportation. How do the methods of accessing the aircraft compare? Let us count the ways.

David Wyndham   |   1st December 2013
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David Wyndham David Wyndham

As an Instructor Pilot in the U.S. Air Force- Dave's responsibilities included aircrew...
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A Summary of your Options
David Wyndham provides a capstone to his series on Business Aviation delivery systems.

There are many tangible benefits to having access to a business aircraft. These include- but are not limited to:

• Productive use of time;
• Flexibility and reliability of operations;
• Ability to attract and retain key personnel;
• Ability to support customers in an effective manner.

No one will deny the ability and efficiency of the business aircraft to serve a company’s or entrepreneur’s needs for transportation. How do the methods of accessing the aircraft compare? Let us count the ways.

On-Demand Charter
Charter can be excellent when:

• You hourly needs are limited- maybe to 25 hours per year or less;
• Your hourly needs are unpredictable: 20 hours this year- maybe 10 next year- etc.;
• You need access to different types of aircraft (cabin size/range) at different times;
• You already have an aircraft- but need a second aircraft several times each year.

The main benefit of using charter is that you only pay for the aircraft when it is in use. There are not contracts or long-term commitments. So it works best when you are unsure as to how many hours are needed.

Block Charter/Jet Cards
Traditionally- you charter on an as-needed basis with no commitment beyond the current scheduled flight. However- if you consistently make use of charter- you may be able to purchase hours in blocks of time for a set price. These cards are commonly sold in 25-hour units.

Block charter and jet cards are both pre-purchased charter hours at a set price. The Jet Card is commonly referring to a formalized program whereby you purchase a ”card” good for a block of charter hours. Block charter is the same thing. With both- you agree to purchase a set amount of charter from a single provider which may be a single company- such as Marquis NetJets- or a broker- such as Air Partner or Magellan Jets that deals with several charter providers. While program specifics vary from provider-to-provider- a typical Jet Card plan:

• Provides a block of hours purchased for a set price;
• Specifies aircraft type (e.g. light jet);
• Offers a single point of contact for scheduling;
• Typically limits price guarantee and length of contract to one year.

The main advantage to purchasing a block of charter hours or a Jet Card is securing a guaranteed price that does not increase during the length of the contract- and allowing access to a larger number of aircraft types than most small charter companies offer.

Fractional Ownership
Fractional ownership is attractive for the typical company or business person who flies between 50 and 250 hours annually. As the name implies- a number of companies or individuals purchase shares in a business aircraft that is operated by an aircraft management company.

It is not unusual for the management company- which provides all the personnel needed to fly- maintain and care for the equipment- to also be the seller of the fractional shares of the aircraft it manages. Each owner is guaranteed 50 occupied hours annually for each 1/16 share that is purchased. Fractional owners are billed for hours during which they actually occupy the aircraft (occupied hours).

Ownership contracts run typically for five years. Each shareowner has access to an entire fleet of aircraft- and can trade up or down for different aircraft types available in the program. With fractional ownership- you have an ownership interest in an aircraft. When used for business- that aircraft value can be used for tax depreciation. After your contract expires- you can sell your ownership interest.

Whole Aircraft
None of the previous forms of accessing aircraft offers the freedom- customization- service levels- control and responsibility that whole aircraft ownership provides.

• Freedom: With whole aircraft ownership your company has the freedom to purchase the optimum aircraft to satisfy its needs.

• Customization: The outfitting of the aircraft can be done to suit your operational and travel requirements.

• Service Levels: Your aviation department personnel are your employees.

• Control: The owner of a business aircraft has greater influence over operations than either a charter customer or a fractional owner.

Joint or Co-Ownership
If you do not want to pay the full costs associated with whole aircraft ownership- but want as much of the benefits and control that accrue with ownership- two alternatives are Joint Ownership and Co- Ownership. While both involve two or more entities owning the aircraft- they differ in terms of who provides crew.

Joint ownership is where one of the registered joint owners of an airplane employs and furnishes the flight crew for that airplane. Each of the registered joint owners pays a share of the charge specified in the agreement.

Co-ownership is very similar to joint ownership - each of the owners is a registered owner of an aircraft – however- instead of one designated owner operating the aircraft for all of the owners- each owner is responsible for employing their own pilots.

If control over your company’s means of transportation is paramount- sole ownership of a business aircraft is particularly attractive. Business Aviation offers unparalleled flexibility- safety and productivity. Employed wisely- it is an important business tool that can be an integral part of your company’s success. There are many ways to access these aircraft. Pick one- or more- that works for you.

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