Fractional Cents
Even though Fractional Ownership of a private jet is one of the most costly and least flexible ways to utilize private aviation, it does make fiscal sense for some. Many fractional owners, especially those that keep renewing their air charter contracts after every five years, tend to not realize the true cost and lack of flexibility associated with their private aircraft charter program. If you are a fractional owner of a private jet and don’t use all of your air charter hours, then any trip that surfaces, you are indeed better off using the hours you have remaining.
There are several scenarios where fractional owners of a private jet will and should take advantage of on-demand private charters. If you have a need to upgrade to a larger charter aircraft, you will often receive a very unfavorable interchange ratio which will accelerate your hours, costing you even more per hour of flight time than what you’re already paying for. If you have a need for additional hours, it’s often more cost-effective to charter for those additional hours than to purchase additional hours through your program.
When you break down the true cost associated with fractional ownership of a private jet to account for the Acquisition, Monthly Maintenance and Occupied Hourly Fee, you will find that your “true” hourly rate works out to be almost double what it would cost per hour using air charter, on the same aircraft. If you have a need for a frequently traveled route, many fractional owners will use air charter for one-way pricing where they can save upwards of 30%-50% compared to using your fractional hours for the same route.
Humans are creatures of habit and it’s hard to break a habit once you’ve been doing it for 5, 10, 15 years. While it’s true that you can use your program for almost any need, it’s not always wise to do so. Some brokers will never tell one of their owners that a particular trip may be better off utilizing charter aircraft, they do not work in your best interest.
Whoever handles your contract, should be aware of when private air charter is advantageous over fractional hours. By using both fractional on your private jet hours and charter aircraft, you get the best of both worlds and the best return on your private aviation investment.