Owning your first private jet is a proud and exciting moment. Whether you are buying a jet for personal excursions or business travel, you need to consider various factors such as amenities, specifications, operational costs, and ownership. Among these, ownership is one of the most important factors, as buying a private jet is a huge investment. An aviation consulting firm can help you understand the intricacies involved before you make a decision, including the different ownership options. This blog post gives you an outlay of the different ownership options. Read on.
Co-ownership
Co-ownership is the simplest way to own a jet. It simply means you will share the airplane ownership rights with another individual. According to the agreement, the total cost of the private jet, including operating and maintenance costs, will be divided among the total number of co-owners, with every person being responsible for their share of the cost. You can, therefore save a considerable amount of money on your purchase. Although you won’t have to consult a manager to use the airplane, there are chances of disagreements related to flying schedules, maintenance and financial disputes with other co-owners due to the absence of leadership authority to make decisions.
Partnership
Entering a partnership to own your dream jet is similar to being a co-owner, with the difference being that a partnership is intended to generate profit. Such an agreement is primarily between flight instructors, flying clubs, and other commercial entities. A partnership involves multiple owners, or partners, which automatically lowers operational costs and improves revenues. Having said that, every individual involved in the partnership is legally liable for the actions of other partners, which is why it is often seen as a riskier agreement compared with co-ownership.
Cooperative Ownership
Cooperative ownership is similar to a time-share or condo investment. Owners entering a cooperative agreement can buy the airplane and sells its shares to one or more individuals. The owner with maximum shares carries the responsibility of aircraft insurance and maintenance compliance, while other members just have to pay a monthly fee to the primary owner. Additionally, major shareholders also manage the flight schedule, minimizing chance of disputes as seen with co-ownership. This means aircraft cooperative managers are always in the driver’s seat, and their decisions are final.
Fractional Ownership
Fractional ownership is the oldest and one of the most popular methods of sharing aircraft ownership. It is common among corporates where multiple buyers enter fractional ownership of jet aircraft. In fractional ownership, buyers agree to a stake in 1/6 or 1/8th of the aircraft. This substantially decreases the cost of owning a private jet, as the price is divided into four, six, or eight shares. You may not even experience scheduling conflicts, as you all enter into an interchange agreement wherein the manager can substitute a different aircraft in the event that your own aircraft is not available. This way you can fly almost anytime, while the management company arranges the flight crew, fuel, maintenance, and insurance, which increases the overall cost of fractional deals.
The Bottom Line
This is just an overview of the different ownership options you can enter to own a private jet. For finer details on how to proceed, it is recommended to get in touch with a reputable aviation consultancy firm such as Leviate Air. We are an established private jet company and stand ready to guide you through the sale and purchase of aircraft and can also arrange for the management of your jet. To learn more about our our aviation consultancy services or discuss your requirement, fill out our contact form or simply dial (877) 720-2770.
