Is It The Right Option For You?

By ANN Contributor Thomas P. Turner

Fractional ownership.

This aircraft ownership option has seemingly sprouted almost from nowhere in the last few years. Although fractional ownership of professionally flown turbine aircraft appeared a few years earlier, the rise of owner-flown fractional ownerships began concurrently with the introduction of what we now call Technically Advanced Aircraft (TAA)--airplanes with moving-map GPS and autopilot technology, more and more frequently with "glass cockpit" Primary Flight Display (PFD)/Multifunction Display (MFD) panels.

Does fractional ownership make sense to pilots who fly piston-powered airplanes? What are the deciding points on buying into a fractional? What are the unique benefits of fractionals that offset some of the costs? When are you ahead of the game to bypass fractionals and buy an airplane outright? What might you consider to decide whether fractional ownership makes sense for you?

To answer these questions ANN has spent several months researching fractional ownership of owner-flown, piston-powered airplanes. We've surveyed readers like you who are fractional owners, who are currently considering buying into a fractional program, or have been fractional owners but have left the program for one reason or another. We've also polled managers of fractionals. With this cross-section, we got a sense of each perspective toward fractional ownership of owner-flown piston airplanes-you'll see quotes from several ANN readers' responses as you read this report.

• Read Part One Here
• Read Part Two Here
• Read Part Three Here
• Read Part Four Here

Fractional Ownership: Is it For me?

Entering into a fractional program is a big investment. Most of the fractionals themselves provide guidance as to whether it is a sound investment for any one pilot. Some are very forthright about cautioning the occasional flyer he/she will be better off renting airplanes conventionally through an FBO, while pilots who fly very frequently may run into scheduling issues that limit the benefits of ownership through the fractional.

"You're still going to want to own your own airplane." -- Current fractional owner

In general, fractional program managers suggest that:

• Pilots who fly less than 50 hours per year are far ahead financially to rent instead of buying into even a "right to use" fractional arrangement.
• Pilots who fly more than 150 hours per year are probably better off to buy their own airplane outright.

Given that most airplanes in owner-flown, piston fractional programs can cover 150 to 200 nautical miles in an hour, this means that:

• Fractional ownership begins to make sense, as explained by fractional managers themselves, if you typically fly one 300- to 400 nautical mile flight every month, or two 150- to 200 nm flights every month.
• If you typically fly one medium-distance cross-country trip a week you will probably begin to have scheduling conflicts that may make outright ownership more attractive to you.

"The arrangement is perfect for pilots flying 100 to 140 hours per year." -- Current fractional owner

In almost all cases fractional ownership is going to be far more expensive than renting. If you fly more locally but want the benefits of a nearly-new airplane combined with the hands-off approach to maintenance and insurance with the services a fractional program provides, you might consider the additional costs worthwhile.

Summing up survey comments on the advantages and disadvantages of fractional ownership --

Advantages of fractional ownership include:

• A Fully-managed program... make your reservation 24/7 on the phone or online, show up at the airport with your own keys, and fly. Program managers take care of aircraft storage, cleaning, maintenance, scheduling, avionics, Service Bulletins, Airworthiness Directives, etc.
• Fixed, predictable costs per hour and per month... with no maintenance surprises
• In some programs, access to an entire fleet of different aircraft across North America.
• Factory-new aircraft at a fraction of the cost of sole ownership.
• The latest in technology and safety features (not always available on older aircraft).
• In some programs, the ability to move up through an entire fleet of different makes and models of aircraft.
• Mandatory six-month recurrency checkrides for all owners, usually at no cost to the fractional owner.

Disadvantages:

• Aircraft availability is not 100% (that only comes with sole ownership).
• Scheduling conflicts may become a problem for owners flying more than 100-150 hours per year (unless multiple shares are purchased).
• Not ideal for owners that want to do their own maintenance or equip/upgrade the airplane to their own specifications.
• It is typically far more expensive than renting at the local flying club or FBO.
• Available aircraft types are limited to the choice of program managers.
• Mandatory six-month recurrency checkrides for all owners.

Additional ANN reader survey responses:

"Like rentals, other people are still using the plane, but that's not really a huge disadvantage because the program polices use."

"Convenience is the greatest advantage of fractional ownership. Flight schools and flying clubs seem generally to have aircraft that are older and have maintenance issues quite often. Also, it was difficult to schedule either for a several-day trip or even on short (1-2 week) notice for a time I was looking for with a rental FBO. Fractional ownership has comparable hourly costs [after the membership investment], but with newer, readily-available aircraft and few maintenance issues."

"I am more impressed with the fractional ownership model than I expected to be."

"Slightly less flexibility than renting as to when a plane may be available. Never a problem for me yet."

"For those of us not rich enough to own our own, don't want the hassle of partnerships, maintenance etc., and hate the crappy airplanes you are occasionally able to rent (when they're not being used to instruct) fractional ownership is the only alternative. Before a fractional program started near my home I had stopped flying for four years because of the problems with renting."

"The advantages of having a clean, modern, well-maintained aircraft available virtually any time I want (particularly if I am willing to do a little planning) far outweigh the ongoing monthly fee and very occasional booking conflict."

"I need to plan ahead; I cannot be totally spontaneous with my flying."

"I highly recommend fractional ownership to anyone who flies less than 100hrs/year."

"What most attracted me to fractional aircraft ownership? The Cirrus SR22 and the ability to have more time to fly and not spend time with maintenance and the other overhead associated with directly owning an airplane."

"Fractional ownership costs more if few hours are flown; availability is an issue if one or two members fly excessively."

"I do not mind paying for some kind of "management", but current costs are too high."

Does fractional ownership make sense for you? Only you can decide for sure, but consider this Buyers Decision-Making Guide to Fractional Ownership.

Fractional ownership of owner-flown, piston airplanes is a unique way to own and fly a well-equipped, late-model airplane. Although it is far more expensive than renting or flying clubs, it does provide a lower-cost alternative to outright ownership of one of the latest airplanes. Moreover, fractional programs take care of the unattractive tasks of airplane ownership-maintenance, like insurance and cleaning, freeing up your time for other things.

If a program is available in your area, you're flexible with airplane scheduling and you fly between about 50 and 150 hours per year... fractional ownership may be the most attractive way to fly the growing crop of Technologically Advanced Aircraft.

Sample Fractional Ownership Profiles

Profile: OurPLANE
Locations: 30, primarily in the New York City area, near Houston and in Florida and Southern California, with locations also in Canada and the central US
Fleet: Cessna 182, Cirrus SR22, Raytheon A36
Headquarters: London, Ontario
877-775-2631
www.ourplane.com

Notes: Also has a corporate fractional program in turbine-powered, professionally flown airplanes, and a yacht fractional ownership.

Profile: Airshares Elite
Locations: 15, primarily along the US East Coast but also in Minneapolis, Chicago, Detroit, Columbus, Cincinnati, Birmingham and Atlanta
Fleet: Cirrus SR20 and SR22
Headquarters: Atlanta, GA
800-482-5411
www.airshareselite.com

Notes: One of the first major fractional ownership programs for owner-flown, piston airplanes, in business since 2000.

Profile: iFly
Locations: Six Southern California airports
Fleet: Columbia 350
Headquarters: Long Beach, California
866-463-5946
www.iflysmarter.com

Notes: Expects to be "national within the next several years"

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