Aircraft fractional ownership is a type of ownership where multiple individuals or corporations share the cost of owning and operating an aircraft. It involves dividing the cost of purchasing, maintaining, and managing an aircraft among a group of owners those who each own a fraction or share in the plane. This method allows people to access private aviation without bearing the full cost of owning an entire airplane.
One significant benefit of aircraft fractional ownership is its flexibility. Fractional owners can customize their usage based on their specific needs, whether it be for business or personal purposes. They can select from various planes within the fleet depending on their destination and passenger capacity requirements.
Moreover, fractional ownership provides access to additional services that might not be available through traditional chartering options such as maintenance, insurance coverage, crew management, and 24/7 customer support. The ability to share costs also makes it more affordable than owning an entire aircraft while still providing all the benefits that come with private aviation. It’s no wonder that this form of shared ownership has become increasingly popular among businesses and high-net-worth individuals looking for value in private air travel.
What are the benefits of aircraft fractional ownership?
Aircraft fractional ownership is a popular way for individuals and businesses to own an aircraft without bearing the full cost of ownership. It involves multiple owners sharing the costs and responsibilities of owning an aircraft, including maintenance, insurance, and hangar fees. One major benefit of fractional ownership is cost savings. Fractional owners only pay for the amount of time they use the aircraft, making it a more affordable alternative to purchasing a whole plane outright.
With fractional ownership, you can share these expenses with other owners which makes it more affordable. Additionally, this type of ownership model offers greater flexibility as you can schedule flights according to your convenience rather than being restricted by commercial flight schedules. Air taxi charter companies have also started offering fractional ownership options for their fleets.
Cost Savings
Fractional ownership of an aircraft is a cost-efficient way to own a private jet. In contrast to owning the entire aircraft, fractionally owning one means sharing the acquisition and maintenance costs with other owners. This shared responsibility results in significant cost savings for each owner, which can be up to 70% of what it would cost to own an entire aircraft.
Moreover, fractional ownership allows for customization based on individual needs and preferences, resulting in lower overall expenses. The owners can choose from a range of plans that cater to their requirements and budget – whether they need access to the plane occasionally or regularly. Additionally, fractional ownership eliminates overhead costs such as storage fees, pilot salaries, insurance premiums, and fuel prices.
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Flexibility and Accessibility
Flexibility and accessibility are two major advantages of aircraft fractional ownership. Fractional owners have the flexibility to use their aircraft as they please, without being tied down by airline schedules or limited routes. This means that they can fly to any destination of their choice at any time, without having to worry about delays or cancellations.
Accessibility is another great benefit of fractional ownership. Owners are able to access their aircraft at any time, which means that they don’t have to waste hours waiting in airport lounges or dealing with security checks. This also saves them a lot of time and money on travel expenses such as hotels and ground transportation.
Simplified Maintenance
One of the major benefits of aircraft fractional ownership is simplified maintenance. As a fractional owner, you are only responsible for the portion of maintenance costs that corresponds to your share in the aircraft. This means that you can enjoy all the benefits and convenience of owning an aircraft without having to worry about the full cost of maintenance.
In addition, many fractional ownership programs provide regular inspections and scheduled maintenance as part of their service package. This ensures that your aircraft is always in top condition and reduces the risk of unexpected breakdowns or costly repairs.
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Professional Support
Professional support is one of the key benefits that come with aircraft fractional ownership. As an owner, you will have access to a team of experts who will provide you with professional support whenever you need it. These experts include pilots, maintenance technicians, and customer service representatives who are available 24/7 to ensure that your aircraft is maintained in top condition.
The professional support offered by fractional ownership companies ensures that your aircraft is always ready for flights. The maintenance technicians check the aircraft regularly, ensuring that it’s in perfect condition before take-off. In case of any issues or repairs needed, they’ll handle them promptly to avoid delays or cancellations.
Tax Benefits
One of the significant benefits of owning a fractional share in an aircraft is the tax savings it provides. A fractional owner can claim depreciation, which can be up to 100% of the cost basis over five years. Additionally, they are eligible for deductions on expenses like fuel, maintenance, and insurance.
The IRS allows fractional owners to deduct expenses based on their percentage ownership of the aircraft. For instance, if you own a 20% stake in an airplane and use it for business purposes only, you can deduct 20% of all operating costs from your taxable income.
Furthermore, if you lease out your share in the airplane when you are not using it yourself or have less than 50% usage rights to other parties’ flights, then additional tax advantages are available. The leased airtime counts as “rental” revenue under current tax laws and could potentially offset any rental losses incurred by another rental property owned by you.
How does aircraft fractional ownership work?
When it comes to fractional ownership of aircraft, several individuals or companies share the cost and use of a single aircraft. These parties are known as “owners,” and they each hold a percentage share of the plane based on their investment size. In most cases, an aircraft management company manages the operations of the plane in terms of maintenance, crewing, scheduling, and other related activities.
Aircraft fractional ownership offers several advantages over traditional full-ownership approaches. One significant benefit is that owners can enjoy all the perks that come with owning an airplane without worrying about its daily upkeep since it is managed by experts. Additionally, fractional owners also save significant amounts on insurance premiums, fuel costs, and maintenance costs since these expenses are split among them.
