Frax ?

[psysicx]

Why do people choose a frax over a charter or buying there own plane and having someone manage it? Do they not care there paying more or do they not know? Or is it a safety issue?

 

[hawg2hawk]

Holy crap, a good question.

Good job, psysicx.

 

[XTW]

Just my opinion, convenience. That's it. No headaches with aircraft ownership, broken airplanes, or searching for an available charter operator each time they need to fly. Also, they get a know entity most of the time, save a sell-off. They call one number and tell them when and where they want to go and that's it.


X

 

[FalconPilot69]

Response Time?

Does anyone know how much lead time an owner needs to give a frax company for a flight? I am sure in the perfect world it is 24 to 48 hours notice, but do they get 1 hours notice? I am assuming that since they also own a portion of the aircraft, that they get the same tax write offs as if it were their own.

 

[ProFracPilot]

The lead time depends on how large of a share they own. Typically, a quarter share response time is no less than 4 hours to anywhere within the primary service area (aka the continental U.S.)

 

[gutshotdraw]

Review time.

Fractional ownership programs were originally sold as a cheaper alternative to whole aircraft ownership. Any objective analysis of the finances involved reveals the total 5 year cost (INCLUDING back end repurchase of the share) for the 1000 hours received for the 1/4 share is higher than whole ownership. Any flight department run with the smallest clue will be less expensive overall when flying any more than about 150 hours a year (Yes, I know the salesmen say 200 hours a year -- do you believe a Netjets salesman?). Any less than 150 hours or so and you are better off with block charter if your ONLY concern is cost.

So why do people choose fractional ownership? I believe there are a few major categories.

1. A corporation that needs supplemental lift. Lets say ACME Manufacturing owns 3 airplanes but they need to get 5 executives to 5 different cities. A fractional share makes for a handy option when a traditional corporate flight department can't cover all the trips, broken airplane, etc.

2. A corporation has activist stockholders who whine about the "Royal Barge" and the costs incurred to the company. Much easier to bury a fractional share in a "travel budget" somewhere in the corporate ledger thereby keeping the know-nothing anti-corporate activists off the CEO's back.

3. A high net-worth individual usually likes things uncomplicated. If you have your own airplane, you have to worry about your crew, broken airplanes tubing trips, upcoming inspections, aircraft upgrades, huge personal property tax bills from states like California, etc. Many rich folk are willing to pay a premium to make one phone call and write one check. Add to that the availability of dozens of aircraft nearby in the event of an AOG and you can see why it's popular.

4. My personal favorite: Some fractional owners could never keep a full-time flight crew because of their bizarre behavior, unreasonable demands, off the wall schedule habits, etc. A fractional crew usually has to put up with these folks only a couple times a year.

Bottom line of all four: convenience and flexibility.

As for callout times, they vary depending on whether you hold a share or a flight card but generally a shareholder can get an airplane (domestically) within about 4 hours of the first phone call. During high use periods, the companies require much longer lead times.

The market is obviously there and service is the bottom line.

One caveat: Although frax owners are willing to pay a premium, there is a limit to that willingness. If their monthly service charge or occupied hourly cost goes beyond what they see as reasonable, they will look for alternatives.

Thus endeth today's lesson.

 

[psysicx]

I was looking at the Netjet jet card. For 25 hours in an Ultra it came out to 4,000 an hour. Plus there are additional fees correct?

 

[gutshotdraw]

There are some surcharges under the Marquis program. Most notably for fuel. Not sure about any additional fees.

On a per hour basis, Marquis is even more expensive than a fractional share. You do get to keep a couple million in up front money in your pocket, however.

 

[psysicx]

Is having a jet managed that big of a deal?

 

[guido411]

I might sound like a salesperson here but. . .

The frax have a safety record that is unparalled. Even though we go through the same training as most 135 operators, we have the continuity that the mom and pop shops don't. Most frax Captains are 5+ years with their company, past the point of caring about pleasing passesngers by making an on time trip but sacrificing safety. No offense to run-of-the-mill 135 operators, but you don't always get that with pilots in their first jet looking to make the D.O. or C.P. happy.