Looking for info...

[Dan CFI/CFII]

So, a company has asked me a few questions about getting away from the airlines.

The people in charge of coming up with "alternatives to airline travel" have heard a lot about fractional ownership, and have the words "Lear Jet" in their heads...

I don't know beans about fractional costs and whatnot, and I'd really like to be able to give them some info about that (and I know they would like some info about that too).

That said, from what I know of the company, they need to own (and a few airplanes at that). The operate in relatively small geographic regions, and go to a lot of destinations not served by airlines. They have over two dozen employees who average three and a half days a week travelling, to this point all on airlines, then usually renting a car and driving a few hours (usually to a town with an airport even).

So, anybody know where I can find some information on pricing of Fracs? I know it's about 200 hours a year where one should start owning, and this company will fly a LOT more than that, but I really feel like I should at least give them a cursory presentation of fractionals.

This could be big, real big. The ONLY reason this company has not gotten into corporate aircraft previously is that being a non-profit they were concerned about the image of a "company jet." But the schedules of the company officer (who told them to call me) are absoultely ridiculous and have been for some time...

Dan

 

[Rick1128]

Right now fracs are having an image problem. One of the pilots I fly with, his former boss (15+ yrs) went with fracs. The separate partners each got a 1/4 share and we are talking 5 quarter shares. They are complaining about the lost of value of their shares. But of course many aircraft owners are in the same boat.

It looks like this would be a good time to purchase an aircraft. Considering the small area and type trips, I would most likely look at a T/P and combine as many trips as possible. Or a citation. I really don't think you need to look at something much bigger at this point. If you do much more than 300 hours a year you can justify owning. As a non-profit, you could always register it under a different corporate name and do a lease agreement with the parent company.

 

[Dan CFI/CFII]

Yeah, I've been saying for a long time they needed a turboprop or two (or CJ or something).

I keep thinking Turo Commander, because they are still pretty concerned with the image (and it doesn't matter who actually owns it, it's that people know when they are in town, and think of thier money going to support the corporate offices and their jets), and I think a King Air still might look a bit too austentacious for them, but that low slung Tubo Commander... Besides, they're pretty darn fast, and there is some excellent support out there for them.

But I feel I should at least give lip service to a fractional for them, even though I know it isn't what they want. Any details on why frac ownerships have lost value? I've been out of the country and not reading up for a few months, and I've never paid much attention to fracs anyway.

Like I say, I am positive they will either buy a TP or two, since it is a buyers market here, or they will decide to stick with the airlines and spend WAY too much money, and pay thier executives to sit in Garden City, KS because the 1900 that serves the town is broken down for a while...

Dan

 

[kingaira90]

Frac article

I read a great story about fractionals the other day. It was in the April issue of Stratos. They had a bunch of the mags at the local Signature. I had never seen it before. But it gave a good overview of the frac concept, covered the 3 big ones and gave sample buy in and monthly prices for each. I seem to remember the buy in on a cj or beechjet from options was $166,000, then $1,200 per hour for a 1/16 share or 50hrs a year. Straight up from there for a bigger share etc. You could fly the heck out of a couple of turbo commanders for that.
Try checking the local Signature they might carry the magazine there, they let me have a copy. It had a big yellow hummer H2 on the cover, can't miss it.

 

[Rick1128]

The reason the frac aircraft have lost value is the same reason all aircraft have lost value. A very soft market.

A Commander is a good choice. Though some people are uncomfortable in them because they are low slung. Personally I wouldn't go any older than a 690B though. Stay away from MU2. Low price, but insurance is through the roof. Another choice is a B100 King Air. 200 cabin with much lower cost and lower fuel burn. Personally I like the Cheyenne and Merlin series also.

 

[g1159]

Frac Yes/NO

Dan
Help Im confused!
I presume you are talking about a frac operator that provides jet aircraft.It is very difficult to compare turboprops to corporate jets.
After 20+ years as a Flight Department Manager my experiences with a company that has an image problem with thier aircraft on the ramp will have a very difficult time understanding cost of ownership.
I would suggest that you charter several aircraft,this will allow you to examine your true needs vs what they think they are.
I would also involve your accounting folks to work thru cash planning.Items like off balance sheet items(lease) vs ownership.
Fractional companies will provide all of this to you but also understand what their agenda is.
Aircraft ownership isnt cheap,however if used effectivly in can be
an asset everyone in the company supports.
Please dont take this as an assualt on you but I have my doubts when people have problems with aircraft image.

 

[pa56pa]

You can pick up alot of jet for half the cost compared to a couple of years ago, lease it out to a few companies willing to use it. That is what we're doing with our Lear-55, and it is being dry leased for $1450/ flt hr. $1200 for a CJ seems expensive but, then again... someone else other than yourself has put the deal together.

 

[marqmarq]

Dan

Just a couple of thoughts. Fully managed or charter managed aircraft through EJM, TAG, etc. is a good option for many organizations. In this scenario, your company buys the aircraft and has the option of crewing it. This allows your aircraft to be used for charter during down time to recover some costs. Also, the managed companies provide MX management, pilot management/training, etc. This is great if your company doesn't have the expertise. You can check with the managed companies for their pricing structures, etc. As earlier mentioned, these guys have a product to sell.......

Also, there are fracs that offer turboprops.

I agree with the earlier advice, charter some various aircraft and evaluate their effectiveness based on your organizations needs.

Good luck...