Low End Fractional

[captnmayday]

Hi all:

I have been toying with the idea of a low-end fractional (i.e PA31 or C402) for smaller Ma and Pa shops who can not afford the high cost of Turbine/Jet fractionals. I have put some numbers together and it seems fairly cheap to get it going. This business obviously would not make me rich but allows me to make a living owning my own aviation company.


I know fair amount about A/C operation and I have extensive flying back ground (including international). However I am lacking buiness and marketing skills and looking for a trusting partner who is interested to build a business and is passionate about aviation.

If this idea interests you, please PM me and we can start a dialog.

Thank you for your time,
Capt. MayDay

 

[JetA1]

MayDay...

I have extensive fractional experience and am interested in how a low end fractional will make money. Do you have a business plan?

 

[captnmayday]

I do have a proposal summary that I can provide. A detailed business plan is still in the works and I have been too busy flying around these days ... If interested, PM me and I can give you a preliminary proposal information

 

[Mr. Irrelevant]

capt,


If it's a good enough idea($$$) and you develop a feasible business plan, make sure you have anyone you speak to about the specifics of the idea sign a letter of confidentiality. These usually last one year. If you don't it is very likely your idea will be pretty well known in your local area and the private investors you speak to may find someone to manage their own start-up. Just a little $.02. Good luck.


Mr. I.

 

[captnmayday]

Thanks Mr. I ...

as I said, I am more of a pilot than a business man but I get the letter of confid. in hand

Capt

 

[swaforme]

Finding a business partner on the internet may be a bit like finding a date on the internet.

Make sure they send a picture.

 

[WileE]

Do you subscribe to "Flying"

They have been doing a series of articles on a small fractional program with Cirrus aircraft. Might be a good source of info for you.

 

[captnmayday]

Thanks ... and no I dont subscribe to Flying but I know the Cirrus fractional ... it is called "Our Plane" and is for owner/pilot fractional but now that you mentioned them, I maybe able to contact them ...

 

[AeroDMB]

Great topic, it's an exciting start-up venture. I've researched starting up a fractional with one of the light jets coming out in 2006 as well as one similar to this using smaller aircraft, i.e. Cirrus, Diamond, Lancair, etc.

OurPlane - Cirrus, Cessna & Raytheon
AirShares Elite - Cirrus & Cessna (Expanding)

One thing with small aircraft fractionals...if you have a tough time selling an airplane to one person, think how difficult it might be to 4, 6, or 8 people...just a thought.

Don't forget 91 subpart K, lots of new requirements that might drive your costs up. However, I believe there are some exemptions allowed depending on your operation.

NBAA has tons of information if you are a member...an option to consider is Joint-Ownership or Co-Ownership. Get some companies together that you have convinced they need a business aircraft, buy an aircraft and you be the Management Company, include management fees, you get to fly, etc. In the persuasion speech, use NBAA for supporting material, references, cost comparisons for airline or charter.

TAX Benefits are very attractive for buying new aircraft, up to 71% tax savings.

Here's a sneak peek:

Joint Ownership. Joint ownership creates the opportunity to legally share cost and economically justify an aircraft at lower utilization rates. Under the FAA definition of joint ownership, registered owners may share the fixed costs of ownership with one of the owners acting as a manager. Individual owners "pay as they go" their own direct operating expenses.

Co-ownership. Co-ownership is simply joint ownership that utilizes a management company's expertise instead of the expertise of one of the joint owners.

Sharing aircraft can dilute the advantage of availability. Unless the travel habits of individual owners are atypical, the aircraft may not be available for a "pop-up flight."

Fractional Ownership. Fractional ownership can alleviate the occasional availability problems involved in the sharing of aircraft. Further, fractional programs can be more cost efficient at lower utilization rates. Some companies use fractional programs to provide additional lift during peak travel periods. The fractional option requires entering into highly formalized management agreements. At slightly higher utilization levels, fractional ownership may not be as cost efficient as other forms of ownership.

Good luck, it's fun stuff...definitely a fun business to start, not really sure on the profit potential though.

AeroDMB

 

[captnmayday]

Thanx Aero ...

That gave me a good start ... I will definietly look into it. I know it may not be profitable but I am not making much as freight and GIS pilot anyways