JonJuan -- first -- thanks for not taking the "bait" an dgiving me a lecture on depreciation. I am quite familiar with many very intricate facets of depreciation.
As a fractional owner, I believe the analysis is a combination of depreciation and new share acquisition costs - that is the total cost to be in, or stay in the program. As far as NJA goes, as long as they are running your fleet you never have to sell your share to stay in the program. And because it is a fractional program and I do not always fly "my plane" at 7 years, for example, I am flying the same planes but do not need to pony up any more $$ to do so. Flex (Bombardier) is in the business of selling planes. For many years, the program was you had to sell back your old share and buy a new one in 5 years. They have gotten more liberal -- for a medium sized cash payment, at the 5 year mark you may extend for an additional 2 years. At that point you must buy a new share.
This also impacts "cash flow". Cash flow is as impoortant to a large business or wealthy indiividual as it as some one without much $$. Would you rather get paid $52k/year in 52 weekly installments or get paid $54k in one lump sum at the end of 52 weeks. It is the same way with Flex (I am not conceding the depreciaton point, but assuming the depreciation is less), you need to come out of pocket major $$ to stay in the program at the end of 7 years.
In my opinion Flex's program is like this -- I buy a 2005 car and for 3 years drive a 2004, 2005, 2006, 2007 car. In 2008, I need to sell my depreciated 2005, pay the new list price for a 2008, but still get to mainly fly the 2004s-2007s. I know from other fractional owners, this is a major, major negative in the Flex program. It is only lately they have added the additional 2 year extension.
Also, as another point, Flex does not guarantee more than a handful (read less than 5) of downgrades per year. For me, that is a huge cost. I "extend" my hours by downgrading often when feasible. 3 or 4 of us going to Florida do not need the G200 so we fly an Excel (and end up getting 33% more hours). When it is just one of us we use an Ultra/400XP (and end up getting 50%) more hours. At the end of the year, I usually end up getting 25-30% extra hours on the year. Not everyone uses downgrades. This has been a tremendous cost savings for me.
Just my 2 cents. But as youmay see from reading my prior posts, no one program is "best" - it is a matter of what best suits your needs.
Fly safe.
As a fractional owner, I believe the analysis is a combination of depreciation and new share acquisition costs - that is the total cost to be in, or stay in the program. As far as NJA goes, as long as they are running your fleet you never have to sell your share to stay in the program. And because it is a fractional program and I do not always fly "my plane" at 7 years, for example, I am flying the same planes but do not need to pony up any more $$ to do so. Flex (Bombardier) is in the business of selling planes. For many years, the program was you had to sell back your old share and buy a new one in 5 years. They have gotten more liberal -- for a medium sized cash payment, at the 5 year mark you may extend for an additional 2 years. At that point you must buy a new share.
This also impacts "cash flow". Cash flow is as impoortant to a large business or wealthy indiividual as it as some one without much $$. Would you rather get paid $52k/year in 52 weekly installments or get paid $54k in one lump sum at the end of 52 weeks. It is the same way with Flex (I am not conceding the depreciaton point, but assuming the depreciation is less), you need to come out of pocket major $$ to stay in the program at the end of 7 years.
In my opinion Flex's program is like this -- I buy a 2005 car and for 3 years drive a 2004, 2005, 2006, 2007 car. In 2008, I need to sell my depreciated 2005, pay the new list price for a 2008, but still get to mainly fly the 2004s-2007s. I know from other fractional owners, this is a major, major negative in the Flex program. It is only lately they have added the additional 2 year extension.
Also, as another point, Flex does not guarantee more than a handful (read less than 5) of downgrades per year. For me, that is a huge cost. I "extend" my hours by downgrading often when feasible. 3 or 4 of us going to Florida do not need the G200 so we fly an Excel (and end up getting 33% more hours). When it is just one of us we use an Ultra/400XP (and end up getting 50%) more hours. At the end of the year, I usually end up getting 25-30% extra hours on the year. Not everyone uses downgrades. This has been a tremendous cost savings for me.
Just my 2 cents. But as youmay see from reading my prior posts, no one program is "best" - it is a matter of what best suits your needs.
Fly safe.
