What does it cost the owners to buy into the fractionals?

[Whirlwind]

I'm curious as to what kind of deals owners are getting in the fractional world right now.

What cost to buy in, how much management fee per month, and what cost per hour to fly.

As an example, I've read that a 1/4th share of a Beechjet 400A costs $1.5 Million to buy into, $20,000 a month management fee, and $1,400/hr to fly. That deal gives the owner 200 hours per year.

Is that what owners are really paying, or is that just the standard offer and is negotiated down?

 

[TailDraggerTed]

Isn't it on their comapny web sites? I looked this up a few years ago to see the costs.

 

[rajflyboy]

Whirlwind:


Your Numbers are very close to actual numbers at NJA.

Thats how much it costs.

 

[El Chupacabra]

Well they tell us that is what it is and they don't cut deals but that our competition does....

 

[NJAowner]

Nja $

NJA does not cut deals. Sometimes there may be a few changes to the contract terms, but the $$ remain the same for all owners who purchased at the same time.

 

[mzaharis]

Isn't it on their comapny web sites? I looked this up a few years ago to see the costs.

FlightOptions and CitationShares put their costs on their websites. I can't find them on NetJets or Flexjet.

 

[El Chupacabra]

Thats because they are more expensive.

 

[ultrarunner]

a 1/4th share of a Beechjet 400A costs $1.5 Million to buy into, $20,000 a month management fee, and $1,400/hr to fly. That deal gives the owner 200 hours per year.

Wow, works out to $10,120 bucks per hour for a beechjet. YIKES.

 

[NJAowner]

NetJets

As discussed before on other posts, NJA is not really more expensive when comparing new planes to new planes. If anyone wants pricing info, drop me a PM.

Fly safe.

 

[Whirlwind]

Wow, works out to $10,120 bucks per hour for a beechjet. YIKES.

Yea, it does seem like a lot...

If you count the purchase price as being worth 50% of new after 5 years, then the numbers work out this way:

$750/hr for reduction in aircraft value (200hrs/yr x 5 years)
$1560/hr to fly it (FlightOptions price)
$1160.64/hr for management fee ($19,344/month x 60 months / 1000 hours)

That actually works out to $3470.64 per hour to fly 1000 hours over 5 years.

This is a total of $3.5 million every 5 years...

I guess I didn't think to check the websites of FlightOptions and CitationShares, neither FlexJet nor NetJets shows these prices on their web site.

If anyone sees something wrong with my figures, please point it out to me...