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...

 

[rajflyboy]

I wonder what the cost is to charter a Hawker 400XP per hour??

I'd like to know. The consumer would probably have some ferry time added in for most cases. That would be something to factor into the equation.

I would be willing to bet you can Charter a Beechjet for 1800 per hour!

 

[ultrarunner]

yeah, that rate seems about right..and just for grins, lets assume that the local company that is going to charter 200 hrs from the local beechjet operator is going to also pay for 100 more hrs of postitioning time...

300 hrs x 1800/hr = 540,000

still makes sense. And no ownership issues.

Now, I'm not sure what operators are promising for a response time for a 1/4 share. Maybe that's a factor in paying a premium.

Obviously, for many people, it's worth that tremendious premium.

 

[Whirlwind]

I wonder what the cost is to charter a Hawker 400XP per hour??

I'd like to know. The consumer would probably have some ferry time added in for most cases. That would be something to factor into the equation.

I would be willing to bet you can Charter a Beechjet for 1800 per hour!

I'm willing to bet you can too... But there are other expenses in there...

I currently fly a Mitsubishi DiamondJet which is the older version of the Beechjet, and our DOC is pretty low. Would the owner rent it out for $1,800/hr? Probably, but you'd have to pay for pilots seperately from that, and of course traveling expenses...

Would it be less than $3,500/hr? Yes, without a doubt...

 

[SKYYBIRD]

Charter is ALWAYS cheaper than frax (on a per hour basis), as it should be. It's a step below frax. In addition to the young frax fleets and more experienced frax pilots, you're really buying a program, which includes all of the services and benefits that come with fractional. I've heard over and over how some frax salespeople (NJs) quote a per hour cost comparable to charter. It's not even close if they compute the numbers right, which they rarely ever do I reckon (one reason they don't post price on their website).

 

[beechjetpilot1]

There is also bonus depreciation on taxes for many owners....get's the cost somewhat lower

 

[miles otoole]

Actually you have to compare "apples to apples." To say a CJ2 is cheaper than a Hawker800 XP is a no brainer. However comparing a C Ultra to a Lear or CX, you would look at cost per mile. Faster means fewer hours to pay for (hourly rate) as well as the ability to utilize more hours per year in your contract which will lower the overall cost of the faster AC as capital costs (purchase price) and the monthly fees are fixed.

 

[mzaharis]

If you go for a program like Sentient Jet, which is a glorified charter operation, they charge $3,800/hour one-way, and $2,800 round-trip for a Beech 400A. They make many of the same availability and simplicity of access promises as the fractionals, but it is basically a pool of privately owned aircraft that Sentient charters. A bit like a Jetcard program, but without the central aircraft management. I'd guess that aircraft and flight crew quality would be more variable. The other nice thing is that you don't pay for capacity that you don't use.

This is from a guy with no personal experience - I only read the website, so take what I say for what it's worth . . .

http://www.sentientjet.com/pricing/jets/jets.aspx?cat=5&id=5721&pref=y

 

[miles otoole]

I wonder how many 500 hour part time $20 and hour FOs who never touch the controls fly through charter Sentient? Remember, you get what you pay for. I'd rather both my pilots be typed in relatively new AC and making a "decent" salary.

 

[English]

I wonder how many 500 hour part time $20 and hour FOs who never touch the controls fly through charter Sentient? Remember, you get what you pay for. I'd rather both my pilots be typed in relatively new AC and making a "decent" salary.

Alot.

I used to do Sentient charters through a former employer. I flew single pilot most of the time, but Sentient required two pilots. Although there were other qualified pilots at the company, the company always recruited local CFIs to sit in the right seat. My former employer made the Sentient paperwork look like they were emploees, but they weren't. In fact, they had absolutely no 135 training at all. They sat in the right seat when passengers were on board. They didn't work radios, pull gear or anything except provide good conversation to yours truly during the flight. On the empty legs, I'd let them fly. YIKES. Good thing they weren't flying with passengers on board, but ya know, it really wasn't their fault, having received no training and all.

 

[NJAowner]

Frax vs. charter

We can write for quite along time about frax vs. charter. Frax is definitely more expensive, but worth it. You may want to ask Payne Stewart (but you can't) about his flights on well maintained charter planes with experienced capable crews. His crash made many think twice about cheap charters you do not know well. Unfortunately for him, being a Flex owner, he should have waited the few extra hours for the FlexJet to arrive.

Fly safe.

P.S. -- how can we put a monetary value on knowing that Mr. NetJetWife is in the right seat of our flight. --- just being sarcastic NJW -- no harm meant. But it is true -- he is an experinced pilot and not all chaters have them.

 

[ozpilot]

With charter, you get what you pay for. In a fractional program you often get more than you pay for. On my last trip I flew an Be-400 Owner in the ten. Not only did he get a bigger airplane for his money but it actually cost him less since we got him there sooner!

 

[rajflyboy]

If you use charter for business you could write that off as well!

 

[GVFlyer]

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.

I can help with the Gulfstream. GV quarter shares (the only fraction that make economic sense) are going for $9,625,000. Monthly management fee is $53,388 and each occupied hour is billed at $3,244.

GV

 

[LXJ31]

On the Payne Stewart thing, its my understanding that the LR-35 that crashed was part owned by either his agent or the guy they were doing business with in Orlando. He did not have a Flex trip scheduled as far as I know.

Another thing about charter V frax is recovery time. A fractional can have another airplane standing by very quickly when an airplane breaks. Even in Moosejaw.