The "Word" Is...Fractional

Dictionary Definition: Constituting or comprising a part or fraction of a possible whole or entirety.

Aviation Usage: "Fractional" refers to a nonexclusive ownership interest in an aircraft where two or more owners share ownership of and obligations for a single aircraft. "Fractionals" are an alternative to purchasing a private jet for exclusive use and allows more people the opportunity to fly privately while sharing the costs associated with full and complete ownership. Fractional programs are structured, marketed and managed by program sponsors such as FlexJet and NetJets. Fractional programs are now recognized and regulated (Federal Aviation Regulations, Part 91, Subpart K), but grew out of the creative blending of joint ownership and interchange clauses in the existing regulations.

What It Really Means: "Fractionals" are one of several ways to buy solid time in a private aircraft. The same can be achieved by simply chartering an aircraft on the "spot" market or by pre-paid "card" arrangements. Fractional ownership means increased flight hour options, but it includes funding initial acquisition cost (initial capital fee), a monthly maintenance fee and an occupied hourly fee. Initial costs can range from several hundred thousand dollars for a 1/16 share in a small jet to several million dollars for a 1/4 share in a large business jet. For a regular user of business jets, where total annual use is between 100 and 150 hours, fractional ownership makes sense; particularly if the user can benefit from the depreciation deduction associated with direct ownership.

Playing It Smart: It is important to examine options, preferences and needs when determining whether to buy a fractional interest or pursue another avenue. Other aircraft options do exist, such as outright ownership, which allows for greater flexibility in scheduling and exclusive use of an aircraft; however, with ownership comes a greater financial obligation. Charters are convenient for the occasional traveler (less than 25 hours per year) who would prefer to pay an all-inclusive rate for travel. The ever popular "jet cards," which offer prepaid, all-inclusive flight hours, are another option for travelers who require 25 to 50 flight time hours per year. Bottom line: buy for what you need.