Bill Lumberg

How many hours do you expect to fly per year? What type of missions will you fly? How many people on average will fly with you? These types of questions need to be answered before you consider the alternatives. You want a solution tailored to your situation and needs.

Keep in mind that when you buy a fractional share you are paying for a portion of the fractional operator's overhead. Sure, you get depreciation benefits, but you are paying a very high premium because the operator has a very expensive infrastructure to maintain. Fractional cards are even more expensive on an hourly basis from what I hear - you are essentially paying for their reputation. The Marquis Card, for example, is super expensive on an hourly basis relative to other charter operators but people want to buy something related to Netjets because of its reputation for safety, luxury, etc. I also believe most of those people don't do their homework and they are merely looking for a status symbol with a reputation for safety. That's my opinion (why buy something that is considerably more expensive than alternatives on an hourly basis?).

Personally, if I were wealthy and in your current position, I would charter airplanes from a reputable/experienced charter operator only when I needed them. Don't pay a lot up front when you are not sure when you will use the hours. Compare hourly rates between the Flexjet card and a competitive/reputable charter operator - you should not be paying as much for the charter operator per hour. Most big, reputable charter operators will also have a variety of airplanes available to fit your mission requirements. I would pay a la carte if I were you. If your use is for business use I assume you would be able to write-off those expenses.

Buying an airplane would entail management of an airplane and all of those associated expenses and stresses. I've read that you should consider full aircraft ownership if you fly something like 300-400 hours per year at a minimum. You would get serious depreciation benefits but you would either have to manage it yourself (costly and time consuming hiring people to fly/maintain the airplane) or hire a management company to handle those functions and possibly charter it out while you are not using it.

If you live on the West Coast and you are intent on buying a smaller jet airplane and you want charter revenue on the side, I would consider the following operator (JetSuite). It is a startup company with an interesting concept and it might be worth exploring if you want a smaller airplane. The founder is a former Jet Blue founder (I don't work for the company but I find it interesting).

That's my $0.02. There's a great article out there about the cost-side of the fractional business and it paints a grim picture because of all of the infrastructure investments required (operations, core fleet, training, etc.) to operate profitably - as a fractional owner or card buyer, you would help pay for that infrastructure. Sure, you are paying for the charter operator's infrastructure as well when you charter an airplane, but it can't be as expensive as the fractional's costs because of the size difference of the infrastructure. You are paying a big premium to fly with a fractional if you fly for a small number of hours per year. Good luck and let us know what you decide.