Over the last few years, fractional private jet ownership companies like Warren Buffett’s NetJets and Kenn Ricci’s Flexjet have seen a boom in demand. More people than ever before want to own their own slice of a private jet, and are willing to through the nose for it.
Indeed, the average fractional private jet owner has a net worth of at least $250 million and spends an average $7.5 million acquiring their jet! So at that price, is it truly worth the cost?
What is Fractional Private Jet Ownership?
The idea of fractional aircraft ownership goes back to the beginning of aviation. When aircraft became available for people to purchase and fly recreationally, flying clubs began to form and brought pilots from all backgrounds into contact with one another.
What they began to realize, was that aircraft ownership was expensive given what little time they spent in them. This led some pilots to join together and purchase aircraft as a sort of consortium, giving each pilot the ability to book the aircraft whenever they wanted and for them to share the cost of maintaining it.
And though this was primarily used for general aviation aircraft, aviator and former Goldman Sachs executive Richard Santulli theorized that this principle could be used with high net worth individuals (HNWIs) who didn’t fly enough to warrant owning their own jet, but flew too much to make charter ineffective.
Pioneering this, Richard Santulli acquired Executive Jet Aviation in 1984 and began the NetJets program in 1987.
Proving enticing for wealthy customers, NetJets soon expanded to become one of the largest private jet operators in the US and was acquired by Warren Buffett’s Berkshire Hathaway in 1998 for a staggering $725 million.
Many had followed NetJets’ success and copied their business model, chief among them companies like Flexjet and PlaneSense, who similarly became quite successful.
In essence, fractional private jet ownership has all the benefits of owning a private jet (as you literally own a “fraction” or “share” in the jet) whilst having very few of the downsides.
Pros
Cheaper
Less Hassle
More Privacy
Time and time again, studies have shown that privacy is one of the main reasons people buy private jets is the anonymity factor.
Especially for those in the public eye,
A Better Flight
Tax Benefits
Cons
Competitive Availability
Restrictions (Some Aircraft Are Region-Fixed, Can’t Fly to All FBOs, Restrictions if you use more than your allotted share time, what if someone else books a flight when you want to? Hassle of going through network to get other jet, chartering or flying commercial, restrictions on selling share before contract is up)
Large Fees
Nothing at The End
Charter May be Cheaper
Conclusion
At the end of the day, flying is an intensely private