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Private Jet Travel: Understanding the Options
We begin by briefly introducing the reader to today's business aviation offerings through the
Whole Aircraft Ownership. Owning aircraft has been the transportation solution of choice for
many companies and individuals from the dawn of aviation. It remains an extremely flexible and
powerful travel tool. The capabilities of today's aircraft -- from a 30-minute hop, to carrying a
team of twelve between the U.S. East Coast and Asia -- and their variety -- from light piston
aircraft all the way to modified commercial transport jets -- could scarcely have been dreamed of
a few decades ago. There are also myriad ways to hold, operate, finance and even share the
use of private aircraft. In this Study we refer to the acquisition or lease of a 100 percent interest
in new or used turbine aircraft (jet or turboprop), employing an internal or "external"
(management company) flight department.
On-Demand Charter. Also known as "air taxi", traditional charter provides on-demand access to
a wide range of aircraft for almost any conceivable type of mission. From booking a single one-
hour trip, it could also extend to dozens of trips each year, varying mission profiles and use of a
wide range of aircraft. Thousands of companies offer On-Demand Charter services. Some own
their aircraft, some leverage downtime on aircraft that they manage on behalf of private owners,
and some are pure brokers matching supply with demand, either via online "demand
aggregation" engines or through old-fashioned means such as the telephone.
Block Charter. In its purest form, "Block Charter" has been around for decades and involves
simply buying a block of charter hours. It has enjoyed resurgence in recent years, with several
companies marketing new, more sophisticated Block Charter programs. These companies
typically sell blocks of 25, 50, or 100 hours. Payment is in advance and the account is debited
as usage is incurred -- either on an hour-by-hour or dollar-by-dollar basis -- based on the type of
aircraft used, flight hours consumed and any miscellaneous costs. Some take the form of
membership card programs, with the card's color reflecting the level of commitment and
Fractional Ownership. As the first truly creative concept to hit business aviation in decades,
fractional aircraft ownership (sometimes called "frax") appeared in the mid-1980s and has taken
the industry by storm ever since. It is best viewed as a means of obtaining a partial interest in an
aircraft, combined with a mechanism for sharing in all of the aircraft in the program (which can
be hundreds). All operations are arranged and managed by the program manager. Fractions
begin with a one-sixteenth share, typically providing 50 hours per year over multiple years.
Block-Frax. Borrowing characteristics from both Block Charter and Fractional Ownership is an
offering that, for purposes of this Study, we refer to as "Block-Frax". Block-Frax companies
acquire Fractional Ownership shares and sublease those shares (and hours) to customers.
They are able to offer smaller blocks of time (typically beginning at 25 hours) than those
available under Fractional Ownership, along with rights to participate in the Fractional
Ownership network. Block-Frax companies do not operate aircraft -- an affiliate of the Fractional
Ownership program does -- and their customers do not hold title to their aircraft. Customers
typically pay up-front for the year's usage.
Independent Source: Deloitte Private Wealth, Private aircraft: Flying private makes sense for those with the right information (page 20)
*This website has no affiliation with Deloitte.