Comparison study of buying an airplane, fractional share, jet cardrivate jet charter

14. Page 3-5

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3. Program Characteristics 




Private Jet Travel: Understanding the Options  

October 2003 




As noted, new Federal Aviation Regulations issued in September 2003 
essentially prevent Fractional programs from selling shares in blocks smaller 
than 1/16th increments (typically equating to 50 hours per year).  If the average 
trip in a light jet is 1.5 hours, this limitation can make Fractional unattractive for 
customers requiring less than 30 flight segments per year.  Several companies 
have found a way to give customers some of Fractional Ownership’s benefits in 
time blocks starting at 25 hours. 
For purposes of this Study, the concept is referred to as “Block-Frax” since it is 
achieved by a company acquiring (in some form) a “standard” Fractional 
Ownership share and then subleasing that share (and its associated flight hours) 
to others in smaller time blocks.  The Block-Frax program enters into the same 
(or at least similar) agreements with a Fractional company as those required of 
traditional customers.  The customer, in turn, executes documents outlining 
services promised by, and payments due to, the Block-Frax company.  In effect, 
the Block-Frax company acts as a broker and vehicle to give customers access 
to Fractional networks at lower hourly commitments.  They do not operate 
Financial Considerations of Block-Frax 
While structurally similar to Fractional, the financial aspects of Block-Frax 
programs are similar to Block Charter (see below for full discussion of Block 
Charter).  You pay one upfront fee based on the number of hours required.  
There is no long-term commitment (usually year-to-year) and it is renewable if 
desired.  Block-Frax programs, however, are usually offered at an hourly price 
point that is higher than Fractional.  And if you do choose to renew the contract 
for an additional year, there is no guarantee that the upfront fee will remain the 
same.  Like with Fractional Ownership, you can expect that increases in fuel 
price will be passed along to you via a mechanism defined in your Block-Frax 
contract.  As you are only leasing the aircraft from the Block-Frax company, you 
are not at risk for any changes in the value of your aircraft during the contract 


Operational Considerations of Block-Frax 
Generally, as a Block-Frax customer, you can expect operational considerations 
to very closely mirror the Fractional program from which the Block-Frax company 
acquired the share.  Aircraft “upgrades” and “downgrades” are often possible but 
may be handled on an as-available basis and as outlined in your contract. 
Block-Frax programs operate under the same aviation regulations that govern 
On-Demand Charter. They are commercial operations during which the operator 
(usually associated with the affiliated Fractional program management company), 
not the customer, is in “operational control” and therefore holds the primary 
liability for the safety and regulatory compliance for the flight.  




Block-Frax rules 
and minimum 







Block-Frax fees 






A subset of 


Operator holds 


"Chartering a plane, either directly from a charter company or through a charter broker, is often the most cost effective way to fly private."

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.