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Fractional ownership of private jets
Fractional ownership of private jets: watch out for hidden costs and restrictions
You may think that buying a share in a private jet will make your life easier. But did you know that this option can cost significantly more in the long run than you think? Read on to discover the truth behind the high costs and limitations of fractional ownership.
- What you really get for your investment: an initial investment in the hundreds of thousands or even millions of dollars may seem like a good deal. But what do you really get back for that investment? Often less than you think.
- The trap of depreciation: you have committed to a large investment, but the value of your stock can fall rapidly. In a market where demand is falling, this can be a costly mistake. Also, ‘your’ plane is being flown a lot, which means the depreciation will be more than average.
- The illusion of hours: a share represents a number of flight hours per year, often starting at 50 hours. But unless you fly intercontinental, these hours are often more than you actually need. Especially if you fly exclusively privately.
- The contract and your flexibility: a minimum three-year contract may not seem that long, but it can seriously limit your flexibility, especially if your situation changes. Next year, you will only visit your home in Ibiza four times and 20 hours would suffice.
- Diversity of costs: there are various costs that are charged in addition to the initial investment, such as fixed costs per month, an amount per hour, an amount per landing, etc. A good calculation is important here to calculate and assess the cost on average per hour over a year.
- The price of fewer hours: if you fly fewer hours than stated in your contract, your average cost per hour increases significantly.This makes the deal much less attractive.
- The limitations on your choice: It also gives limitations on type of aircraft, region where the contract is valid and takes away any flexibility to switch to another supplier if your travel calls for it.
Conclusion: the truth behind luxury
While buying a share in a private jet gives access to luxury travel, it is important to understand the hidden costs and limitations. Careful consideration and planning are essential before taking this big step.
Want to know more about luxury travel opportunities at Global Aviation? Then contact us.
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