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Fly more with full ownership

How to know when to transition

The bundled pricing and across-the-board coverage fractional ownership offers is a convenient option for business travelers easing into business aviation.

For ten years, a Los Angeles-based businessman was a fractional owner of a Citation® Excel® he frequently used for business travel between Los Angeles, California, and Salt Lake City, Utah. While his mission profile remained largely unchanged throughout the years, the management fees, hourly costs and surcharges steadily increased.

The higher costs eventually proved to be the catalyst that led the entrepreneur to consider owning his own aircraft on his own terms. He consulted with colleagues and other aircraft users and experts, analyzed the numbers and made a decision.

“It looked to me that for about the same amount I was spending per year with the fractional provider, I’d be able to fly almost three times as much with my own airplane,” said the businessman, who prefers to remain anonymous.

Finding the right aircraft

The key to making the purchase cost-effective, he said, was to consider aircraft that would provide him the flexibility and range he needed for his missions, but would not exceed the operating costs he’d previously incurred through the fractional provider.

The entrepreneur opted for the aircraft that fit his mission profile best, a pre-owned Citation CJ3®. Still today, the eight-seat jet has the room he needs for long business trips, and its range and short-field performance allow him to fly into the same airports as his previous aircraft.

“For my missions, it’s perfect,” the businessman said. “Our primary legs are all under two hours, though we recently flew cross-country and up and down the east coast. The convenience is wonderful. We never did that with the fractional program, because the operational costs for the CJ3 are so much lower than the hourly costs were for the fractional Excel.”

Fractional vs. full ownership costs: a breakdown

Aircraft Purchase price* Hours flown per year Operational costs**
Citation Excel
Fractional, 1/16 share
$6 million
based on total costs

50 hours
Citation CJ3 pre-owned
Full ownership
$4 million
based on total costs

150 hours

*Excludes depreciation and opportunity cost of capital.
**Includes monthly management, hourly and maintenance costs.

The aircraft’s features have proven beneficial for his missions, but other factors also helped the businessman make the decision to purchase the Citation CJ3.

“With the fractional provider, we were using the plane a lot less, because with fractional ownership, every incremental hour is very expensive. With full ownership, every incremental hour is very inexpensive. The more you use the airplane, the lower your cost per hour. To hop on your airplane and go somewhere for the day carries a low incremental cost, but with a fractional provider, it can be a very expensive proposition.”Los Angeles-based businessman and Citation CJ3 owner

Easing into aircraft management

One of the primary reasons owners hold on to their shares is because fractional providers oversee the management of the aircraft. What owners soon realize is a variety of companies can also provide aircraft management support at competitive – and sometimes even lower – costs than fractional providers.

Aircraft owners generally have three options. Independent maintenance directors only manage the service needs of the airplane. Full-service management companies mirror the all-in-one approach of fractional providers, providing pilots, storage and maintenance support. Textron Aviation also offers a more customized option, allowing customers to choose and pay only for the specific management services they need.

Finding an aircraft manager

Discuss your needs with experienced owners at your home airport who can give you model-specific advice and local recommendations.

A locally-based flight instructor – also a qualified test pilot – proved to have all of the credentials the businessman needed in an aircraft manager. The pilot’s military experience and reputation at the local airfield led the businessman to partner with the instructor who now serves as the entrepreneur’s management advisor and chief pilot.

“Most of us, especially those who were fractional owners, are not experienced owner-pilots; therefore we need someone with the experience and the knowledge to advise us on the acquisition and then to make good decisions about the maintenance and operation of the aircraft,” said the businessman. “It was simple connecting with my advisor. He was someone introduced to me by friends who were also CJ owners, and they’d known him for years.”

As he nears his first year of full aircraft ownership, the businessman is looking ahead. He’s currently working toward earning his pilot’s license, and he’s also on track to log 150 hours as a passenger – triple the annual hours that were once available through his previous fractional provider.

“I think the most important thing is to have someone who you know to have excellent experience and knowledge to advise you throughout this process,” he said. “With our own plane, we finally feel free to use it whenever and however much we want, without significantly changing our total cost of ownership per year.”