Jet Advisors Blog

Recognizing when a Deal is Too Good to be True

Posted on Fri, Apr 11,2014


Aircraft Discussion The old saying 'if it sounds too good to be true, it probably is' holds true in most instances. It can be especially costly to you in the field of aviation if you fly charter, use a fractional service or have a whole aircraft or share a whole aircraft.

Aircraft are rather unique vehicles for travel in that most others wear out and get retired, but with an aircraft, as long as they are inspected and maintained to their manufacturer’s and the governmental agency that oversees them requirements they don’t wear out, to a point. This is one area to be concerned with if you are looking to buy a whole aircraft or share a whole aircraft with partners. Older aircraft have lower acquisition costs as compared to newer like aircraft but as aircraft age the maintenance and inspections become progressively more intensive. So you pay less upfront but the costs to keep the aircraft airworthy are higher, much higher than a newer aircraft. Also with whole aircraft ownership your travel patterns can cost you more. If you fly somewhere and stay, do you ferry the aircraft back empty to its base or do you keep it with you. If you keep it with you what do you do with your crew? Do you pay for them to fly home or do you pay their hotel, meal and rental car costs while they stay. Keeping the aircraft with you may not be an option if you share the ownership with others.

If you share the aircraft with others, who gets first priority for its use? If you are second inline do you not travel or do you have to find alternative means at your expense? Keeping in mind even when you are not using your aircraft you still incur expenses for its upkeep, hangar, crew, insurance, etc. If you have lease financed the aircraft you own or share, what are the aircraft condition requirements (cosmetically and mechanically) at end of the lease term? These can be substantial.

With fractional programs and charter operators what is your real cost? Like todays pricing for airline travel there can be many “hidden” costs. When a fractional company provides a proposal to enter their program do they include the depreciation on your aircraft asset (50% or more over a five year term), fuel adjustment (usually over a thousand dollars per hour) to your advertised hourly rate, flight time minimums, or taxes in the proposal? With charter companies you can ask the same questions, is the quote all inclusive or are there hidden charges like crew overnight fees, hangar fees if the weather is bad at your destination and catering charges. With charter or fractional programs, what if you make last minute changes to your itinerary or cancel the flight? What if the air transportation provider is late or doesn’t show up at all, what is your recourse?

As stated above, if the deal being offered appears to be great (too good to be true) compared to your other options, you need to find out why.

Topics: jet card, charter, fractional, fractional ownership, charter flights, fractional share, private jets, jet lease, fractional program, fractional jet program, fractional co-owner, jet co-owner, private jet co-owner, fractional light jets, fractional consulting

Quelling Nervous Flying

Posted on Thu, Mar 27,2014


Safe LandingIt matters if you fly commercially, or privately, if you are a nervous, or fearful flyer, to some extent. Most flyers (if you are not a pilot or the pilot for the flight) have some misgivings each time they fly, but some of us just resign ourslves to the fact that you need to fly and have little control over the many factors that could impact the flight.

Some factors that cause concern regardless of flying commercially, or privately, are obvious like the weather, over water flights, mountainous terrain, airports in the mountains and small airports (usually short narrow landing strips). Some are not so obvious but due to past accidents and the subsequent news reports still cause some concern. Some not so obvious concerns include security, aircraft maintenance condition, pilot complacency (dependence on automation versus pilot skills), pilot training and experience and pilot fatigue.

Outside influences such as hijacking, terrorist activities and the growing incidents of lasers pointed at cockpits are also thought about prior to flight by some. In private aviation hijacking and terrorist activities are unlikely but the threat from laser light (accidental or on purpose) is growing in the US and in Europe. After 9/11 and other previous horrible events (Lockerbie Scotland) commercial travelers were on edge and the recent “disappearance” of the Malaysian airliner has done little to quell those fears.

So how do you overcome your fears and what can you do? If you fly commercially there is little you can do to change a flight plan, the point of origin of the flight and the destination, checking the experience and training of the crews or the quality of the aircraft maintenance. These are all controlled by the airline. US airlines have a very enviable safety history; however you are still at their mercy when it comes to security check in, crowded aircraft and the unavoidable delays and cancellations. If you fly privately, either on your own aircraft, through a fractional program or by charter, it is a different story.

If you own or co-own the aircraft then you have firsthand knowledge of the crews experience and training and the maintenance status of the aircraft.  In addition, you pick departure and arrival location, times for the flight, who you fly with and most importantly you have the ability to terminate or not start a flight if there are any factors that bother you. If you participate in a fractional program you have the comfort factor (if your provider is one of the larger ones) that pilots are highly skilled and routinely trained, the aircraft is maintained as it should be (with a large staff overseeing such maintenance) and you have the ability to cancel or terminate the flight if you have a weather or other concern, however, you might get charged for the cancelled flight. With most charter operators they can provide you with their past histories and audit reports from independent aviation professionals and, as with fractional programs, you have the ability to cancel or delay flights for any reason but once again you may be charged for any itinerary changes or cancelations.

So what should you do? Do your homework on the method of air transportation you use and if using commercial stay vigilant. If you have your own aircraft make sure your crew knows your preferences and if you fly fractional or charter these companies usually build a profile on your likes and dislikes, make sure the profile is accurate.

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Topics: jet card, charter, fractional, fractional ownership, private jets, jet lease, fractional program, fractional jet program, fractional co-owner, jet co-owner, private jet co-owner, fractional light jets, fractional consulting, airports, Nervous Flying, Malaysia

Who Else Owns My Fractional Jet?

Posted on Wed, Aug 14,2013

Private Jet, Gulfstream 450You own a fractional share in a specific aircraft through one of the several fractional aircraft programs, and you want (or need) to know who the other owners are. What can you do? Some programs have an ownership agreement that is supposed to be signed by all of the owners of a specific aircraft; if that is the case with your program, you could ask the program provider for a copy of the agreement signed by all owners. Even if your program provider does not require a separate agreement amongst the owners of a specific aircraft, you could request that information from them anyway.

If the program provider will not or cannot supply you with a list of the other owners, what are other options to obtain this information? If your fractional program is based in the United States, then your aircraft is required to be registered with the Federal Aviation Administration (FAA). Most of the information filed with the FAA pertaining to aircraft ownership and registration is public information and easily accessed, if you know where to look. To gain co-ownership information, you will need to know your aircraft’s FAA registration number (also referred to as the tail number or N-Number - this information should be stated in your program provider agreements). Then you can simply go to the FAA web site (www.faa.gov) and then to the N-Number Inquiry page. Type in your registration number and you will get a list of the other co-owners.

Private Jet Gulfstream 350The problem with getting a list of the other co-owners from the fractional provider, or from the FAA website, is the lack of contact information. It is doubtful the fractional provider would give you anything but the name the share is owned under, and that is all the FAA provides via their website. To add to this lack of information, most fractional providers use their address, not the co-owner's address, on the registration document and bill of sale to provide an additional level of anonymity for the aircraft co-owners.

You do have other options, such as the subscription service JETNET Online (www.jetnet.com). With access to JetNet, you can search for the other co-owners and drill down for contact information such as an address, a phone number, or an email address. All you need to know to conduct the search is the name of another co-owner (if you happen to already know of one), the FAA registration number, or your specific aircraft manufacturer’s serial number. (Like the registration number, the serial number should also be stated in the program provider agreements.) 

Even with the ability to search FAA records and the availability of online services to mine additional information, you can still run into problems determining the real end owner. If the ownership is held in the name of a trust (and many are) or the aircraft share was financed by a financial institution and leased back to the owner, then the true owner or responsible party is masked.

Topics: fractional, fractional ownership, private jet, fractional share, private jets, fractional program, fractional jet program, fractional co-owner, jet co-owner, private jet co-owner