Fractional aircraft ownership and jet cards — who they suit

Between one-off charter and owning an aircraft outright there are two formats that are little known in Russia: a share in a specific aircraft, and a card with prepaid hours. Both solve the same problem — guaranteed access to an aircraft without the full cost of ownership.

Fractional ownership

You buy a share in a specific aircraft and receive the right to a set number of flight hours a year. On top of the price of the share you pay a monthly management fee and an hourly rate for the flying you actually do. At the end of the programme the share is bought back or sold on.

• upside: guaranteed availability within an agreed notice period, a predictable budget, an aircraft whose condition you know
• downside: a higher entry cost than a card, leaving the programme takes time, and the residual value of the share is whatever the contract says it is

Jet cards

A card is prepaid flight hours at a fixed rate on a particular type or class. There is no ownership here: what you buy is priority on availability and an hourly price known in advance.

• upside: easy to enter and to leave, no operational worries, a clear cost per hour
• downside: money up front, the terms on availability and on which aircraft you actually get need reading closely, and what happens to unused hours when the programme ends is a clause in its own right

How to choose the format by annual flight hours

• up to 100–150 hours a year — ordinary charter, nothing beats it on money
• 150–300 hours — a jet card or a share: guaranteed availability starts to be worth more than the difference in rate
• from 300 hours — your own aircraft, placed under management with an operator

The figures are indicative: where the real line falls depends on your routes, on seasonality and on how critical it is for you to have an aircraft ready within a few hours.

I am a working operator, and I talk clients out of purchases they have no business making. My advice is to start the sums from running costs: on my information they come to 10–20% of the aircraft's value a year — parking, crew, pilot training, the operator's services, fuel. At the 300–400 hours a year that are usual for a business jet those costs spread across enough flights to make sense; in a share or a card the running costs sit with the programme and reach you inside the fee or the hourly rate.

What to look for in the contract

• the guaranteed notice period for an aircraft and what happens if it is missed
• which dates are excluded — holidays and peak periods are usually carved out separately
• how the flight hour is counted: block time, airborne time, with a minimum charge
• what becomes of unused hours and the terms for getting money back
• the procedure for leaving the programme and how the share is valued on buy-back
• what you get if another type is substituted while your aircraft is in maintenance

Frequently asked questions

Do such programmes exist in Russia?

The market is narrow, and public programmes of the Western kind are barely present. It usually works as an arrangement with a particular operator: the guaranteed notice period and the hourly rate are written into a contract drawn up for you. There is no product on the shelf; the terms are assembled from scratch each time.

What do I do if the aircraft is not there at the agreed time?

The operator substitutes another machine, its own or a subcontracted one. The arguments start over the class of the substitute and who covers the difference in rate when it is a bigger aircraft than yours. Settle it in advance: which class counts as equivalent, how much notice you get of a substitution, and what you receive if there is nothing to send at all.

What happens to my money if the programme shuts down?

Card hours are paid up front and sit with the operator, so if it stops trading you join the general queue of creditors. Ask before you pay where the advance is held and what secures its return. A share leaves you on firmer ground — you hold a claim on property — although selling it out of a collapsing programme takes time and fetches less than the paper value.

How is a share better than a volume contract with an operator?

A share gives you one known machine: you know its condition, its cabin and your place in the queue for availability. A volume contract with an operator is cheaper to enter, and the aircraft can be a different one each time. The choice comes down to how much the same cabin and a predictable condition matter to you.