Exploring Your Private Flight Options

In Canada, there are basically three options when it comes to flying private: whole ownership, charter (including jet cards), and fractional ownership. Here, we’ll examine the pros and cons of each one.

Just as it sounds, whole ownership means that an individual or a corporation buys an entire plane and makes all related managerial decisions.

Perhaps they will work with a management company that will charter it out on their behalf. Or, they might opt to hire a chief pilot who will manage an in-house flight department. Either way, whole ownership carries certain benefits as well as important financial considerations.

Pros

“With whole ownership, you have maximum flexibility,” said James Elian, President and CEO of AirSprint Private Aviation. “Operations are completely on your schedule and you can configure your aircraft as you see fit, much like a high-end home. If you want multi-coloured seats, you can have them. From a regulatory standpoint, you are deemed to be a private operator, so you can maximize your flexibility when going into foreign countries and access shorter runways.”

Cons

“The biggest drawback with whole ownership is that you are taking on all of the associated costs – so not many people can afford it,” said Elian. “There’s the initial capital cost to buy the plane, plus all the fixed fees: maintenance, pilots, crew training, insurance. As well, when aircraft are in the shop for scheduled or unscheduled maintenance, you can’t use them.”

He added that it is difficult to find and train pilots these days. If you lose one, you might not be able to fly your plane – or, you’d be forced to find a contract pilot and pay premium rates.

One of the other considerations is fees associated with repositioning, said Elian.

“Let’s say the purchaser doesn’t own it alone – they share the aircraft with a friend. So they split the costs, but they also split the availability. One might take the jet to Florida and then the next day, it has to be flown back empty in order to pick up the other partner so they can go somewhere else. It can be difficult to optimize the mission profile of the aircraft without overspending.”

While Elian said the right 50/50 partnership can work, he also said it’s a challenge for owners to find the ideal arrangement.

When you charter an aircraft, you just pick up the phone and call for a flight.

“Think of the charter model like Uber,” said Rolland Vincent of JETNET iQ. “The growth of the big charter brands is something we’ll continue to see, with synergies and economies of scale.”

Here, we examine some of the advantages and considerations associated with chartering an aircraft.

Pros

Private aircraft chartering is essentially a simple, on-demand service.

“There is no capital requirement and no commitment,” said AirSprint’s James Elian. “You can request the aircraft type that is best suited for your mission, and the schedule is flexible. You can have the aircraft for a day or several days.”

In Canada, a small number of charter operators own their aircraft outright. However, the majority charge a fee to manage – and charter out – an aircraft that is owned by someone looking to recoup some of the costs of whole ownership.

Cons

Although you can certainly request what kind of aircraft you want and when, availability is not always guaranteed – especially with short notice and in peak travel times. Sometimes, you may have to settle for a different type of aircraft that might cost more.

Plus, charter customers are billed for so-called empty legs – “If you’re going to Florida for three weeks, you pay for the plane to take you down there, come back empty, and do it all over again when your trip is over,” explained Elian.

While convenient, chartering can also be expensive, since fees are calculated on a per-hour or per-mile basis (with the management company and the owner both needing to make money). There may also be hidden fees that are not included in the initial charter quote. Examples include airport and hangar fees, de-icing charges, onboard Wi-Fi service, repositioning fees, crew accommodation and expenses, and charges for wait time. It’s also a good idea to ask about the operator’s insurance coverage to see if it is adequate, as well as clarify their position on cancellation fees.

A word about jet cards...

Jet cards are essentially pre-paid charter hours, according to AirSprint’s James Elian.

“It benefits the charter company to have a jet card. They ask for a deposit of several thousand dollars to have access to a certain class of airplane at a certain rate. It’s like block charter, in a way. You get a bit of a deal on the rate or maybe some additional access privileges.”

Canadian jet card programs tend to be more about block hours, while U.S. programs can be more structured, perhaps even offering upgrade or downgrade privileges.

“The pros are the same as on-demand charter,” added Elian. “As far as the cons, you are putting down a significant amount of money with no asset attached to it. It’s something to be careful of, in terms of knowing who you’re dealing with.”

Added Rolland Vincent: “It’s a commitment a customer makes to an organization, so try to understand what’s going on and who’s behind it. I always like to think, ‘If I’m putting the most important people in my life on a plane, who is operating and controlling it? Who is behind this, who owns the operating certificate?’ I’d prefer someone who has skin in the game, not just a marketing company.”

Fractional aircraft ownership was introduced in the U.S. in the mid-1980s, evolving from the idea of sharing both ownership and the associated costs.

“The fractional world has been doing this for a long time in terms of the shared economy,” said James Elian. “It’s about better utilizing the aircraft and dividing the fixed costs to make private aviation more accessible to exponentially more people.”

Founded in 2000, AirSprint Private Aviation is Canada’s fractional ownership expert, with a fleet of 36 aircraft serving more than 500 Fractional Owners.

Pros

Elian listed the benefits of fractional ownership, including an optimized cost structure suited to an individual’s unique needs.

Essentially, AirSprint Fractional Owners have two turn-key options: a capital purchase or a five-year lease. They pay a one-time capital purchase fee or an initial refundable lease deposit, and then a flat annual overhead fee that covers the cost of maintenance, crew, pilots and everything else they will need. There is an hourly rate charged for the time spent on board, and lessees also pay an annual lease fee.

“For every three per cent of a plane you buy, you get 25 hours a year,” explained Elian. “You save on capital costs and fixed costs, while financial risk transfers to the operator, so costs stay low. The operator must arrange maintenance, insurance and pilots, as well as making operational decisions.”

One big advantage of fractional ownership? No repositioning fees.

“You can call from anywhere in North America and we will pick you up at no cost to you, and you only pay when you are on board,” said Elian. “You can also upgrade or downgrade your jet type, depending on your specific flight requirements.”

Additionally, annual aircraft maintenance, crew vacations or pilot sickness have zero impact on the travel plans of AirSprint Fractional Owners, because they are guaranteed access to a fleet of identical aircraft. They are also backed by the company’s 24 years of experience and professional accounting, service, maintenance and safety teams – instead of relying on just one pilot or an in-house team to determine operational safety.

Elian added: “We have over 300,000 hours of flight operations experience at AirSprint. We have 185 pilots who fly according to our stringent operating procedures, like the airlines, and we own more aircraft. In fact, in the first two weeks of the year, we log more hours on our types of aircraft than a typical operator would on that type in the whole year.”

Plus, as Rolland Vincent pointed out, fractional owners have the opportunity to “mix and match” their lift requirements – opting to fly commercial when travelling to a larger city, for example, and saving their own private jet hours for smaller destinations or trips with multiple stops.

Cons

There are a few things to consider with fractional ownership, said Elian.

To ensure fleet consistency, the exterior paint and interior colour scheme of your aircraft will be selected by the fractional operator.

As well, once a flight is booked, it must typically depart on schedule – at AirSprint, a customer’s Personal Flight Concierge can advise on the options applicable to each situation.

“Sometimes, operational costs in a fractional ownership program could be more expensive than whole aircraft ownership,” Elian pointed out. “It really depends on how you use the aircraft, with same day return flights being less efficient than longer trips in the fractional model.”