Any way you slice it, jet ownership is a major investment. It’s important to do it right! This month’s blog features the wisdom of an aviation expert, our own David Riley. Read all about it!
When it comes to aircraft ownership, the main two options are buying a plane outright or selecting fractional ownership. As a fractional owner, you own part of a plane and the ability to use it and split all associated cost with a group of people.
We sat down with the RAI Jets Director of Operations David Riley to learn more about the myths, advantages and disadvantages of fractional jet ownership and how to get the most from your investment in private aviation. David has more than thirty years in of experience in the industry and has owned many jets during his career. He helps customers acquire as well as set up management for their jets.
So what do you think are the advantages or disadvantages of fractional ownership versus full ownership?
Most people choose fractional ownership because at first glance it sounds like a deal. It is much less of an investment than buying your own plane, so it’s less scary. You are able to use the jet when you want and still claim ownership. You are part of an exclusive “club” and most people like that too. And the system is set up so that you only pay when you use the jet. But there are disadvantages to these contractual agreements and to never flying an airplane of your own. For example, your contract may require payments regardless of your flight time. You may not always have access to the jet when you need it. You never really know much about the person flying the plane. Your fractional ownership of a single aircraft limits you to the size of the jet you have contracted, and those “fixed” costs usually change over time. However, the biggest disadvantage that I see is that whatever you are paying to fly “per hour” on “your” plane is typically exponentially more than you would be paying to fly on your own plane. I feel like fractional ownership is a little like renting from someone when you could be the landlord. You are missing out on an opportunity.
Are you speaking of buying a plane and leasing it back to an aircraft management company?
Yes. As a part 135 operator, RAI Jets offers the opportunity for aircraft owners to add their qualifying aircraft to our Air Carrier Certificate and allow us to charter their jet when it’s not in use. This revenue can reduce an aircraft owner’s standard fixed operating costs anywhere from 30-100% depending on the jet charter market at the time. Right now, the market is up. Jet charter is seeing a rise of about 30% usage because of the pandemic. People are seeking alternatives to commercial airlines and we are keeping our owners’ aircraft very busy. In fact, in some cases our clients are covering their operating costs 100 percent and we are writing checks back to them!
What about all the other services that a jet owner needs? Do your jet owners still need to work with other companies?
There’s no reason to do so. The aircraft management services at RAI Jets are comprehensive. We handle hangar space, maintenance, inspections, certification, hiring and training pilots, fueling, charter operations and even concierge, and we offer it all with economies of scale. You will usually see the same pilot in the cockpit of your plane and you still have the use of your aircraft when you want to fly, without the restriction of other schedules. Plus, you get the benefit of all of our services. One customer, whose time was very valuable, was coming to us for some a la carte services when he realized he was spending so much time arranging rental cars and hotels at his charter destinations that using our concierge service made sense. Now, we exclusively manage his aircraft.
How does RAI Jets compare to other aircraft management companies?
We’re smaller, but we work with a vast network so you get all the advantages that come with that. Based at Kalamazoo/Battle Creek International Airport, we offer affordability with strategic positioning near major hubs like Chicago, Detroit, Indianapolis and Milwaukee, and smaller destinations throughout northern Michigan. Our clients have been with us for years because we put their needs first. We are not a vendor; we are your partner with a vested interest in the success of your aircraft. And that’s priceless!
If you would like to learn more about aircraft management and how RAI Jets can meet your needs, reach out to David Riley at 800-247-2834.
We were also glad to be able to interact with educators about the job opportunities available in the industry. Our president, Becky Bakeman encourages students to think beyond the cockpit when it comes to careers in aviation.
“People think of pilots when they hear the word “aviation” but there are many opportunities in the industry, from technicians, to dispatch and scheduling, to flight crew,” she said.
Of course, the big question on everyone’s mind is will aviation ever rebound to its normal levels? The answer is anyone’s guess. But for now, with our safety measures in place, general aviation with RAI Jets is a solid alternative to the commercial airlines.