If you are thinking about investing in a private jet service, you may be considering a jet card or fractional ownership program. Here at NICHOLAS AIR, we can help with both types of services. Both have their benefits, but what is the difference between the two? And which one is right for you?
Read on for more information.
Short or Long-Term & Financial Commitments
One of the key differences between fractional ownership and jet cards is the length of your commitment.
Jet Card Commitments
With jet cards, you do not have as much of a monetary or term commitment as with fractional ownership. Hours are purchased in blocks for particular aircraft or you’ll have a deposit of a certain amount that can be deducted from when traveling on multiple aircraft types. Costs are based on your guaranteed hourly rate.
Once your card has been depleted, simply reup when you are ready and book your next flight. In the case of NICHOLAS AIR, your card also never expires allowing you even more peace of mind without having to worry about losing money or hours, offering a flexible solution that makes financial sense no matter how often you fly.
Fractional Ownership Commitments
Despite fractional ownership being less of a financial commitment than owning the whole aircraft, you’ll still have considerable upfront expenses, especially compared to jet card programs. You’ll also commit to an extended period of ownership based on how often you fly. Usually, the term commitment is for five years.
Acquisition cost is based on the size of your share in the aircraft and corresponds to the number of hours you plan to fly in a year. Simple monthly management fees and direct costs guarantee that the details are taken care of without you having to worry about them. These might include training, insurance, maintenance, and operating costs.
If you know how much you’ll need to fly for the next five years and are able to take advantage of the depreciation asset tax benefits, this option can make sense, but if your plans are likely to change, you may find yourself paying more than necessary.
What Should You Consider When Choosing Between a Jet Card or Fractional Ownership?
There are a few things you need to consider before deciding between jet cards or fractional ownership.
- Do you know how many hours you’ll fly?
- Do you prefer flexible flying arrangements?
- How often might you travel in different types of aircraft?
- Are you able to invest a larger sum up front?
If you prefer flexibility and convenience without making a costly initial investment, a jet card is right for you. If you know how often you’ll fly over an extended period of time, fractional ownership should be your first choice.
Consider the Cost of Jet Card vs Fractional Ownership
As aforementioned, you only pay for jet card programs as and when you need those hours. Fractional ownership involves paying for those hours and other costs that come with owning a share of a private aircraft.
Jet Card Program Costs
Many jet cards are paid as you go. Alternatively, you top up your card, and hours are deducted from the amount paid into your card program. You also do not have to consider any additional costs, unless the provider requires a membership fee. You only pay for your time aboard the aircraft.
Fractional Ownership Costs
Fractional ownership costs more than a jet card for several reasons. Primarily, unlike a jet card program, you are purchasing a share of ownership in the aircraft. With ownership, comes additional fees, but if the guaranteed availability and financial benefits of owning an aircraft make sense, then it might make sense for you. However, you’ll also have to pay for the following things as well.
- Direct Costs (Fuel, Maintenance, Operating Costs)
- An Upfront Capital Investment
- Potential Remarketing Fees
- Maintenance & Service Fees (Training, Insurance, Support)
Looking for a Jet Card or Jet Share? Choose NICHOLAS AIR
If you are looking to invest in either a jet card or jet share, feel free to visit our dedicated pages. We offer competitive rates and phenomenal customer service to all current and prospective Members of NICHOLAS AIR.