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The Company Jet is Becoming a Thing of the Past
http://www.travelblogs.com.au/articles/2256/1/The-Company-Jet-is-Becoming-a-Thing-of-the-Past/Page1.html
Jason Hall
We offer quality rentals at affordable rates. 
By Jason Hall
Published on 12th January, 2012
 
Why companies are getting away from purchasing corporate jets

The Company Jet is Becoming a Thing of the Past

Fractional aircraft ownership is the next logical step in having the ability to travel and fly where you and your clients need to go without purchasing an aircraft of your own; with which comes all of the expenses that go along with maintaining the plane and the flight crew.  The costs for maintaining a plane and hiring a crew to fly the plane and storing the plane can add up, and much of the life of the airplane is spent collecting dust in the hangar or being serviced. Along with a percentage of an airplane, value, reliability and convenience are what you are purchasing with a fractional ownership program.  The initial investment will depend directly on the percentage ownership that you require, with 1/16 being the industry standard smallest amount.  This percentage will give you access to 50 hours of flight time whenever you need it.  The larger percentage of the plane that you purchase, the more flight time you will have access to.  The plane that you fly on may not necessarily be the serial numbered plane that you own a share of, but it will be a comparable model or even an upgraded model, that is ready for you in as little as four hours.

With this ability to purchase what you need, the hours that you require, you have an opportunity to travel like you own the jet, without the shortcomings and expenses involved with owning the aircraft.  This can be a benefit to a smaller or medium sized company, but it can also be a value to a larger company that doesn’t want to tie up the resources and capital in plane ownership.  Speaking with a Regional Finance Manager with Fastenal, one of the fastest growing industrial supply companies in the US, with over $1 Billion in annual sales and nearly 2500 locations throughout the US, Canada, Mexico, China and Europe, she states that she didn’t see the value in tying up millions of dollars in the purchase of private planes, and that a fractional ownership gives the company the flexibility that they require.  The company has made a name for itself in the way that it doesn’t spend unnecessary money and rewards its shareholders by running lean and debt free.  The company consistently grows at over 25% annually, and did not have to cut its work force or close a single store during the recession of the last three years.  The company regularly needs to jet their VP’s and CEO around the country and around the world, and with a fractional aircraft ownership program designed for them, they are easily able to do so without the monthly upkeep costs and retaining a flight crew for a trip on a moment’s notice.  The money can then be reinvested directly into the company.  The unnecessary expenses are avoided or at least minimized with a fractional ownership program, and the company’s share in the plane can always be sold back after the minimum commitment is fulfilled or the program can be upgraded if necessary, adding additional flight time or upgrading to a larger plane.  And, because the program includes a fleet of planes, one is always guaranteed to be available for your flight, even if the one that you own is under maintenance or being repaired.

Businesses of all sizes, from smaller, multi-million dollar companies to billion dollar companies can all benefit from a program such as this because of the variety of programs available. This is a way to travel in a manner that is necessary to conduct business without being wasteful.  The money invested in the plane is liquid and can easily be cashed out after the minimum commitment is fulfilled and the monthly expenses are minimal compared to what owning an aircraft outright would cost.  If, after the minimum commitment time is concluded, which is usually a two year commitment, the program is not working out for the customer; whether they need more time in the air or do not think that the investment is worthwhile, they can cash out their share to another buyer.  Some companies, like one of the first private jets company to offer fractional aircraft ownership; will buy back the share at fair market value. This program nearly put them out of business during the economic downturn of the last three years, but they stood by their commitment and have emerged an even stronger player in the chartered jets community.  But for the consumer, it truly is a win-win situation for the corporate flyer that is ready to step up to the next level of air travel.