Featured Partner – Partners In Aviation
The Halves vs the Halve Nots: Is Co-ownership Right for You?
by Tom Bertels
Well, you’ve done it. You succeeded in becoming the owner and pilot of a jet aircraft, and a Citation at that. It’s an elusive dream for the vast majority of pilots for reasons ranging from financial wherewithal to piloting skills to experience. Other pilots cannot imagine that most of you pilots could ever want more — or less for that matter. But in reality, that’s not the case.
Let’s talk about the “less” first. There are a lot of turbine-powered aircraft flying fewer than 150 hours a year these days, and owner-flown Citations are no exception. Some owners simply do not care. For them, the benefits far outweigh the costs and having a jet is a no-brainer. But for some, the realities of under-utilization, especially the expense relative to the number of hours flown, can result in owners abandoning the dream they worked so hard to attain. And that is a shame.
Then there is the “want more” faction — owners with that nagging itch to move up to something newer, faster or more capable. While the need or desire to transition upward may be real, the urge to pull the trigger can be seriously dampened when it comes time to rationalize spending significantly more for the same amount of flying. Some say damn the torpedoes and do it anyway. Many others just cannot get comfortable with the idea, even though they are financially able. So, they do nothing, and that’s kind of a shame, too.
The Good, the Bad and the Ugly
Theoretically, one option that could help in either scenario would be joining forces with a like-minded, compatible partner. Wouldn’t it be great to have someone else pay half the costs associated with owning the airplane of your dreams? It certainly sounds good on the surface, but for better or worse, partnerships have earned a dubious reputation for conflict, entanglement and ugly breakups. Compelling economics aside, the all-too-common challenges of typical partnerships have made them something that most people, especially those with the financial wherewithal to go it alone, avoid at all costs.
Co-ownership Comes of Age
But what if there were a way to mitigate those pitfalls and risks? What if the co-ownership experience were so good that it felt like owning the airplane outright? What if cutting acquisition and fixed costs in half didn’t feel like making a deal with the devil?
Partners in Aviation (PIA) offers an ownership solution that’s been specifically developed to make those what-ifs a reality. The company, along with a who’s who of industry partners, has systematically tackled and resolved the issues that have contributed to DIY partnerships’ nearly universal bad rep. PIA focuses on identifying, vetting and matching co-owners; providing an innovative, comprehensive co-ownership agreement; and counseling clients during the aircraft selection and buying process. The services are fee based, and the company does not take sales or acquisition commissions. They also don’t collect fees unless they consummate a match.
PIA president Mark Molloy said, “PIA Co-Ownership is practical, sensible and fundamentally different from partnerships, both legally and structurally. Our job is to bring two compatible co-owners together within a given geography and help put them in the new or late-model aircraft that best suits their needs. Think of us as match.com for business aircraft.”
PIA’s proprietary co-ownership agreement is a legal document that is essentially a soup-to-nuts co-ownership playbook. It defines the relationship in detail, from aircraft acquisition to scheduling and logistics to exit plan. Everything is mutually agreed upon by both owners upfront, leaving nothing to interpretation or chance. The structure allows co-owners to remain autonomous in tax and title, eliminating entanglements that are literally built in to many partnerships.
Aircraft access is a major issue for owner-pilots, and the PIA Co-Ownership Agreement features a unique scheduling model that alleviates the concern. A locally based aircraft manager handles logistics and scheduling, so there’s no need for coordination or ongoing communication between co-owners. With each co-owner flying 150 hours per year or less, the model results in each owner having aircraft access for 90 to 95 percent of their desired trips.
Molloy says the compromise should be easy enough to rationalize. “Fifty percent of the cost with 90-plus-percent access is a pretty compelling value equation,” he said. “Making other arrangements two or three times a year is a relatively small price to pay.
“If you need the airplane on call 24/7/365, this is obviously not the program for you,” Molloy continued. “But if you fit the usage profile — roughly 100 to 150 hours per year — it’s certainly worth exploring and evaluating. We’re getting a lot of interest from owner-pilots flying turbine-powered airplanes, and CJP members are right in our sweet spot.”
Visit partnersinaviation.com for more information.