The Benefits of Partially Private Aviation

Owning even a fraction of a jet brings more than just bragging rights.

Private jet ownership | BCBusiness
While fractional private jet ownership is also a fraction of the cost of full ownership, the $850,000 minimum is still more about convenience than cost.

Owning even a fraction of a jet brings more than just bragging rights.

When your private jet lands in Cabo San Lucas at the resort town’s new airport that’s reserved exclusively for private aircraft, a greeter meets you with a tray of cervezas. That’s one of the examples Darryl Saunders, vice-president of Aurora Jet Partners, gives of the many perks of private aviation. The new company, created in 2011 through the merger of Edmonton-based Morningstar Partners Ltd. and Ledcor Group’s Opus Aviation Management Ltd., offers that experience through fractional jet ownership — essentially time-sharing for planes.

The fractional ownership model is not new. Morningstar was doing it prior to the merger, and Warren Buffet-owned NetJets Inc. has offered it in the U.S. since 1986. The target customer, says Saunders, is a business traveller who flies between 50 and 100 hours a year — enough to make ownership a better deal than chartering, but not enough to justify owning a whole plane. Aurora’s cheapest option is a 120-hour, one-fifth stake in a four-seat Embraer Phenom 100 for $850,000. That’s the equivalent of more than 500 round-trip first-class fares from YVR to Cabo, so the value proposition is still more about convenience than cost.

One financial advantage is the tax benefit. Bill Clark, an aviation industry lawyer and former director of the Canadian Business Aviation Association, explains that the traditional model for shared jet ownership is to buy a share in a company rather than share in an individual jet. The advantage of a program such as Aurora’s is that owners can claim a portion of the depreciation of the plane as a tax deduction.

Aurora’s roughly 50 fractional owners currently share five planes (two Phenoms, two nine-passenger Hawker 900XPs and one 13-passenger Bombardier Challenger 605), and four more have been ordered. When fractional owners are ready to travel, they call the “Jet Desk,” provide their schedule and the names of their guests, make any special catering requests and wait four to eight hours for the plane to arrive.

Except it might not always be their plane, though Aurora guarantees that there will be a jet available. If another fractional owner took a golf trip to Maui in your Phenom, good news! Your quick turnaround Fort Nelson trip to check on your shale gas-fracking operation could be aboard a spacious Challenger, capable of mach .82.

Fort Nelson is exactly the kind of place Aurora expects its clients to be headed. Its jets are used far more for work than for play, especially as a means of efficiently travelling to far-flung operations in the mining and energy sectors. “The efficiency you can get out of an aircraft in a business sense is tremendous,” Clark says. Which is why B.C.’s resource boom makes Vancouver a good location for one of the company’s two bases (the other is Edmonton). “I think most of our growth is going to come from Vancouver in the next couple of years,” Saunders says.

Even if the reality is more mundane, the idea of just hopping in the jet for a weekend jaunt to Vegas is a big part of the sell. “That person always has those bragging rights: ‘Yes, let’s go use my jet,’” Saunders says. “And there’s no way that anyone would know that it isn’t his jet. He drives up to it, everyone knows him by name, he gets on it, he knows the pilot and that ownership experience is pure.”