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Renting or sole ownership (or leasing) are not the only choices available for a pilot who wishes to acquire an airplane. For someone who may be unwilling or unable to take on the sole ownership of an airplane, forming a partnership to share the ownership of an airplane may be a compromise that eliminates some of the negatives of renting, and yet alleviates some of the difficulties and expenses of owning. A partnership may be as simple as two people sharing the ownership of one airplane, or it may be a large group of people sharing access to one or more airplanes in a club format. Sharing the ownership of the airplane with just one other person will allow each partner to experience the benefits of ownership in as undiluted a manner as possible in a shared situation, but the expenses of such an arrangement will be second only to the costs of sole ownership. Obviously, the larger the number of partners sharing an airplane, the less is the cost of ownership for each individual. But also, the greater the number of partners, the more diluted are the benefits of ownership. When considering a partnership, care must be taken to assure that the partners chosen are compatible with each other, and that each has the financial capabilities to handle their share of the ownership expenses. Any partnership should be founded upon a full and complete understanding of the responsibilities of each partner, all of which should be clearly defined in a legally binding partnership agreement. A relatively new type of partnership arrangement, called fractional ownership, involves an individual or business buying shares in an airplane from a managing company. Whenever the use of the airplane is required, the managing company is notified, and they have the airplane ready and waiting at the designated time. The number of shares purchased by a partner will dictate the number of hours of usage available to that partner. This arrangement offers a number of benefits over sole ownership, but it boils down to basically simplifying the ownership of an airplane. All a partner has to worry about is paying the upfront and recurring costs of their share(s), and the managing company takes care of everything else. |
