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Jet Set

Need a more convenient way to fly? Share the ownership of a jet.

Ask any entrepreneur and you'll get the same response--time is precious. Pose the question to frequent business travelers who log 100 or more in-flight hours a year, and they'll readily acknowledge that valuable hours are lost in transit on commercial flights due to delayed connections or inconvenient stops at an airline's hub. Wouldn't it be nice to have your own private jet?

Of course it would be a time-saving luxury. But purchasing a private aircraft is not a viable option for most entrepreneurs--even a low-end, seven-seat Cessna Citation S/II carries a sky-high price of $2.5 million (not to mention the additional monthly maintenance costs). And chartering a plane overrides any cost savings for those making many short trips over several days because you pay by the day, not by the hour.

Today, a more convenient, and surprisingly cost-effective, alternative is steadily gaining momentum with small-business owners and corporate executives nationwide. Known as fractional jet ownership, the concept is comparable to a vacation resort time share, minus the limitations: Individuals who fly between 50 and 400 hours annually buy a slice of a business jet and have the aircraft (or an identical one) available on an on-call basis, any time, anywhere. The larger your share, the more hours you have at your disposal. Under a typical plan, the use of a Cessna Citation V Ultra would cost a company $11,800 for 100 hours, plus $3,600 a month for incidentals such as fuel, insurance, pilot's salary and hangar space. There's also an annual $389,000 management fee. By no means is fractional ownership cheap, but it brings the once unattainable within reach.

"We run an on-demand system," explains Richard Santulli, CEO of Executive Jet Inc., a business aviation service company in Montvale, New Jersey. "[Owners] can call with as little as four hours' notice for an airplane at any one of the 5,000 general aviation airports in the country." These airports extend far beyond the reach of commerical airlines, which service only 500.

Santulli, a former mathematician, pioneered the concept in 1985 when he was looking into purchasing a private jet. "I realized it made no economic sense for me to spend $3 million for a jet when I'd use it only about 150 hours a year," he says. Instead, he created a way for a group of individuals to share the cost of a jet yet still retain guaranteed availability of the aircraft. In 1986, he introduced the program with a core fleet of eight planes; more than a decade later, his company has 115, and service has extended into Canada and Europe.

The trend has even taken off with American Airlines. Two years ago, the industry giant launched an affiliate company called Bombardier Business JetSolutions Inc., which offers a similar fractional jet ownership program. By 1998, the company expects to have more than 40 aircraft in its fleet.

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This article was originally published in the September 1997 print edition of Entrepreneur with the headline: Jet Set.

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