AR/GUS International, Inc. is a specialized aviation services company whose mission is to provide the aviation marketplace with the information needed to make informed decisions and manage risk. (Source: http://www.aviationresearch.com)

Block charter programs provide for charter services at a discounted rate in trade for bulk pre-purchase of charter services. 

On demand commercial air services are referred to as air taxi or charter services.

If your travel pattern is out and back within two days and you fly fewer than 50 hours per year, ad hoc charter is likely your most economical option. 

Advantages to Charter:

• The use of ad hoc charter for your business flights will give you greater flexibility as to when and where you can fly versus the use of scheduled air service. 
• With ad hoc charter, you control the departure time for your flight and can fly into and out of a larger number of airports than those served by scheduled air carriers. 
• Depending on charter aircraft available in the local area,, charter affords the ability to match the aircraft with the specific travel need.  
• There is no long-term commitment, there is no capital outlay. 
• Charter pricing also is generally very competitive, because charter customers tends to shop based on price.
• You can usually request specific crew qualifications (i.e., two captains with at least 500 hours in the type of aircraft to be flown). 

Disadvantages to Charter:

• You will not necessarily be guaranteed a flight on a specific aircraft, although, you certainly could request a specific aircraft and receive a confirmation prior to departure.  
• The shorter the notice, the lower the operator's ability to have access to a specific aircraft. 
• Many charter aircraft are primarily dedicated to support their owners.  These aircraft's trips are scheduled on an as-available basis and approved by the owner. 
• There is a high potential for variability in aircraft quality and service. 
• The aircraft that you charter could be of any vintage or layout and you may not know ahead of time all of the amenities it will contain.
• Charter companies have varying insurance coverage.

The most effective metric for comparing aircraft cost performance.  Cost per hour is not effective because of the differences in speeds among aircraft both in cruise and in climb/descent.

A trip where the aircraft repositions without passengers onboard.  Sometimes referred to as a "ferry" or "positioning" flight.

The frequency that an aircraft actually departs without unscheduled maintenance interruption.  Typical dispatch reliability for business aircraft exceeds 97 percent.  The best airlines have a 75percent trip reliability of arriving at the gate within 15 minutes of schedule.

The US agency responsible for certifying and policing civilian aircraft, pilot and operations.

Federal Aviation Regulations governing private or corporate non-commercial flight.

Federal Aviation Regulation Subpart K applies to Fractional Ownership Operations.

Fractional program aircraft may be operated under either the general operating rules of FAR Part 91 subpart K, or under the commercial charter rules of FAR Part 135.

Under subpart K of Part 91, the customer is legally responsible for ensuring that the aircraft is operated in accordance with all applicable laws and regulations, and may be held liable for damages arising from any accident involving the aircraft.

Most large fractional programs typically operate under subpart K of Part 91

Flight card programs are debit cards that resell either charter of fractional aircraft services. 

With a flight card program, a customer generally pre-pays for a certain number of flight hours (typically 25) on a certain make and model of aircraft, and thereby gains access to the fleet of the fractional program affiliated with the flight card program. 

Whenever the customer flies, the total cost of the trip flown is debited from the card.  When the pre-payment is fully used, the customer has no further obligation to buy another card.

Flight card programs generally offer all of the conveniences normally associated with fractional ownership.  With respect to flight cards tied to fractional ownership programs, there a significant cost premium (~17%) associated with the annual aircraft utilization being purchased by the customer.

The amount of time spent in the air.

The time a plane is unused.

Fractional ownership addresses major opportunities to improve the efficient use of business aviation. Companies can gain an incremental increase in trip capacity without adding the full fixed costs of an aircraft or crew. In addition, it allows companies to handle trips away from home base without incurring the cost of relocating an empty aircraft. (Source: "Business Results")

Fractional ownership combines many of the advantages, while eliminating many of the disadvantages, of whole ownership.  In a classic fractional ownership program, you purchase an undivided tenants in common interest in a particular aircraft over a specific term (usually 5 years).  Typically each 1/16th interest entitles the owner to 50 flight hours per year (although, newer programs are innovating on this concept to offer smaller interests with fewer flight hours or usage calculated based on the number of calendar days that the owner reserves the aircraft).  This concept has proven successful because an ownership share allows the owner to access the entire fleet of aircraft managed by the program, facilitating both scheduling flexibility and aircraft type/size selection.  This allows the owner to select the aircraft best suited to the mission on a flight-by-flight basis.  Fractional offers a consistent level of service and standardization.  Administratively, the program providers will have a specified point of contact making scheduling and changes easy.

 Anyone anticipating as many as 175 flying hours per year should closely examine fractional ownership.  This metric can vary upwards in situations where you need multiple cabin sizes and range capabilities, as well as “simultaneous usage” requiring multiple aircraft on a single day. The 175 hours metric is suggested because the effective hourly cost of traditional whole ownership and the cost of fractional ownership will approximate each other, depending on a variety of assumptions made.  Primary among these assumptions is the residual value of the aircraft after several years.

Some Advantages of Classic Fractional Ownership Include:

• External “turn-key” management; high level “concierge” style services.
• Guaranteed buy back provisions (less a “remarketing” commission).
• Interchange provisions allow access to multiple aircraft with different cabin size and range abilities.
• Greater degree of anonymity while traveling within a fractional fleet.
• Flexible operating parameters under FAR Part 91, subpart K, or alternatively, less flexible operating parameters under FAR Part 135 however, with enhanced liability protection planning.

Some Disadvantages of Classic Fractional Ownership Include:  

• Increased Federal taxes on operations.
• Due to the nature of the fractional model, the aircraft are constantly moving to meet the travel needs of numerous customers.  So as a customer, the flexibility of travel is somewhat limited.  Trip requests and changes have minimum notice requirements that can be limiting for some passengers.  Additionally, the need for punctuality around a given departure time will ensure aircraft and crew availability.
• Less scheduling flexibility and availability especially during peak periods of usage (i.e. holidays, major sporting events).  During those peak periods, trips can be outsourced to local charter providers on various aircraft.
• Fractional programs have a contractual term; at minimum 3 years.  The early termination provisions are expensive to exercise.  So if a business aviation option needs flexibility to change with the travel or company demands, fractional ownership has limitations.
• A fractional contract will allot a specific number of flight hours per year (i.e. 100 hours per year).  A limited number of unused hours will often rollover and some programs permit excess hours to be “borrowed” from the upcoming year.  Excess usage hours are typically limited per year with penalties above a threshold.  So it is important for a fractional owner to regularly track historic and projected usage throughout the term.

Source: Pete Agur, "Ownership vs Fraction vs Charter: An Overview," http://vanallen.com/index.php/articles/

An assessment of the needs of a company.

Requirement for more than one aircraft on a singe day.

En route productivity

Some Advantages of Whole Aircraft Ownership Include:

• Complete flexibility on scheduling usage on an ad hoc, short notice, basis (including operation under Part 91 of the Federal Aviation Regulations (FAR) – generally the most flexible form of aircraft operations).
• Direct influence on operational safety and service standards.
• Generally greater availability of tax deductions including those for depreciation and interest.
• Turnkey piloting and maintenance oversight through use of an aircraft management company.
• Complete customization of the aircraft interior and exterior

Some Disadvantages of Whole Aircraft Ownership Include:

• Inflexibility on choice of aircraft size/type to fit each trip; stated conversely, oftentimes aircraft size/type is determined by reference to greatest needs, and too much capital is invested with reference to the majority of trips.
• With whole ownership, it provides the greatest amount of travel flexibility but also the greatest amount of commitment financially and administratively.  As mentioned earlier, there are structures and operations (joint ownership, management companies) to reduce this burden.  But overall, the commitment level is still high versus fraction or charter..

Source: Pete Agur,  "Ownership vs Fraction vs Charter: An Overview,"
http://vanallen.com/index.php/articles/

Wyvern provides aviation safety auditing, consulting and information.  Operators, brokers, corporate flight departments, travel departments and fractional programs all look to WYVERN as their primary source of aviation safety information. Operators also turn to us for audits in order to receive a globally-recognized seal of approval that demonstrates a daily commitment to safety. (Source: http://www.wyvernltd.com/)