Private helicopters can be a valuable travel option offering superior convenience, comfort, and control for high net worth individuals and families. Do you really need a helicopter? Let’s try and answer some questions.
Do you or your family:
- Travel often on short notice?
- Need to travel to areas that lack adequate commercial airline service?
- Have business interests located far from a major airport?
- Have vacation homes in out-of-the-way places?
- Have security or privacy concerns?
- Want more business or family time on trips?
- Need to work uninterrupted during the flight time?
If you answered yes to one or more of these questions, you could really benefit from use and enjoyment of a private helicopter.
Also, you may not need to actually buy a helicopter to fly privately. The truth is that the combination of costs and responsibilities of such a large purchase may have a big impact on your bottom line. For the majority of those who need private helicopters, there are indeed many attractive partial ownership options.
Purchasing one-sixteenth to one-half ownership of an aircraft provides adequate availability for many people. Fractional ownership requires a proportionately lower up-front capital outlay than full purchase. The availability of your helicopter (or a comparable one) is guaranteed, and you can choose to fly in a larger or smaller size helicopter to accommodate your specific travel needs.
Fractional helicopters are professionally managed and maintained. With fractional ownership, you generally are not directly charged for deadheading or repositioning costs, which are instead factored into the monthly and hourly charges you incur. Many fractional operators guarantee a buyback of the helicopter at fair market value (less a significant remarketing fee). Fair market value is dependent on resale prices at the time, so the fractional owners bear the risk of the residual value at the end of the program, which is usually five years. Helicopters used in fractional programs almost always have more hours than an average helicopter of the same age and, therefore, generally have a lower-than-average residual value.
On a cost-per-hour basis, fractional ownership is generally considered to be a fairly expensive way to access private aircraft. You also will need to provide more advanced notice of travel requirements than with full ownership. Fractional programs cover fixed costs by charging a monthly fee, which is set by the management company without owner input — although there are usually limits in the contract as to how much and how often the fee can increase over the term of the contract.
From a liability perspective, it is difficult to compare fractional ownership with full ownership of a helicopter. Some fractional providers operate their aircraft under the charter rules, such that the fractional operator is in operational control. Others operate under special rules for fractional interests in which the owner has operational control of the aircraft.
Joint ownership agreements
A joint ownership arrangement is an officially sanctioned agreement for more than one owner to share the cost of operating a single helicopter. It differs from fractional ownership in that it is an agreement between private owners without the assistance or support of a fractional provider, such that the joint owners are directly responsible for all aspects of flight operations and aircraft maintenance.
Joint ownership agreements have increased in popularity as the costs of private aviation have increased. Joint ownership agreements are somewhat of a cross between fractional ownership and full ownership. They are far less flexible than a fractional interest, but generally are more cost effective per hour.
Joint ownership agreements are an attractive alternative, assuming you can find a responsible and considerate partner, you can live with the fact that the aircraft may not always be available when needed, and you can secure a single helicopter that must be used for all purposes, regardless of need.
Chartering a helicopter, either directly from a charter company or through a charter broker, is often the most cost effective way to fly privately. Chartering a helicopter provides flexibility and no up-front or ongoing commitment of capital. It is ideal when flight usage is sporadic or difficult to predict. It also allows you to select the size and type of aircraft that is best suited to each specific trip.
Although use of charter brokers is often the least costly way to access private aviation, the flying experience can be inconsistent depending on the age and condition of the aircraft. Charter brokers generally own no helicopters themselves, but exist solely to match available aircraft with flying customers. They often take no responsibility for issues that arise after a flight has been arranged.
In certain ways, chartering may not be as convenient or consistent as some of the other options outlined above. You generally must schedule flights with more advance notice than a fractional share program requires and helicopters may be very difficult to charter (and more costly) during holidays and other peak usage periods. Charter operators are carefully regulated by the FAA/EASA and have strict safety standards to which they must adhere. However, there can be significant differences among charter operators in terms of the age, size, and condition of the fleet they have available. Generally speaking, the large national charter operators tend to have larger and newer fleets than local operators, increasing flexibility and consistency of service.
Charter operators often have numerous add-on charges associated with their flights (e.g. fuel surcharges, pilot wait charges and landing fees). Charter companies also usually charge for deadhead hours when the plane has to travel to pick up passengers or return to its home base after dropping them off.
Every helicopter owner is looking for the most efficient way to fly at the best possible price. Have you ever considered Malta for the purpose of helicopter registration and management? Malta is a full EU member state with an affirmed Fitch’s credit rating of ‘A+’ and its Aviation Registry is one of the largest and most reputable registers in the world.
Strategically located in the heart of the Mediterranean Sea, Malta is at the forefront of aviation industry for the variety of services it can offer, its favourable tax regime and its high regulatory standards. Along with a robust and stable political environment, the Island offers professional infrastructure, high levels of service quality and experience in aviation finance.
Whether you are a wealthy individual, a business owner, an entrepreneur or any other type of aircraft user, the issues involved in flying private are complex. Before finalising your choice – whatever it may be – we strongly recommend that you consult with aircraft specialists, including tax specialists, buyer brokers, and lawyers who understand the complexities of private and commercial aviation.
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