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A Pilot’s Guide to a
Successful Aircraft Partnership
by Jordan Sok
Whether it’s cars, clothes or work- space, consumers are finding new ways to lower costs every day in today’s sharing economy. While collaborating resources can certainly lower the bills, not everything may be worth sharing – but what about your aircraft?
Over time, owner-operators have experimented with a variety of sharing options, from traditional partnerships to fractional or membership models. Today’s pilot can go many routes in the sharing world to find the best fit for their needs.
When done correctly, the numbers show partnerships are a smart path in terms of net-cost and aircraft access. Very few assets have the high-dollar, low-usage combination of an airplane, so it makes sense to split the cost with someone else that also has low-utili- zation needs. The trick is finding that partner and doing it the right way.
So, what are the secrets to a suc- cessful partnership? We spoke to three recognized industry experts to get their opinions:
• Mark Molloy, President of Partners in Aviation – offers professional matching and legal structuring for aircraft co-owners.
• Daniel Cheung, Member of Avi– ation Tax Consultants – provides
customized ownership entity and tax consultation.
• Mark Rogers, President of Lone Mountain Aircraft – offers aircraft sales, acquisition and manage- ment services.
Here are five areas to consider before you partner:
1.Make Sure a Partnership
is Best for You.
While a partnership offers major financial advantages for the right can- didate, it may not be the best fit for everyone. For some, sharing isn’t worth it even if it can save money. For oth- ers, a partnership may not be the best solution in regards to access needs.
For example, someone f lying 50 hours or less per year will likely find a charter, fractional/jet-card or membership programs to be the most sensible cost-per-hour option. On the other hand, those f lying much more than 150 hours per year may find sole- ownership provides the best balance of net-cost and access. According to Molloy, it’s operators f lying 150 hours per year or less that should explore a partnership.
“Access is the key. With two op- erators each f lying 150 hours per year or less, both maintain access
comparable to sole-ownership at half the cost. This is where co-ownership makes the most sense.”
KEY TAKEAWAY: How much do you fly? If you fly 150 hours per year or less and can find an opera- tor with similar usage requirements, the value proposition of a partnership is compelling.
2. Choose Your Partner(s) Wisely.
Choosing the right partner(s) is key to a successful aircraft partnership. The general aviation world is full of horror stories because friends decided to partner. While a partnership can certainly be successful with the right pre-defined terms (see #3 below), it can also end poorly due to scheduling conf licts, maintenance disagreements and risks. When looking for a partner, consider the following questions:
1. Am I better off partnering with a friend or colleague – or someone with similar interests but no per- sonal relationship to me?
2.Can we agree on pre-defined terms in regards to schedule, maintenance, management and exit options?
3. What about adding a third or fourth partner to reduce costs further?
24 • TWIN & TURBINE / April 2019