The term "fractional jets" refers to an agreement by which the ownership of an aircraft is divided between several people who each own a "share" of the entire plane. Before this ownership model was developed in the 1980s, the only way to have a private jet available at a moment's notice was to buy one's own. This was not only expensive because of the cost of the actual aircraft but also because of the maintenance bills that were incurred whether the plane was being used frequently or a just few times a year. The fractional jets model of aviation ownership not only guarantees nearly the same availability as owning an entire jet, it also splits the maintenance fees between owners as well. This results in the experience of owning one's own personal jet at a much cheaper price.
The businesses that provide fractional jets are able to guarantee usage of a jet at any time — with only about four hours to a day's notice — by having a fleet of the same jets, all of which are owned in such a timeshare-like fashion. They also have several extra jets more the number that are collectively owned by their clients to ensure the ownership experience of always having a plane ready. This means that each client will not necessarily fly the same exact jet every time, but the aircraft are designed in such a way that the owner cannot tell the difference. This leads to one benefit of fractional jets ownership: There are often jets located throughout the country, so the wait time is usually shorter than when one's jet must be prepared and then flown to the pickup location from its permanent location.
There are also several different levels of ownership that determine the amount of guaranteed hours of flight as well as on which days they are guaranteed a jet. For instance, an owner of a one-fourth share owns a good portion of the jet and therefore has privileges that a one-16th share client or even a one-eighth share client will not have. These privileges include access during peak periods of the year, such as holidays, as well as the ability to upgrade to larger and more expensive jets that are also a part of the company's fleet.
A share of a fractional jet typically guarantees a certain number of hour of use per year, such as 50 hours for a one-16th share, 100 hours for a one-eighth share and so forth. These hours typically are tallied by calculating the amount of time an owner spends in the aircraft and does not include the time the aircraft spends flying to the pickup location or back to base. In the same way that the cost of the actual jet is split between owners, the fractional jets model also splits the maintenance charges according to the share owned by each client. This is usually billed monthly and includes the pilots' salaries, upgrades and the like. On top of these monthly bills, an owner must pay for fuel for each trip.
The contract used for a fractional jets agreement has several components. The binder or deposit agreement is a deposit that the owner gives the provider company to hold his or her share of a jet. The purchase agreement solidifies the purchase of a share from the provider company. The management agreement describes the rights and obligations of the owner, including flight times, time waiting for the jet to arrive, fuel and maintenance costs and so forth. Finally, the master dry lease exchange agreement explains the differences between share amounts and the partners' differing rights regarding the ownership of the jet.
Other benefits of the fractional jets model of ownership include the ability for one to avoid the hassle of airports and drive right up to the plane. Private jets can also avoid busy airports and instead opt to fly into or out of smaller, local airports that are closer to the desired end-of-travel locations. The service is even better at the larger hubs of commercial air-travel, where private aircraft are handled separately and the amenities are better and more plentiful. Furthermore, in the modern era, perhaps the biggest benefit is the knowledge that one is flying in a jet that is more likely to be safe from any type of attack or hijacking.