A New Fractional Vision Explored

Last year I did a long-term evaluation of a small-airplane fractional ownership program run by OurPlane. During the nine-month period, I was for all intents and purposes an OurPlane owner, flying a new Cessna 182 along with the rest of its part owners. In short, the experience was a good one, and it confirmed my suspicion that fractionals could be a big part of airplane ownership in the future. As I discussed in that series of articles, the basic concept, if it can be successfully executed, makes a lot of sense, as it allows pilots like me who couldn't afford an entire new airplane to get into the game. It also lets people for whom the money isn't the deciding factor get less than a whole airplane and have it professionally managed in the process.

This month we begin a long-term evaluation of another small-airplane fractional provider, AirShares Elite, which has a different approach to the business than OurPlane. Headquartered in Atlanta (PDK), AirShares sells fractional ownership in just one airplane type, the Cirrus SR22 high-performance single. Instead of buying an entire, nicely equipped SR22 for around $375,000, AirShares Elite customers can buy just a part of the airplane, anywhere from one-eighth to one-half. (For people who need more than that, a whole airplane makes better sense.) Then they can let AirShares take care of all of the management details, which is arguably the best part of the program. Currently, AirShares has locations in Atlanta, New York, Birmingham and Chicago, and it plans to continue its expansion. It has an agreement to purchase 25 SR22s; it has already taken delivery of 13, and it plans to accept the rest over the next 12 to 18 months.

What are the advantages of owning a fraction of an airplane versus buying the whole enchilada? To run the risk of stating the obvious, it's cheaper. Of course, you're getting less airplane, but that's precisely the point. You don't have to be around aviation long to figure out an entire airplane is simply too much airplane for most pilots, many of whom are lucky to fly 100 hours a year. With fractionals, you pay for only as much airplane as you need. (There are other advantages, but more on them later.)

Buying a share in a new airplane is a lot more expensive than renting an airplane. It's not really a fair comparison, though, as it's nearly impossible to find a rental airplane even remotely as nice as a new SR22. Even if you can, the restrictions and requirements generally placed on renting such airplanes, such as minimum daily charges, weekend and overnight fees and long checkouts, can be prohibitive. And if that airplane goes out of the rental fleet-and there are a lot of potential reasons it might-you're out of luck and you need to start the process over, if you can find another suitable aircraft. So while renting an airplane of some kind is certainly an option for most pilots, renting a really nice, never mind new, airplane, isn't.

As I said, a share of a brand-new airplane isn't cheap. It costs $60,000 for a one-eighth share in a nicely outfitted SR22. The airplane comes with dual Garmin 430s, Stormscope, Skywatch traffic, a two-axis S-Tec 55X autopilot with altitude preselect, a Sandel electronic HSI and more. On top of that equity cost, every month eighth-share owners pay a management fee of $675. (Fees vary by region, from around $650 to $750 per month.) It also costs approximately $60 an hour to fly, which pays for fuel and oil. The company says that ownership is equivalent to buying a "luxury" automobile. After you pay the monthly and hourly fees, that might be a stretch, but not by much, and there's no doubt that the AirShare's approach is far cheaper than a whole airplane.

Figuring around 600 hours of use a year among the eight owners, it's clear that the SR22 will need an engine before the four years of the fractional contract are up-the Continental IO-550 in the SR22 has a 2,000-hour TBO. That cost, like all other maintenance costs, is covered by AirShares.

There are tax advantages to owning a piece of the airplane. While AirShares is understandably reluctant to offer tax advice, fractional owners can obviously depreciate their shares just as whole-owners can. At the end of the four-year term, the owner gets the share of the residual value of the airplane-AirShares takes a seven percent broker's fee-and the owner can then turn that residual over into a new airplane or not. (For those who want to move up, AirShares will credit the full, original equity investment toward the price of a share in an Adam A500.)

What you get for an eighth-share investment in an SR22 is 75 hours of flight time a year, including 21 overnights. AirShares takes care of the rest, providing a long list of services that includes scheduling the airplanes, maintaining them, managing the partnership agreement that defines the fractional concept, taking care of registration, including the payment of all fees and taxes, coordinating and providing customer training, and providing a number of quality of life services that make flying your SR22-and flying in general-a lot easier.

In addition to fractional ownership, AirShares offers a second option, an exclusive-use license for customers who for some reason don't want to be on the airplane's registration. The experience for those customers, says AirShares, is identical to that of its fractional owner customers.

According to AirShares, there are several reasons for the single-fleet approach, not the least of which is the 310-hp, 180-knot SR22, which the company sees as the ideal fractional airplane because it's fast, well equipped and modern. The program isn't really for recreational pilots, the company says; instead, it's for pilots who use light airplanes to go places, whether for business or for pleasure, so utility is of prime importance. Pilots don't have to be IFR rated to buy a share, but AirShares strongly encourages it. Owners can also fly with an instructor pilot, and AirShares maintains a list of qualified pilots in the local area that owners can call to get some instruction, work toward that instrument rating or just fly along with.

Perhaps the biggest benefit of the single-model approach is that customers can fly any one of multiple, identical airplanes, making it more likely that an airplane will be available when they want it. AirShare's chief competitor, OurPlane, likes the fleet concept, but it has to date mostly put single aircraft in a location. To be fair, having one airplane during my evaluation period worked well. AirShare's philosophy is to place at least a couple of airplanes in an area before it sells shares, though it doesn't rule out starting with a single airplane in a promising city to kick start a program. So far, it has, or is in the process of getting, multiple airplanes in its locations. As I said, it already has a total of 13 SR22s, with a couple more due to arrive shortly. The company has eight airplanes in Atlanta (Peachtree); there's one with another on the way in Chicago (Palwaukee); there are a pair of '22s in Birmingham; and there are two airplanes in the New York area, one at Westchester County and the other at Caldwell, New Jersey. AirShares says that its overall occupancy rate is between 80 and 90 percent.

So far, all of the company's SR22s are identically equipped, so pilots should see no difference between the airplanes, except for the call signs. (In fact, at this writing AirShares hasn't decided when to begin offering the SR22 version with the Avidyne Entegra flat-panel avionics suite-if it does, it will likely transition to an all-PFD fleet as airplanes are retired.) The identical equipage is an integral part of AirShare's plan; pilots have access to a fleet of airplanes but only have to train in one type, just like the pros do it.

In the New York area, because the airplane the customer will be flying isn't always at the home airport, AirShares provides repositioning services as part of the package. If the only available SR22 is in New Jersey and the owner is in White Plains, they'll fly it to him.

Operating new airplanes, the company says, is central to the program. For one thing, because the company's business plan is all about red-carpet treatment for its customers, only new airplanes, it feels, will do. And because new airplanes are covered by a manufacturer's extended warranty, AirShares can more easily predict how much it will cost to operate its fleet during the airplane's time at AirShares.

Another important factor is economics. With one type, AirShares doesn't have to duplicate efforts. If there's a problem with the airplane, they deal with a single company-Cirrus. Often, it's a single person at the factory they'll call for help. AirShares has also been able to develop considerable expertise on the airplane, which is a plus in terms of maintenance, training and support.

I Get My Feet Wet

To see just how workable and how desirable the program was, I signed up with AirShares for a nine-month evaluation. For that time I would be, for all intents and purposes, an AirShares customer. I would get exactly the same number of hours and overnights, I'd be entitled to the same benefits as any other owner and I'd go through the same training program. My plan was to fly the airplane both for business and personal use. From what I understood, my use profile would be pretty typical of AirShares customers.

After signing the paperwork, I set up a training schedule. AirShares offers the 10 hours of ground and 10 hours in the air with an instructor and an airplane-the time doesn't count against your annual total-for $1,800. The following week I met with Darin Laby, head of training for AirShares Elite New York, at Westair, the FBO at Westchester County Airport (HPN) where AirShares keeps an SR22. Westair has a brand new building on the west side of the airport at HPN.

I'd actually prepared ahead of time, using computer based training by V-Flite to bone up on the operation of the Garmin 430 navigators and software by Electronic Flight Systems to study up on the operation of the Stormscope and Skywatch. It turned out to be a good thing I did. Darin tells me, and folks at Cirrus have echoed this, that learning to use the avionics is one of the biggest challenges new SR22 pilots face. While I've had a good bit of time flying in nicely outfitted GA airplanes, there was still a lot for me to learn. Darin, luckily, proved to be an excellent instructor, and I found the AirShares ground sessions dovetail nicely with the flying lessons. Darin even made up a compact disc for me with several useful programs on it, including a weight-and-balance utility, a Garmin GNS 430 simulator and a copy of the SR22's POH so I could study at home, too.

The plan was to get me proficient in flying the SR22, but the weather couldn't have been much worse. It was bitter cold, with wind chills well below zero. On a couple of our training days, the wind was gusting up to 35 knots, and the air was rocky from takeoff to touchdown. In fact, until after I'd finished my training, I wasn't aware that the SR22 could land without a stiff crosswind.

While 10 hours seemed like a lot to me at first, every hour was worthwhile, as we practiced flying the airplane in very much the same way I normally fly it. In addition to doing the basic airwork, Darin and I flew a lot of approaches. He had me wear the hood and work on hand flying multiple GPS approaches. Later, we concentrated on using the autopilot. I learned the ins and outs of the Avidyne multifunction display, which shows graphical engine instruments and features a "lean assist" utility for setting the power to within a few degrees. We even had the chance to get some flying in actual instrument conditions, including a full ILS with course reversal.

During training I also learned a little about AirShares' customer service. Whenever I arrived at HPN, the airplane, which is kept outside, was plugged into the engine pre-heater, and Darin always had the conference room ready and the laptop plugged in and ready to go. And it was on my third training flight that the fleet approach made immediate sense. When I learned on the pre-takeoff check that the trim was frozen, we taxied back in. Even though the problem would take a couple of days to fix, there was little down time for me; we simply used the other airplane, which Darin ferried over from Caldwell.

By the end of my ten-plus-ten hours of training, I knew the airplane pretty well, and I felt ready to go flying, which is the entire point after all.

In the next installment, I'll try to answer the question: Is it possible to share two really nice cross-country airplanes with 15 other people? Stay tuned.

You've just read Part I - A New Fractional Vision Explored - August 2003: Click here for Part II - A New Fractional Vision Explored - February 2004 Click here for Part III - The Jury's In: AirShares Elite SR22 - June 2004