Are Aircraft Timeshares Ready for Prime Time?

Were you to guess what sort of FAA-approved, for-compensation aircraft access mode offers the best bargain, it’s unlikely that timeshare agreements would be your first or even final answer. That’s understandable. These venerable arrangements—not to be confused with fractional shares—provide lift at little more than operational cost and aren’t intended to be profitable; so, unlike charter, jet cards, and fractional ownership, they aren’t widely available or even well-known. 

That’s a fact that one recently introduced program, which is putting a new spin on this access model, aims to change. But before we peer into the future, let’s review the basics of aircraft timeshares.

Bearing no relation to the vacation-property access plans that are also called timeshares, aircraft timeshares have long been used by U.S. companies. These shares allow businesses to get paid for use by others of their N-registered and corporate aircraft without the need for an air carrier’s Part 135 approval and without putting the airplane on someone else’s charter certificate. Perhaps an operator has business associates whose access to its aircraft is beneficial to its own interests; or the usage may offer efficiencies for a flight department’s operation (for example, regularly filling what might otherwise be an empty leg). 

The FAA sanctions them under Subpart F’s 14 CFR 91.501(c), which covers multi-engine turbine aircraft weighing more than 12,500 pounds; lighter, non-turbine-powered aircraft are eligible via a waiver available since the 1970s through the National Business Aviation Association’s Small Aircraft Exemption (7897K). (No relation exists between this 501(c) and the tax-exempt organizations of the same alphanumeric, either, aside from their nonprofit natures.) 

The FAA Registry doesn’t track the population of timeshared aircraft, so their number today or historically is largely unknown. Those operating under NBAA waiver must register with their local Flight Standards District Office, which maintain their data individually, according to the agency.

Though no prohibition on profitability exists for the timeshare arrangements, the expenses covered make net gains all but impossible. The operator can’t share expenses with a timeshare member or charge by the seat, and it can charge only one lessee, or time-sharee for each such flight. Operators can, however, be guests on a timeshare member’s flights. Moreover, they can collect twice the fuel cost, a rule that the FAA says is intended to cover crew salaries, maintenance, insurance, and other non-reimbursable operational expenses. That doubtless sweetens the pot and gives owners at least something to smile about when fuel prices spike.

Advantages for Time Sharees

The advantages for the time sharee include access to an aircraft without the hefty markup of charter or jet cards, management fees, or other costs. The regulations place no limit on the number of hours flown or percentage of use, and there are no other accessibility restrictions. 

The particulars of each arrangement are up to the participants, but typically timeshares don’t provide the “anytime, anywhere” access that commercial providers offer. They aren’t listed or marketed, either: in contrast with vacation property timeshares, no one’s going to offer you a free flight in exchange for listening to a pitch when you land, then strongarm you into signing up for discount aircraft access.

But whether your company is an aircraft owner or you’re a timeshare member, paying attention to the rules is essential: in 2019, a company offering aircraft timeshares (Michigan-based Hinman Co.) agreed to pay a $500,000 fine for operating what the FAA maintained were illegal charter flights, as the operator charged for items not permitted by the rules. Timesharees should also know what expenses are and aren’t billable, at minimum as a way to gauge the legitimacy of any such arrangement. 

In addition to twice the cost of fuel (and oil and other additives), the operational items that can be charged under the regulations include crew travel costs; all flight fees, permits, handling, ground services, and other operational costs; and passenger ground transportation and catering. The charges must be accounted for on every segment, and as on all U.S. charters, 7.5 percent Federal Excise Tax is collected and remitted for timeshare flights.

If you own an aircraft, you can earn far more offsetting revenue by making it available for charter, but as noted, other factors might point you toward a timeshare arrangement. An aviation attorney or management company can help you make informed decisions. 

A New Type of Timeshare Program

If you’re looking to get onboard as a timesharee, ask your network of aviation people about locally based aircraft with flight patterns complementary to your usage, and put the word out to aviation attorneys and other professionals in your area. But the process could get easier if the type of timeshare program launched by AeroVanti in mid-2022 gains traction.

That company owns and operates a dedicated timeshare fleet of Piaggio P.180 Avantis, twin turboprops known for speed and big-cabin comfort, from bases in Sarasota, Florida, and Easton, Maryland. Timesharees pay for flights as per FAA regulations, but complementary to the aircraft, membership provides access to club facilities and activities, as well as to yachts and high-end cars, for which AeroVanti charges monthly membership dues ($1,000 for individuals, $1,500 for families, and $2,500 for corporate). The dues—the company currently claims some 500 members—fund the property, equipment, non-covered operational and administrative costs, and provide a profit margin.

The cost per flight hour that members pay under this arrangement comes to about $1,500, says COO Robert De Pol, but he stresses that flight access is designed as an adjunct to its lifestyle offerings, for people with flexible schedules. Flights may occur a day or two on either side of a requested date, and plus or minus four hours from departure time. But AeroVanti’s members enjoy the value proposition; they are not the type to hold a jet card for when an Avanti’s not available.

“We want to make this the country club of flying, that kind of camaraderie, with access to a lifestyle, and the added value of flying on the airplanes,” says De Pol. “It’s a different approach than what we see in the charter world, where people say, ‘I want to go to a football game. I need to be picked up at 5 p.m.’”

The Piaggio P.180 was also the featured platform of the AvantAir fractional program, which went bankrupt in 2013, leaving behind a fleet of cannibalized Avantis, so the aircraft arrives with some baggage already aboard, in terms of brand image and the airframes themselves. That “stigma”—as De Pol, a former U.S. Navy F-18 pilot, calls it—initially complicated financing and insurance for AeroVanti’s fleet, but the company’s subsequent operational history has eased institutional concerns, he says.

That’s underscored by a $100 million investment in October from Lafayette Aircraft Leasing to fund airplane acquisitions, which followed a previously announced $9.75 million Series A funding. Nine P.180s were in AeroVanti’s fleet as of mid-January, and the number could reach two dozen by year’s end, De Pol says. 

In the interim, AeroVanti is on the verge of launching a separate Part 135 service with two Phenom 100 light jets—acquired with the new investment—whose purchase and operational costs are similar to those associated with the P.180s. Though the services are initially operating independently, the plan is to put the Piaggios on the charter certificate as well, so AeroVanti can sell on the charter market the return or repositioning timeshare legs that now must be flown empty. Additionally, the company has forged a relationship with Piaggio USA, the Italian manufacturer’s American subsidiary, to ensure ongoing parts availability. It is also establishing a Part 145 repair station that will help maximize its fleet’s availability and allow it to offer authorized aftermarket service for the estimated 60 privately owned P.180s flying in the U.S.

Will this dedicated fleet membership model gain traction in the wider access market? Those who learn about it and are looking for more economical lift will surely hope that it can.