20. How should I calculate the total cost of fractional ownership?

Model the full holding period, including acquisition, recurring charges, usage and exit—not merely the occupied hourly fee. NetJets’ published cost explanation distinguishes monthly management fees, occupied hourly fees and variable fuel charges, alongside the acquisition or leasing structure. Other programmes must be modelled from their own terms. (netjets.com)

Use this analytical framework:

Undiscounted holding-period cash cost = acquisition payment + recurring fees + flight charges + applicable extras and taxes + financing costs − net exit proceeds.

Then prepare a separate economic comparison that recognises the timing of cash flows and any opportunity-cost assumption. Do not double-count financing costs and a cost-of-capital adjustment.

Test at least three scenarios:

• Expected use: the routes, aircraft categories and utilisation you currently anticipate.
• Lower use: fewer trips, with fixed commitments continuing as the agreement specifies.
• Changed mission: larger groups, longer flights, different geography or greater peak-date demand.

For exit, obtain the valuation method, earliest termination date, notice period, deductions and payment timing. Do not assume that the original share purchase price will be recovered.

Keep any tax analysis separate until an aviation tax adviser has assessed the actual purchaser and use. A potential deduction is not a reduction in the supplier’s invoice and should not rescue an otherwise unsuitable access model.