as the economy lurches from bad to worse news, the aviation industry is holding its breath, waiting to see how this downturn will affect the business jet market and elements of that market such as the fractional share business. Conventional wisdom suggests that fractional share owners–bound by contracts, usually lasting five years–are not as quick to unload their shares as the owners of whole airplanes might be to sell their jets to raise cash.
While this viewpoint might not necessarily hold true because share owners have the option to sell their shares back after a shorter initial period, the fractional share industry is something of a bellwether for business aviation because it is one of the early entry points for new consumers of business aviation services. In the past few years, however, jet cards have supplanted fractional shares as a key way for users of business aircraft to see if they like non-airline travel. And growth in jet cards indicates that more people who can afford private jet travel are taking advantage of this option. Jet card buyers don’t have to tie up any capital beyond the price of the card, there is no ownership interest to worry about or insure and they don’t have to feel guilty about not using an expensive asset if they don’t feel like flying for whatever reason.
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