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Your private aviation risk-return factor, including financial, legal, and safety, will be based on contractual agreements between you and your aviation provider including charter, membership, fractional and full ownership.

The documents behind your business jet travels will contain familiar language, foreign language, and fine print that defines every detail down to the penny and decimal percentage. This means that most principles, partners, and passengers will find themselves standing far outside of their circle of competence.

Here, an experienced aviation attorney, sitting on your side of the negotiating table, can help you avoid costly aviation lessons.

Our guest on this episode, attorney James Butler, shares his private aviation legal expertise, looking beyond the fancy brochures, boilerplate contracts, and low-ball valuations to help ensure your business aviation ventures are low risk, high value.

James is a cum laude graduate of the University of Chicago Law School and holds a Master of Science degree in Government from the London School of Economics and a Bachelor of Arts degree from Colorado College. He’s clerked for the U.S. District Court in Chicago, practiced with Arnold and Porter in Washington DC and operated the Law Offices of James D. Butler since 1992, specializing in corporate and business transactions.

In 1997 James launched Shaircraft to provide private aviation legal expertise to successful executives, athletes, and businesses. James has been featured on CNN, Fox, Washington Business Journal, the Boston Globe, Fortune Small Business, AIN, BCA, BJT, NBAA and more. In this podcast episode, James covers:

New Private Aviation Access Points Creates Need for Legal Advice

No long ago, the only way to fly private was via. full ownership or charter. Then, in the mid nineties, aviation regulations began allowing new access points for business aviation – disrupting the market with the advent of fractional shares, jet cards, and private jet membership programs. These new access avenues created the need for combined legal and aviation expertise and advice.  Shaircraft was born.

Shifting Fractional Jet Ownership Risk

The appeal and cost-certainty associated with the fractional share model attracted many people to part-ownership in private aviation. Why? Most of the pricing risk was managed by the provider vs. the owner. However, as the fractional industry matured, contracts and part-ownership models shifted cost certainty risk from provider to owner.

Executive Travel Experience vs. Aircraft Ownership

The majority business jet travelers want an “executive airline,” to take them from A to B. They do not desire another asset to manage. But, because they have succeeded in asset management (the asset being their business), they fall victim to failed thinking in aircraft ownership/access: “I can manage this private aviation thing on my own” they believe. But…

Private jet owners do not want financial surprises.

Often, private aviation is far outside an owner's or principle's circle of competence. Although these individuals are ultra-successful in their business ventures, they typically lack the niche aviation knowledge to navigate the private aviation sphere without a very costly eduction. Here, the details trump high-level strategy and execution associated with their other financial successes. Consider:

• What can be done to tailor a fractional contract to your needs?
• Where is their room to negotiate?
• What possible enhancements can be added to a fractional contract?
• How do my travel patterns influence my fractional aircraft decision?
• Do I need all the features and benefits offered?

Don't Buy Too Many Hours

One common mistake fractional owners make involves investing in too many flight hours.

James shared the story of client calls about approaching the end of a contract, but the contract had 150 flight hours remaining in the deal. With no need for the remaining flight time, the owners were interested in assessing their options. Unfortunately, their were no options.

Those remaining flight hours were theirs to use. Per the contract, which was usually negotiated without a private aviation legal expert, unused flight hours would not be refunded.

Unfortunately, the best solution was to take a long trip.

You can always buy more hours… you can never buy less.

Look Behind the Brochures

Fractional ownership and block-charter jet card red flags can be difficult to spot. James shares the story of a celebrity-endorsed provider who cannibalized aircraft parts across their fractional fleet. Then, they went bankrupt. Program participants sent a letter listing the other nine owners of their now un-airworthy jet located somewhere in Texas.

You want an operator that has an aviation pedigree and financial backing that is incredibly strong.

Don't just shop price. Visit the company headquarters. Talk to the pilots and technicians. Learn how things are going within the operation so you ensure the provider's reputation and safety record strongly support the sales and marketing claims.

Contact James Butler & Shaircraft

Web: www.shaircraft.com

Email: info@shaircraft.com

Your Opinion?

How has a legal expert helped your fractional aviation venture succeed?  Share your feedback below, or with me directly here.

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