HERR LAW FIRM Daniel It Herr New Jersey Bar New York Bar Fractional Jet Ownership Aviation JET OPTIONS CHARTER 1. The cheapest option since charter rates do not cover the full cost of ownership. 2. Age and quality of aircraft varies, as does the quality of the operators. 3. Availability is not guaranteed. TIME CARDS 1. Credit risk due to pre-purchase. 2. Best suited for low usage or intermittent usage. 3. May be issued by charter operators — need to vet quality. a. Sentient preferred light cabin $4750/hr; mid $6700; super-mid $9525; large $12,575. 4. May be issued by fractional programs — very expensive, but higher quality with a more consistent product. 5. Flexjet LR45 $7,836/1u-; LR60 $8,674; C300 $11,777; C604 $13,550. WHOLE OWNERSHIP 1. Expense can be reasonable with high utilization. 2. Expense is exorbitant with low utilization. 3. May operate with internal flight department, or outsource to an aircraft management company. Management company may be able to increase utilization by chartering. FRACTIONAL OWNERSHIP 1. Less expensive than an under-utilized whole aircraft or a fractional card. 2. Most consistent product: age limit on aircraft, aircraft are equipped and painted the same way, pilots wear the same uniforms and undergo the same training. 3. Most convenient: guaranteed availability with minimal advance notice. OWNERSHIP STRUCTURE (whole & fractional) I. Liability exposure for charter and time cards is relatively limited, except for Marquis where customer is a lessee. 2. The desire for liability protection leads many astray — causing them to segregate the aircraft ownership and operation in a separate company, i.e. a company with no assets or operations other than the airplane. Unless that company is an air carrier with a charter certificate, segregation is a violation of FAR 91.501 — which requires that aircraft operations be incidental to the non-aviation operating business. 3. Without a charter certificate, reimbur