I realize that each year it takes me longer to recover from the fourth quarter and to begin thinking about the year to come. Every December I think it cannot possibly get more complicated or busier, and yet it does. In 2025, transactions were generally more complicated as a result of (1) tariff uncertainty and complications (impacting aircraft for the first time in 50 years), (2) the uncertainty surrounding bonus depreciation, and (3) the implementation of the One Big Beautiful Bill Act of 2025.
After reflecting on my personal experience in 2025 and analyzing key data, there is a noticeable trend as we move into 2026. Specifically, fractional programs and co-ownership programs are a larger percentage of the total market than ever before. This segment’s growth is outpacing other segments in private aviation.
Those purchasing into fractional programs and co-ownership structures are not just new entrants to private aviation. Instead, an increasing percentage of the fractional and co-ownership program participants are owners who have owned whole aircraft and are selling their aircraft to transition into fractional or co-ownership. In some cases, owners are selling part of the aircraft they already own to create a co-ownership structure. Additionally, we are seeing long-standing flight departments increase their dependance on fractional ownership or, in some cases, entirely replace the in-house flight department with fractional ownership interests. I think there are several key factors influencing the decision to move towards fractional and co-ownership.
1. Availability & Flexibility Fractional ownership programs include interchange programs so that if the specific aircraft owned or leased by the fractional customer is not available, they can fly on other aircraft in the fractional ownership program. In fact, most of the time a fractional owner does not fly on the specific aircraft they own. As a result of the interchange program, the aircraft available to fractional owners can be quite numerous.
This does not mean that fractional owners do not encounter delays due to unexpected mechanical issues, weather, or crew issues, etc., but the recovery time and cost is different in the fractional model. In the event of an issue with the specific aircraft assigned to a flight, the fractional program will work on a recovery solution. With a large fleet, this often means several options. Additionally, unlike whole aircraft ownership, there is no additional cost associated with the recovery as it is included in the fractional program.
2. Fixed Costs Fractional ownership offers fixed pricing for a five-year term, with annual increases. For co-ownership programs the same can be true if the program is run by a charter operator, or at the very least, the effect of the variability of costs is less impactful when shared with one or several co-owners. Conversely, the maintenance costs vary from month to month with whole aircraft ownership. While various maintenance programs (engines, parts, avionics) are available, these programs do not always cover all maintenance and often times overpromise and underdeliver with regard to program coverage. Many of my clients have been affected by the supply chain issues with parts, particularly loaner engines, whether or not the aircraft is on a parts or engine program. It is important to note that not all maintenance programs are the same and some have an incredible repair and response rate.
3. Generational Wealth Transfer The greatest generational wealth transfer is occurring right now. The transition is going to a younger generation and most often to more than one individual. As a result, having one aircraft available for multiple users may not be satisfactory. Instead, each recipient can purchase their own co-ownership or fractional interest and have more aircraft availability on a daily basis. The younger generation is more tied to school calendars and as a result has less flexibility when they can travel and that can make sharing an aircraft difficult.
4. Product Offerings The program providers continue to grow with new co-ownership, and fractional programs being launched on a somewhat regular basis. For the more established fractional program providers, they have continued to evolve their program offerings, including larger primary service areas (where no ferry fee is charged) and luxury partnership opportunities.
5. Anonymity In the United States, we have an owner-based registry system, which results in privacy issues for aircraft owners. There are solutions to help protect owner’s privacy but once an aircraft is associated with an individual, sometimes simply by having someone see an individual board a particular aircraft, the privacy protection may have been lost. With the fractional ownership program interchange structure, owners are not flying on the same aircraft each trip, and therefore allows fractional owners more anonymity. Some fractional providers have also started filing requests through CARES to remove all fractional ownership information from the FAA website.
6. Aircraft Management Traditional turnkey, full-service management companies have disappointed a segment of whole aircraft owners. The disappointments stem from incorrect budgets, inability to control costs, less charter revenue than promised, and a lack of transparency. Unfortunately, there are management companies that produce proposals and budgets for aircraft that are significantly flawed.
Individuals who are new to private aviation, and who have not retained unbiased consultants or attorneys, sometimes assume the information received from so-called experts is correct. This leads to disappointment and the sale of the whole aircraft in exchange for a reliable alternative with fixed pricing. Additionally, whole aircraft owners who are transitioning to fractional ownership or charter have expressed that certain management companies have lost the ability to provide luxury, customized services for aircraft owners.
There are some great management companies, but when their proposals show actual numbers and another management company’s proposal show numbers that are too good to be true, the owners sometimes select the too good to be true management company and are left disappointed and dissatisfied with whole aircraft ownership as a result.
While this is not a complete list of the reasons we are seeing a shift in the market, it does capture the majority. When I started in the industry there was a rule that said anyone who flew more than 200 hours a year should consider whole aircraft ownership. While there is still a financial analysis that can predict when owning a whole aircraft would make financial sense, the analysis cannot necessarily compute all of the soft factor items, like privacy, scheduling, and luxury services, that most of my clients are considering.