Terms and Benefits
Whether you elect Free Ownership or traditional management, your PMM will capture your choices regarding owner guaranteed days, peak days, advance booking notices, daily minimums etc. The default PMM baseline is in line with the framework customary in the industry, however you have the flexibility to adjust each variable according to your expect utilization, as well as to revise them periodically.
Third Party Fees and Incidentals
As is it customary in the industry, Flight-Hour Rates - whether as Comped Owner Hours entitlement or Overflight - exclude third-party and non-flight incidentals, such as ground handling; landing, parking and navigation fees; permitting, catering etc.
Overfly Hourly Rate
Under Free Ownership, an Overfly Hourly Rate applies once the Comped Owner Hours entitlement has been used. This rate, specified in the PMM, is anchored in the charter market, typical examples being $4,000/hr for Hawker, $5,000-5,500/hr for Challenger 604/5 and $8,500/hr for G550.
Underflying and Hours Exchange
Your PMM will captures your preference regarding how the Comped Owner Hours and Guaranteed Days entitlments are split over time, with the default option being on a quarterly basis; annual and monthly options are available.
Strato Club Membership
Free Ownership includes a complimentary Strato Club membership (i.e. initiation and renewal fees waived) for the duration the aircraft is nested in æry; for a 5 year term, that is a $33,600 cash value. Based on the value of your acquisition/transfer, you will qualify for one of the Admiral tiers, enjoying highest level of booking privileges for Club-Flying as well: most guaranteed days, shortest advance notice, fewest peak days, lowest minimums etc.
- to a given route (e.g. Dubai – Bangalore), for a given frequency (e.g. twice a month)
2. ClubSource: propose a flight and occupancy:
- “need 2 seats, will pay for up to 4”, tentative until that minimum is met
3. ClubShare: a lead-pax (LP) commits to a flight:
- actual cost pro-rated by eventual occupancy of the available seats by other members
4. JumpSeat: fly for free on an empty seat, provided member opened empty seats on other paid flights
We currently support:
Aircraft based in India, the Gulf States and Singapore are eligible for full æry terms.
"No Charter" Option
Aircraft acquisitions are quintessential international transactions. You have to be able to timely fund, and subsequently disburse, an escrow in a major currency wth a leading title company. Simply due to the fact that the US market provides the deepest pool of suitable airframes and the most streamlined and cost-effective process, a majority of transactions are concluded with US sellers and in USD.
A virtually unlimited array of entities, jurisdictions and structures that can own, and as the case may be, operate or lease-back your aircraft, is avaialbe to you. In practice, a simple holding LLC will fit most clients, but we impose no restrictions as such on any setup your particular circumstances might require, regardless of its complexity (as long as it is legal and legitimate).
Above and beyond any regulatory requirements, we have to get comfortable Knowing You as our Customer. As thorough due dilligence is what we do at the core of the acquisition process, we apply the same principle throughout our business.
Executing the PMM and timely Funding are really the only participation we require from you. If provided with appropriate Powers of Attorney, you can sit back and simply approve the particular aircraft serial for which we make the Final Recommendation. In practice, most clients selectively get involved at critical junctures in the transaction.
Our pledge of "Fly Away in 30 days", unexcelled in the industry, applies to choosing an aircraft from our pre-approved pool of serials and US/FAA Registration. For San Marino registration, pre-approved serials can be delivered in 45 days.
Fees and Costs
If your transaction is eligible for all-inclusive pricing, a typical fee is 5% of "as-delivered" value.
Purchase and Management Mandate
The Purchase and Management Mandate (PMM) formalizes the choices you made in your aircraft and management framework selection. Unlike a traditional "mandate", which is effectively just an aircraft search order, to be followed by a whole string of other legal instruments in order to complete a transaction, the æry mandate is a conditional Aircraft Purchase and Management Agreement covering the transaction end-to-end.
To learn more about the Acquisition Process, please see the "Buy" page.
Besides getting a better price (both from the seller and an "as-delivered" final total), timely disbursement of funds is conducive to productive interactions among stakeholders in an aircraft transaction; delays are show-stoppers and understandbly create frictions, as aircraft have high daily carring costs - thousdands of dollars a day.
For US/FAA registration, a commonly-used Owner Trust setup is required for non-US citizen owners. This is a trivial legal arrangement used by thousands of owners and it does not affect or restrict your ownership in any way. Your Pre-Closing Adviser will review the documents with you and answer any questions. The Trust Agreement itself is a canned document, pre-approved by the FAA Counsel to meet all legal requirements.
We encourage you to experience the aircraft type you had set your sights on, If you commit to a puchase at the end of the demo flight, we will comp the cost of the first hour of your demo flight.
Expression of Interest and Refundable Deposit
To finalize the specific details of the acquisition and start presenting you specific airframe options, we require an Expression of Interest and a refundable deposit of $4,999.
Depreciation and Tax
While your tax benefit will vary with choice of holding entity, jurisdiction and individual circumstances, you should expect to generate to depreciate 100% of the "as delivered" acquisition price. If opting for æry terms, some fraction of your tax benefit will be offset by income as Comped Hours.
Under traditional aircraft management, your termination arrangements can vary.
Sell Back Option
Under the æry framework, at the end of the Term (specified in the PMM), you have the option to sell back the aircraft to us, at Fair Market Value minus a Re-Marketing Fee, customarily 6%.
This section should not be construed as a comprehensive Terms and Conditions document. It is provided for informational purposes only, with additional granularity in the FAQ section. Always read the disclaimers on the Legal page.
Your aircraft has to be airworthy, i.e. with all inspections up-to-date and in compliance with any applicable Airworthiness Directives (ADs) and Service Bulletins (SBs). You also need to obtain an Export Certificate of Airworthiness under the existing registration. In most cases, we can assist you, on a transactional basis, in meeting these pre-requisites.
Once you have an Export Certificate of Airtworthiness, we are committed to get you flying again under traditional management in less than 30 days.
Fees & Costs
Free Ownership transfers are eligible for one all-inclusive fee, e.g. 3% of aircraft value (including any Maintenance Liabilities).
Acceptance into Free Ownership
As we assume the ongoing costs of maintaining your aircraft, a Technical Acceptance is required. This is similar to the acceptance in an Engine or Airframe Hourly Program, sharing some elements with a Pre-Purchase (or Pre-Sale) Inspection.
Traditional Management Transfer
If you choose to forgo the benefits of Free Ownership, your aircraft is transfered essentially "as is" from your current manager/operator to us, with a registry change to US/FAA or San Marino at your discretion.
Resetting Maintenance Liabilities
To learn more about the process, please see the "Transfer" page.
Depreciation and Tax
You will continue to enjoy all the benefits of depreciating your aircraft, with the specific tax benefit will vary with choice of holding entity, jurisdiction and individual circumstances. If opting for æry terms, some fraction of your tax benefit will be offset by income as Comped Hours.
Maintaining your aircraft
Under Free Ownership, our obligations in maintaining your aircraft are identical to traditional managment, including crew, insurance and Engine / Airframe Hourly Programs (if not already enrolled).
As a general rule, you should expect to receive a 10% return on the "as delivered" aircraft value, adjusted for the residual at the end of the Term (e.g. in 5 years). While this is structurally a simple proposition, specific numbers will vary with the choices you made regarding a particular serial's vintage, airframe time, interior and exterior appearance, installed equipment etc.
To address only the two most common variables, the most substantive adjustments to your aircraft "book value" are: (1) age/hours and (2) value of any "ordinary and necessary" upgrades or refurbishments. A 3 year old aircraft has a very high residual value hence your return basis will be lower than the purchase price paid. Similarly, if you undertake post-Buy work on your aircraft, corresponding change in the return basis may be higher or lower than the cost of the upgrades, reflecting different market valuations of aircraft upgrades.
In no way this should be construed as discouraging you from buying a newer aircraft or updating one; owner value and return basis are completely unrelated. Moreover, you generate depreciation benefits from the entire "book value" of the aircraft, regardless of any adjustments to the "return basis" (which is entirely an internal, private contract construct).
The end result is that most owners will have a return basis in the ballpark of the "average used price" for the type. See examples on the Aircraft Overview page.
Airworthiness Directives (ADs) and Mandatory Service Bulletins (SBs)
Compliance with ADs and certain Mandatory SBs, occasionally issued by CAAs and/or OEMs, is required in order to maintain the airworthiness of your aircraft. These are "safety of flight" items and by definition their occurence - albeit rare - can not be predicted or budgeted. If you are unfamiliar with aircraft ownership, you could think of ADs/SBs as a manufacturer's recall.
Comped Owner Hours
Your annual entitlement of Comped Owner Hours is calculated by dividing the 10% return on the aircraft value by the Hourly Rate, which is the same as the rate for Overfly (i.e. flight hours beyond your Comped Owner Hours) and anchored in the charter market.
To qualify for full æry benefits, the Term you elect in the PMM should be 5 years or 5,000 hours, whichever comes first.
Your depreciation tax benefits will vary with choice of holding entity, jurisdiction and individual circumstances. Some fraction of it will be offset by income received as Comped Hours. Note that you depreciate the entire "book value" of your aircraft, regardless of any adjustments of the "return basis" (on which you earn offseting income)
Your 10% Return under Free Ownership is based on a total aircraft utilization not to exceed 800 hr/yr. Your PMM will include an Upside Participation Clause, in case the utilization exceeds this threshold, providing you with additional Comped Owner Hours entitlement. A typical example would be one additional Comped Hour for every 10 hours the aircraft flies above 800 hr/yr.
Frequently Asked Questions
[I'm really picky - can I pre-buy 3 airframes?]
[after rejecting an aircraft that passed the pre-buy, transaction converts to "+ expenses"; we also budget reasonable timeline + contingencies, past that we require a weekly retainer]
Do I have to disclose my ownership to local authorities?
I want a Falcon / Legacy / Global etc.
[Happy to buy it and manage it for you; under customary industry-standard terms (sorry no fixed % fee; no free ownership]
[I live in Timbuktu, can i nest with aery?]
[Sorry not at this time; however we are present on 3 continents with traditional aircraft management services etc.]
[Can I buy a brand new aircraft ?]
[Exstatic to buy a new CL-650 or G550 for you, we maintain excellent relations with both OEMs; 90% discount on the acquisition fee; however be mindful that if opting for Free Ownership, the return in Comped Owner Hours will not be based on the $25m / $65m value, but rather be residual-adjusted]
[Can I buy a really really old aircraft?]
[Unfortunately not under the terms of aery; depending on what you have in mind, we can assist you transactionallly; even for traditional aircraft management, we sometimes turn down business if we believe is not in the client's long-term interest]
[Do you support smaller / shorter range airplanes?]
[We do support Citation CJs, including the midsize-in-disguise CJ4; talk to us about where you plan to base, what are your missions, revenue model if any etc. Despite their merits and value, found little regional demand]
[I heard about something called cabotage, can I fly in India?]
At will; cabotage does not apply to the aircraft owner, who can always fly anywhere; certain time in country limitations, e.g. 15 days at a time, but are not operative in any reasonable usage]
[Can I put my employees / my cousins on the plane?]
Who pays for ADs and Mandatory SBs ?
[they are only exclusion under Free Ownership; can settle in cash or by deducting Comped Owner Hours; option to create a funds reserve - amount is yours if unspent just like the Periodical Aircraft Update we fund for you]
How do I transfer the funds, I am an Indian resident subject to RBI capital controls?
[free money outside India easiest; referral to outside compliance advisors; options to structure operating and financing entities]
[Can I buy only an interest / fraction of aircraft ?]
[Yes, but not through aery. Inquire about TailCoin, email@example.com ]
[Do I have to bring inspections up to date?]
[Can I take my plane to Australia fo 3 months?]
Carrying Comped Hours year-to-year
[yes; carrying guaranteed days with some penalty]
[Can I sell my airplane]
[yes is your airplane; see pro-rated exit fees if under aery and terminated before term]
[Who is paying for redoing upholstery? How often?]