Joint Ownership vs. Co-Ownership

The decision to share a private aircraft is a complex one, and it requires considerable time and hard work to reflect carefully upon the various factors. Once the aircraft owners have made this decision, the next step is to determine the type of ownership structure that will be most suitable for potential buyers. Although it’s never been easier to make use of private planes through jet cards, private charter, and fractional ownership, the two main forms of sharing a private aircraft are co-ownership and joint ownership, each with its own set of advantages and considerations.

Co-ownership entails multiple companies or individuals coming together to share ownership of the private aircraft according to their travel needs. In this arrangement, each co-owner has the opportunity for immediate access of the private aircraft for their own use and for providing their own crew, service providers, and concierge team. It is important to note that aircraft owners cannot charge one another for the operation of the private aircraft. This distinction is good news for many high-net-worth individuals, as it highlights the independent nature of each co-owner and their responsibility for managing their respective crew and business aircraft operators.

On the other hand, joint ownership, as defined in the Federal Aviation Regulations (FAR), takes a slightly different approach. According to 14 CFR 91.501(c)(1), one of the joint aircraft owners employs and provides both the crew and the aircraft management company for the private aircraft, while the other joint owners contribute financially on a regular basis according to the terms outlined in the joint ownership agreement. In this scenario, all joint aircraft owners must be listed on the registration certificate of the private aircraft.

It is worth noting that joint ownership rules are applicable only to private planes operating under FAR Part 91, Subpart F. However, smaller private planes, newer types of light jet, and helicopters that fall within the NBAA small aircraft exemption can also leverage the cost reimbursement options under Part 91, Subpart F.

The choice between co-ownership and joint ownership ultimately depends on the unique requirements and circumstances of every private person involved. Co-ownership offers more autonomy and flexibility for each co-owner, allowing them to handle their operations independently. On the other hand, joint ownership provides a more structured approach where one aircraft owner takes responsibility for the crew and the aircraft management company, with the other aircraft owners contributing financially on a regular basis. Both choices have their merits, and it is crucial to carefully consider the unique requirements of the situation as well as your business purpose before making a decision on the best option for your travel needs.

The decision to share a private aircraft is a significant undertaking that requires careful thought and consideration. The choice between co-ownership and joint ownership has far-reaching implications and must be made based on a thorough understanding of the advantages and considerations of each approach. 

By taking the time to assess the specific needs and circumstances of the situation, every private person involved can make an informed decision that best aligns with their objectives and ensures a successful and harmonious shared ownership experience with the right people.