Why 'Geographical Fractional' Works

Because fractional ownership, by definition, constitutes utilization of an aircraft for a limited number of hours annually, many flight department managers have simply used hours flown to determine their need to use fractional aircraft to supplement their in-house fleet. But a growing number of business aircraft operators are purchasing fractional shares to eliminate deadhead legs flown by their own aircraft. This is known as "geographical fractional."

Dow Chemical--which is headquartered in Midland, MI, but has facilities scattered throughout the world--flies seven business aircraft. Two are operated as corporate shuttles. The other five Dow airplanes-a Cessna Citation V, two Dassault Falcon 20s, and two Falcon 50s-are flown about 500 hours a year each on executive transport and marketing support missions, primarily in the Eastern United States.

Dow determined that it would be more cost-effective to use fractional aircraft to meet the company's occasional need for flights west of the Mississippi, said Norris Davidson, Dow's North American aviation manager. So Dow arranged with Executive Jet Aviation for two one-quarter shares of a NetJets Citation V. It has since used the aircraft for flights to destinations as far away as the West Coast and Mexico City.

"Our first involvement in fractional ownership stemmed from the number of flights that we were doing that involved deadheads," Davidson explained. "Twenty-five percent of our flying involved deadheads. We took the position that we will use them [fractional ownership aircraft] to do those things that we can't do efficiently."

The need to pick up an executive in Los Angeles and fly him to Colorado is a recent example of how fractional ownership has helped Dow minimize deadheads. Instead of having a company-owned Falcon 50 fly empty from its home base in Michigan to the West Coast, complete the mission and then deadhead home, Davidson simply called Executive Jet and asked for a Citation V to take the passenger to his destination.

"There's no question that there's a considerable savings to the Dow Chemical Company," declared Davidson. "From my perspective, our involvement in fractional ownership has been very successful.

"I see us being involved with it for some time to come, barring some major change in our travel patterns or in any government [tax or regulatory] treatment of fractional ownership," he concluded.

By Robert A. Searles