The Rise of Fractional Ownership: NetJets, Flexjet, and Why the Model Is Winning

In 1986 Richard Santulli, a former Goldman Sachs mathematician, worked out that a business jet could be sold in pieces to owners whose travel patterns did not overlap, and that a large enough pool of aircraft could guarantee each of them a jet on short notice. Forty years later the company he founded, NetJets, operates more than 800 aircraft, its closest competitor Flexjet more than 300, and fractional flying has grown roughly 65 percent since 2019 according to Honeywell. The fractional operators have become the largest customers of every business jet manufacturer and the most important force in the market. This piece explains how the model works, why it is taking share, and where its limits are.

How the model works

A fractional customer buys an undivided share of a specific aircraft, typically between one-sixteenth (50 hours a year) and one-half (400 hours), under a contract of usually five years. Three payments follow:

• The share price, a proportion of the aircraft's value, paid at purchase and financed if desired.
• A monthly management fee covering crew, maintenance, hangar, insurance and the operator's overhead, whether or not the customer flies.
• An occupied hourly fee for each hour flown, covering fuel and variable costs, sometimes with a fuel surcharge that floats with the market.

In return the operator guarantees an aircraft of the contracted type or larger with as little as ten hours' notice for most of the year, with longer notice on a published list of peak days. The customer rarely flies the aircraft they own; the operator dispatches whichever aircraft in the fleet is best positioned, and interchange rules allow upgrades or downgrades with adjusted hour deductions. At the end of the term the operator repurchases the share at fair market value less a remarketing fee, so the customer bears depreciation risk on their share but not resale risk.

Why the model is winning

It removes the four hardest parts of ownership. Crew hiring and retention, maintenance management, aircraft positioning and resale are all done by the operator. For a customer flying 50 to 300 hours a year, this is the difference between owning an aircraft and owning a problem.

It offers fleet flexibility no single aircraft can. A share in a Citation Latitude comes with access to a Phenom for the short hop and a Challenger or Global for the transatlantic trip. Owners of whole aircraft charter to fill these gaps; fractional customers simply book.

It buys in bulk. NetJets' 2023 agreement with Textron Aviation for up to 1,500 Citation aircraft over fifteen years, its 2024 Bombardier deal for up to 232 Challenger 3500s, and Flexjet's February 2025 firm order for 182 Embraer aircraft with 30 options, worth up to 7 billion dollars, are the largest orders in the history of business aviation. The operators buy at prices no individual can approach, and they fly standardised fleets that are cheaper to maintain and crew.

It has invested in the customer experience. Flexjet's Red Label programme with dedicated crews per aircraft and bespoke interiors, NetJets' private terminals at Palm Beach and Teterboro, and both companies' investment in cabin connectivity have narrowed the gap with whole ownership. Flexjet also allows customers to resell a limited portion of unused hours, and both operators now sell leases as well as shares for customers who prefer not to hold an asset.

Tax and finance have helped. In the United States, restored 100 percent bonus depreciation applies to fractional shares used for business, which puts the fractional share on a similar footing to whole ownership for corporate buyers.

It scales with wealth creation. The number of individuals with the net worth to justify 50 to 100 hours of private flying has grown far faster than the number who want to run a flight department. Fractional is the product for them.

The competitive landscape

NetJets, owned by Berkshire Hathaway, remains the largest by a wide margin, with a fleet of Citation Latitudes and Longitudes, Phenom 300s, Challenger 350s and 3500s, Global 5500s, 6000s and 7500s, and a growing European operation. Flexjet, backed since 2025 by a consortium led by L Catterton, has built a differentiated brand around its Embraer fleet, Gulfstream G650s and G700s at the top end, and helicopter and private terminal services. Its Embraer order will take the fleet toward 600 aircraft by 2031. Airshare, PlaneSense (in the PC-12 and PC-24 niche) and a handful of regional players fill out the US market; in Europe, fractional remains smaller but is growing through NetJets Europe and Flexjet's UK operation, and the model is being tested in the Middle East and Asia.

The limits

Fractional is not the answer for everyone, and its weaknesses are the mirror image of its strengths.

• Cost at high utilisation. Above 250 to 300 hours a year, whole ownership with professional management is usually cheaper, and the gap widens with utilisation.
• Peak-day rules. The published list of peak days, on which notice periods lengthen and surcharges apply, coincides with exactly the days many customers want to fly.
• Geographic reach. The large fleets are North American and European. A customer based in Dubai, Singapore or Hong Kong who flies intercontinentally is poorly served, and the regional programmes remain small.
• Consistency. The customer flies whatever aircraft and crew arrive. Flexjet's Red Label programme addresses this at a price; most fractional flying is anonymous by design.
• Exit terms. Remarketing fees on buyback, typically 5 to 7 percent, and the operator's valuation methodology are worth reading carefully. In a falling market the fair market value repurchase can disappoint.
• Concentration risk. Because the operators are now the manufacturers' largest customers, a slowdown at one of them would ripple across the entire industry's order book, and their scale has raised questions about pilot working conditions and dispatch reliability during the 2022 surge, which both leaders spent 2023 and 2024 repairing.

Where it goes from here

The fractional operators are moving up the cabin scale, into ultra-long-range aircraft, and outward geographically, into Europe and the Gulf. They are experimenting with day-based contracts, shorter terms, leases and resale of hours, and with products that bundle helicopter and eVTOL transfers. Their purchasing power is reshaping manufacturers' production plans: Embraer's 2026 output, Textron's Latitude and Longitude lines and Bombardier's Challenger 3500 line are all built around fractional demand. For the customer with 50 to 250 hours a year of mostly regional flying and a preference for not managing anything, the model has won. For the owner who flies 400 hours a year across three continents, or who values a crew who knows them by name, it has not, and probably never will.