Did they build a better mousetrap?
If you’ve been around airplanes for a while, you’ve probably heard someone extol the virtues of an aircraft partnership that lets you step up to a nicer airplane for much less money than you could afford on your own. Those agreements always sound good—at least in theory. It’s only later when partners become immersed in scheduling and unexpected cost problems that things head south. “You really nailed it,” Mark Molloy responded to that observation. “Partnerships have always been a really good idea except for, well, everything. For most of my career, I’ve tried talking people out of them because they really are a bad idea. If the word partnership doesn’t raise the hair on the back your neck, you’re not thinking straight. It should. It really should. But it also kept gnawing at me that there had to be a right way to [bring two owners together].”
Molloy is the co-founder and president of Partners in Aviation (PIA), a Chicago-area consulting company that says it’s figured out a new way for two people to share a turbine airplane. PIA markets its program as: “All of the aircraft at half the cost.” Founded in 2016, PIA began putting agreements and people and aircraft in the air by 2018. Molloy says customers find their way to PIA’s door through personal referrals, often as they begin leaving the jet card and charter ranks.
Molloy, spent 34 years working for Beechcraft and Cessna and co-founded PIA with aviation marketing veteran Tom Bertels. PIA’s sweet spot is owners who operate as little as 50 and upwards of 150 hours each per year and reside within half an hour of each other. PIA likes working with light jets, but has also recently begun working with owners of single-engine turboprops like the Pilatus PC-12.
“We now have a structure that is legally and structurally not a partnership,” Molloy said. “It says so in big bold letters in our agreements. We tell clients how they’ll own the airplane, how they’ll share it, how they can exit the agreement [created from the fractional ownership models], and how they’re both legally and financially protected.” Agreements are limited to just two owners with each purchasing half the aircraft from a legal and tax standpoint. The two owners use an outside aircraft manager to handle the day-to-day operational details.
PIA begins by creating a specific customer profile before trying to find the right match through an already vetted a pool of potential co-owners. They only match a client with a qualified co-owner who shares similar operational requirements. Until everyone likes what they hear, names are kept confidential.
Molloy used a couple of colorful well-known brand references to explain some of the agreement’s intricacies. “We start out like Match.com. Once we have what appears to be a good match we convert to ‘It’s Just Lunch’ and we bring these possible owners together. It’s truly like just lunch.” PIA handles the initial vetting but says, “There’s no commitment. They go eyeball to eyeball, and we talk through everything.” If the co-owners agree to move ahead, they handle the next stage of vetting. If a deal comes together, PIA is compensated with a single, one-time fee similar to an aircraft broker, though Molloy says, “We’re not in the brokerage business. We don’t sell airplanes.” We’re actually more like a marriage broker.” PIA is never a party to the legal co-ownership agreement.
For many owners, partnership problems often arise around scheduling. Molloy says they’ve solved that one by giving each of the two owners full control of the airplane for a week at a time. He says that offers each, “quite a bit of flexibility even if they want the airplane when it’s the other person’s week.” He said “Originally we were going to focus only on Part 91 operations.” He now thinks some Part 135 flight operations are possible so long as both owners agree. “We let the customers decide.”
As far as what airport becomes home to the airplane, Molloy says, “Nobody really cares where the airplane sleeps. What they care about is driving to their airport that’s 15 minutes away, walking through their FBO and climbing aboard their airplane with their pilot.” He admits though that, “a lot of deadheads can really drive program costs up.” These agreements limit positioning flights to short 20- to 30-minute hops. “That really doesn’t move the needle much, but they do need to be accounted for so that everything remains co-equal.” All costs are simply split 50/50.
Despite a number of successful co-ownership agreements under their belts at this point, Molloy said he still remembers anxiety at the beginning. “Two years of sleepless nights where I’d wake up thinking this was a brilliant idea. Then the next night, I’d get up thinking this is the dumbest thing I’ve ever thought of.” He and Bertels decided to settle on brilliant.