Business aircraft owners often fly smaller, older or less capable aircraft than they’d like because they aren’t flying enough or can’t afford to buy their ideal aircraft.

Enter Partners in Aviation, a newly established company that matches prospective aircraft owners who live in a common geographical area with one another. The company helps them own and operate a new or late-model aircraft at about half the cost of individual ownership, the company said.

“Partnerships aren’t anything new, but a lot of them are not done well,” said Partners in Aviation cofounder Tom Bertels, who recently retired as managing partner of Sullivan Higdon & Sink, a Wichita advertising agency that works with aviation clients.

Often there are problems with partnerships, such as the way expenses are shared, documentation and scheduling, Bertels said. He and partner Mark Molloy, a Chicago-based Beechcraft sales veteran, tackles those problems up front. The two have teamed with aviation experts in legal, tax, management and maintenance to refine a structured program that mitigates the challenges in typical partnerships, Molloy said.

“Despite the considerable economic benefits of a partnership, wisely, most operators would never have considered it,” Molloy said. “Our challenge was to structure a co-ownership program that conservative operators – and their counsel – would embrace.”

The partners are at the NBAA Convention to speak with manufacturers and operators. The company doesn’t compete with planemakers or their sales departments for sales. Instead, their endeavor generates sales by matching clients who can’t afford an aircraft on their own with another partner to share the cost, Bertels explained. Partners in Aviation helps with the co-owners’ partnership.

Aircraft co-ownership fills the gap between fractional programs and sole ownership, he said. Partnerships are optimal for those who fly 100 to 200 hours a year.

“They are probably already operating an airplane, but they are smaller and older than what they’d like,” Bertels said. “Let’s say if you came to us and said, ‘I want to buy a new Sovereign or a new Phenom,’ and you’re in a certain geographical area, we would go out and find a partner for you and help you put together a partnership.”

Unlike most partnerships, which are set up as limited liability companies, each partner owns 50% of the aircraft and operates it separately.

“One of the big problems with a typical partnership is: What do you do when you want out?” Bertels said. Under the terms of the contract, the partnership will have an expiration date and a formula for the aircraft’s sale. Partners in Aviation helps market the aircraft. On the other hand, if the partnership is going well and both partners want to keep going, the contact can be extended.

Article by Molly McMillin originally published by Aviation Week on November 1, 2016.