TeeBee Shares Co-Ownership Program
The costs of owning and maintaining a whole aircraft are not practical for many individuals and businesses. Co-owning aircraft allows expenses to be shared among other owners while right-sizing the benefits of private aircraft travel. Ownership of a single share provides up to 40 aircraft schedule days per year. During this time, the aircraft is completely at its owner's disposal allowing flexible departure times and and expeditious travel. TeeBee Shares exclusive day-based program allows owners to fly as many as 8 hours per day, paying only for the actual direct operating costs as compared to other fractional jet plans that include a set number of hours and a very high occupied hourly rate.
Difference between Full ownership and Co-ownership
Under a full ownership structure, an individual or entity owns 100-percent of an aircraft. Full ownership allows for the greatest level of flexibility and control over all factors relating to transportation. The aircraft owner is responsible for the level of safety, security, comfort, and cost of business travel. Aircraft operations can be managed by an in-house flight department or outsourced to an aircraft management company.
To be cost effective, full ownership generally requires a minimum level of utilization. In general, if the company plans to utilize the aircraft for at least 250 flight hours per year, full ownership is a good option. Although for some companies, the benefits of business aviation are such that they purchase and operate a whole aircraft even at less than 250 hours of utilization per year.
TeeBee Aviation offers all of the benefits of Full-ownership through "The-360" purchase option. However buyer's of an aircraft in The 360 program also enjoy the benefits of co-ownership by having full access to back-up aircraft and crew members when their aircraft is down for maintenance or their pilots are in training or on vacation.
Through a Co-ownership structure, multiple companies are able to share in ownership of an aircraft. When operating the aircraft, each co-owner is responsible for providing flight crew and paying their direct operating expenses. The crew can be provided by the co-owner independently or through a management company.
It is important to note that aircraft co-owners are not able to charge each other for operating the aircraft. This structure should be distinguished from a joint ownership agreement which allows registered joint owners to charge each other for certain operating costs.
Joint Ownership is defined in 14 CFR §91.501(c)(1) of the Federal Aviation Regulations (FARs) as an "arrangement whereby one of the registered joint owners of an airplane employs and furnishes the flight crew for that airplane and each of the registered joint owners pays a share of the charge specified in the agreement."
Under this agreement, one registered owner may provide the flight crew and the other registered joint owners may pay a share of the fixed ownership costs as specified in the agreement. Each joint owner is responsible for individually covering their own direct operating costs. All joint owners must be named on the registration certificate of the aircraft.
Only U.S. registered aircraft that are eligible to operate under FAR Part 91 Subpart F may utilize a joint-ownership agreement. To be eligible, the aircraft must fall into one of the following groups:
The aircraft has a maximum takeoff weight of over 12,500 pounds, or;
The aircraft is a multiengine turbojet aircraft (regardless of size), or;
The aircraft is a fractional program aircraft (regardless of size).
Aircraft, including piston airplanes, small airplanes, and all helicopters operated under the NBAA Small Aircraft Exemption can also make use of the cost reimbursement options allowed under Part 91, Subpart F, such as a interchange agreement.
TeeBee Shares Co-Ownership program is generally structured as Joint Ownership. TeeBee Aviation remains a 1/16 share owner in each program aircraft and continues to be a risk-sharing partner with all other share owners. As such, TeeBee Aviation provides aircraft management, trip and crew scheduling on behalf of the other co-owners.
Co-owners can own aircraft shares in increments of 40 days of use per year. Every 40-day share is the equivalent of 1/8 ownership of one aircraft however will generally be structured as 1/16 ownership of 2 aircraft. An 80-day share will generally be structured as 1/16 ownership in 4 aircraft. This allow the co-owner unrestricted use of any of the aircraft they hold title to without the use of interchange agreements. It also helps normalize maintenance cost for all co-owners.
An Interchange Agreement is defined in 14 CFR 91.501 (c)(2) of the Federal Aviation Regulations (FARs) as an "arrangement whereby a person leases his airplane to another person in exchange for equal time, when needed, on the other person's airplane, and no charge, assessment, or fee is made, except that a charge may be made not to exceed the difference between the cost of owning, operating, and maintaining the two airplanes."
TeeBee Shares uses Interchange Agreements to exchange time between other Shares program aircraft to greatly improve availability amoung TeeBee Shares program owners. The exchange of time between TeeBee Shares program aircraft is hour-for-hour and is tracked and accounted for by the Manager.
Time Sharing is defined in 14 CFR §91.501(c)(1) of the Federal Aviation Regulations (FARs) as an "arrangement whereby a person leases his airplane with flight crew to another person, and no charge is made for the flights conducted under that arrangement other than those specified in paragraph (d) of this section."
Through the use of a time-sharing agreement, an aircraft operator is able to seek limited reimbursement for a flight. Under this agreement, a company is permitted to lease its aircraft, with flight crew, to another individual or company. In return, the aircraft operator is permitted to receive reimbursement for a specific list of out-of-pocket expenses associated with the flight, including an amount equal to twice the cost of fuel used on the flight. The following charges are allowed under FAR 91.501(d):
Charges for fuel, oil, lubricants, and other additives.
Charges for travel expenses of the crew, including food, lodging and ground transportation.
Hangar and tie-down costs away from the aircraft's base of operation.
Charges for insurance obtained for a specific flight.
Charges for landing fees, airport taxes, and similar assessments.
Charges for Customs, foreign permits, and similar fees directly related to a flight.
Charges for in-flight food and beverages.
Charges for passenger ground transportation.
Charges for flight planning and weather contract services.
An additional charge equal to 100 percent of the expenses listed in paragraph (d)(1) of this section.
Only U.S. registered aircraft that are eligible to operate under FAR Part 91 Subpart F may utilize a timeshare agreement.
TeeBee Shares uses Time Sharing Agreements to conduct demonstration and marketing flights and may allow owners of other TeeBee Shares managed aircraft to time share program aircraft when an Interchange is not used.
Flights conducted under a timeshare agreement may be subject to a Federal Excise Tax (FET). For information about this tax, Members should access NBAA’s web resource on IRS Commercial Transportation Taxes for Part 91 Flights.