Summary
- Private jet travel has significantly increased, especially during the pandemic.
- Fractional ownership allows multiple individuals or companies to share ownership of a private jet.
- Outright ownership can also offer anonymity through partnerships with trust companies.
The use of business jets has tremendously increased over the last few years. During the peak of the global pandemic, private jet travel became the simplest and most reliable method for those who can afford it. In the United States, private aviation has seen a 23% uptick since the start of the pandemic. There are more than 15,000 private jets registered in the US, which comprises more than 60% of all business jets worldwide.
Not only are private jets more accessible to a larger audience (through rentals and JetCard memberships), but private jet owners have also increased in number. However, only a small group of wealthy individuals are publicly known to have ownership of private jets. The rest of them stay anonymous. This article explores how wealthy owners of private jets remain unidentified through the use of trust companies.
Anonymity through fractional ownership
Fractional ownership is a relatively new concept where multiple individuals or companies take part in private jet ownership through an aircraft management company. The capital cost, insurance, fees, and overhead expenses are equally distributed among all parties. Each owner gets a set number of flying hours each year as part of the contract.
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All parties are equally responsible for operating expenses, such as airport, storage, and maintenance fees. Fuel and other costs generally vary based on each individual’s use. Some contracts also allow parties to switch between various aircraft in the fleet, overseen by the management company. It is relatively simple for fractional owners to retain their confidentiality and remain hidden from the public.
It is common for large and small business owners and their executives to own a private aircraft through fractional ownership. Apart from paperwork managed by the company, fractional owners generally only need to concern themselves with accessing the aircraft for travel.
Anonymity through outright ownership
It is relatively difficult to remain hidden from the public and the government while being the sole owner of a business jet. However, there are certainly ways around it. Outright owners generally partner with a trust company that will hold the aircraft title and legal documents on behalf of the owner. As such, the true owner of the aircraft is benefiting in the background, while a third-party trust appears to be the legal owner.
Photo: JonathanCollins/Shutterstock
The Federal Aviation Administration (FAA) prevents non-US citizens or entities from registering an aircraft in the US. However, with esteemed partnerships with US trusts, any aircraft operating in the country can be legally registered because the apparent owner (third-party trust company) is a US entity. Actual owners, irrespective of their status in the country, can act anonymously in the background and hide their ownership. The 2023 High Flyers Report highlights the findings of private aircraft registration shown by The Boston Globe by stating,
Approximately one in six private aircraft registered with the FAA is registered through a trust, a Delaware corporation, or a P.O. box, tactics frequently used to conceal the identity of an aircraft’s owner.
Partnerships with such companies allow outright owners to benefit from tax and other provisions that apply to large third-party trusts.
What are your thoughts on the anonymity techniques of private jet owners to hide from the public? Tell us in the comments section.
Source: 2023 High Flyers Report