A lifelong aviation enthusiast who joined&nbsp;AIN&nbsp;in 2007, Curt came to&nbsp;the publication&nbsp;from the broadcast industry where he was a national science and technology television reporter and producer. He writes on the FBO field, aviation finance, and sustainable aviation and occasionally contributes to&nbsp;AIN&nbsp;sister publication&nbsp;Business Jet Traveler. Curt was a member of the AINtv reporting staff that won the 2008 Aerospace Journalist of the Year award for Best Airshow Daily. That same year, he was a finalist for another AJOYA award. He earned an AJOYA for Best Business Aviation Submission in 2018 and was a finalist in that category in 2021. He received the National Air Transportation Association’s&nbsp; Aviation Journalist Award in 2012 and won a Pegasus Sapphire Business Aviation Award for outstanding journalism in 2021.
Before joining AIN, Curt worked with&nbsp;Consumer Reports’ television division, CRTV, and for several local television news staffs. An honors graduate of the State University of New York at Stony Brook, he earned a master’s degree in broadcast journalism from Boston University in 1995. Curt lives in New York State with his wife and two young sons.

Senior Editor

Curt Epstein

While the Covid-19 crisis has affected all sectors of aviation, some companies are recovering&nbsp;quicker than others. One that claims to have already returned to pre-crisis levels is Partners In Aviation (PIA), which was founded in 2016 to match&nbsp;people who wish to share in the purchase of a private jet.

 


“Everything kind of went silent for 60&nbsp;to&nbsp;90 days,” said Mark Molloy, PIA president and an industry veteran of nearly four decades, “but now we’re actually getting a little bit of a Covid bump in terms of inbounds&nbsp;and folks that have&nbsp;made the decision [to fly privately]. They basically say they’re not going to travel with 250 of their closest friends anymore...and they’re looking at options.”

 


Molloy explained that owner partnerships have been around for virtually as long as airplanes because the math makes sense, and the program his company has developed has built on that. “I think it's kind of a hybrid now:&nbsp;it's got the math of a partnership, but it has the autonomy and the security more of a fractional model in terms of the legal structure.”

 


The process begins when people contact&nbsp;PIA with an interest in sharing ownership. Typically, according to Molloy, they are familiar with private aviation, having come&nbsp;from jet card programs, or perhaps they even previously owned a small&nbsp;airplane and want to move up to a different class. In another scenario that's&nbsp;becoming more common since the start of the company,&nbsp;existing aircraft owners&nbsp;seek&nbsp;to take on a partner, possibly due to their own reduced flight hours. “They’re not ready to give up on what they’ve become used to, but they’re down to 75&nbsp;to&nbsp;125 hours a year, and that gets hard to justify,” Molloy told AIN.&nbsp;“[Our program]&nbsp;allows them to keep the airplane and do it in a way that to them makes some financial sense.”

 


Based on its existing contacts and research, PIA will then search for a geographic match. Molloy cited a recent example where a customer who owned a super-midsize jet signed up with the company and&nbsp;immediately had three potential matches. “That wasn’t the case in the early stages [of PIA's business],” he said. “We had to get to that critical mass and that took a while, but now we’re at the point where if somebody signs on with us, we’ll have some potential candidates waiting in the wings.”

 


Since it began, PIA has seen its arranged partnerships change. Initially,&nbsp;they involved just light jets but, said Molloy,&nbsp;“folks that are coming out of jet cards or membership programs are often more accustomed to larger-cabin aircraft. He added that&nbsp;“right now it's super-mids and mids&nbsp;where most of the activity is.” Molloy estimates that the&nbsp;three size categories currently each represent a third of PIA's business and notes that the company&nbsp;has overseen transactions on aircraft ranging from an SF50 Vision Jet to a Challenger 605;&nbsp;as of press time, it was working on its first marriage involving an ultra-long-range jet. It has also brokered partnerships in the turboprop segment&nbsp;and expects to launch an expansion into the high-end piston segment with a similar shared-ownership product called "Coupled Approach."

 


The company declined to note exactly how many matches it has arranged thus far, but Molloy offered, “We’ve matched CJ1s, -2s, -3s, -4s, M2s, Phenoms, Gulfstreams, Bombardiers, on the West Coast, the East Coast, and the heartland, so it’s going well."

 


PIA provides help in several&nbsp;areas, the first being finding a successful match between people who have never met but share an&nbsp;interest in acquiring an aircraft. “We jokingly say it starts out as 'Match.com,'" Molloy said.&nbsp;"Then, in phase two, when it looks like we have a match that lines up well, we move to 'It’s Just Lunch,'&nbsp;and we bring the parties together and let them do that second level of vetting for themselves to make sure it’s a comfortable match for them."

 


Next comes the contract, where everything is agreed to between the partners, and each contract is unique within the basic parameters. While there are instances where the two sides have agreed to swing a deal with one party having a larger share, under no circumstances will PIA allow more than two owners.

 


“A lot of folks want to get a third or fourth person, but our belief is this works really well if we keep it in between the lines of this legal structure, which is two low-time users, one airplane, professionally managed,” said Molloy. That management is a crucial part of the process and is mandated by PIA. The company has preferred partners it can recommend to manage the airplane on behalf of the owners;&nbsp;or they can choose their own, based on mutual agreement. PIA&nbsp;recommends&nbsp;enrollment of the aircraft in engine-care and parts programs. The two sides will also determine whether the aircraft will be placed on a charter certificate.

 


The initial term of the owner partnership is three years. “There are options to exit pre-term if you need to because life happens, but those options are such that you may not see the full fair market value of your interest,” Molloy said. “What we tell people is if a three-year commitment is not something you are comfortable with, it's probably not the right program for you.”

 


Then comes the actual aircraft purchase, and PIA’s customers deal in new aircraft as well as preowned. “You’re not signing up for a program, you’re buying an airplane;&nbsp;you’re just buying it with somebody else, and you’re paying 50 cents on the dollar, but all the other parts of an aircraft are part of the process,” Molloy said. “When we’re matching two non-owners up, we buy the airplane with them&nbsp;and for them, and we have a team that does that well, and that’s a big piece of our value proposition.” The company has a legal team that will interface with the legal counsel of the partners, or in some cases will be all the legal representation the two sides will require. It also has relationships with major financiers to provide funding for the purchase.

 


After three&nbsp;years, the aircraft asset may be liquidated according to the terms set forth in the agreement, which covers the method of valuation&nbsp;and even the broker to which the sale would be entrusted. Having fulfilled the terms of the deal, both sides would receive full fair market value for their share in the airplane. Upon mutual agreement, the ownership arrangement can be extended on a year-to-year basis.

 


As for the current “new reality,” in the Covid era, Molloy believes his momentum will continue. “Talking to the guys in the charter market and the jet card guys, they are seeing the same thing,” he said. “It’s new entrants coming to us that are reaching out for the first time, and I think that trend is going to continue.&nbsp;Whether you’re selling a fraction of an airplane&nbsp;or 50 hours on a&nbsp;jet card, I think you are going to benefit here for a while.”

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