Coleman knew he did not want to join a fractional program. He traveled on the spur of the moment, and having to book a fractional flight on a day’s notice would be inconvenient for him. He regularly visited several cities on one trip, and needed a plane waiting for him. While Coleman liked the idea of owning a jet outright, price remained a sticking point: A late model Hawker 400XP with low hours can cost more than $5 million—an expense he could not rationalize.

Grieve, a real estate developer in Sonoma, Calif., then made a proposal that would cut the cost of his jet in half. One of his industry colleagues, John Walsley, had also expressed an interest in buying the Hawker. Perhaps the two men could buy it together and split not only the purchase price, but the fixed costs as well—including the expenses associated with hangar space, crew and scheduled maintenance. "He showed me spreadsheets detailing what it costs to operate the plane," Coleman says. "It was all written out." A co-ownership agreement could make the plane very affordable, he thought. The three men met several times to talk about their flight schedules and finances, and just before last Thanksgiving, closed a deal on the same day that Grieve closed on his new Learjet.

Buying an aircraft with a near stranger is the kind of thing that makes Stewart Lapayowker, an aviation attorney in Boca Raton, Fla., shake his head in disbelief. "These relationships tend to explode," he says simply. "An aircraft is a complicated asset to begin with. There are things like tax issues, depreciation, changing market value, scheduled and unscheduled maintenance, hiring and crew training to consider." What realistic person wants to throw two separate egos into this mix, he asks. "People argue with each other about who should pay for maintenance—maybe one person’s fortunes go on the rocks, one person is harder on the landings or uses it more often." Aircraft broker Don Bell of Bell Aviation in West Columbia, S.C., agrees, and says that these partnerships can self-destruct over the smallest detail. "I’ve seen these deals fall apart because one person smokes on the airplane and the other doesn’t. How you can buy a jet together and not know that is beyond me."

Yet the allure of co-ownership continues to grow. Greg Peterson, COO of Sunset Aviation in Petaluma, Calif., routinely fields phone calls from would-be buyers looking for a partner. Peterson keeps lists of people who want to be put in touch with like-minded individuals. "Very few people fly more than 150 hours a year. Partnerships put more planes to work than any other thing we do," he says. Owners of light jets, in particular, find this option appealing. These planes offer appropriate speed and range for regional business owners, but can cost as much as $10 million. Cutting the purchase price and fixed costs in half makes jet travel possible for a larger group of owners. The challenge, Peterson says warily, is bringing the right owners together.

TOP VIEW Owning a private jet with a coinvestor can provide greater travel flexibility than fractional programs at half the cost of sole ownership. Yet, aviation experts warn that many aviation partnerships eventually sour. Disagreements over usage and shared costs can quickly make co-ownership of a jet seem like a bad marriage. To make this risky investment work, partners should make sure they have compatible travel needs and, more importantly, an ironclad agreement that plans for every possible scenario.

Rules of Attraction
An individual considering a co-ownership agreement first must find the right partner with whom he can share a multimillion-dollar asset. Tim Hopkins, an attorney at Groom & Cave in San Francisco, regularly drafts such agreements. He says investors should know exactly how they plan to use their aircraft and find someone who intends to fly it in a similar way. "I get people who both have places in Lake Tahoe, so they will have a similar need for an aircraft. That’s good," Hopkins says. If, however, one owner wants to fly to Palm Springs from San Francisco and his partner needs to fly to New York, then the match probably will not work because one needs a plane with enough range to fly cross-country; that is likely too much airplane for the other. In this instance, Coleman and his co-owner are well matched because they both have business interests in Chicago, the Carolinas, Florida and in several cities in California. "Not only do we share the plane, but sometimes we share individual flights," Coleman says. On those trips, the two men are able to evenly split the flights’ direct costs, such as fuel.

Not every potential ownership situation works out so smoothly. Recently, aircraft broker Bell sat down with four businessmen who wanted to share ownership in a King Air 200, a turbo-prop best suited for short commutes. Bell quickly realized that the men had nothing in common—and their personalities varied as widely as their flight needs. Even if the four had shared flight patterns and usage, Bell would have been reluctant to work with them, he says. Like many brokers and lawyers, he harbors a bias against co-ownership. He feels that while two people can sometimes share a jet, three people rarely can, and four owners are simply too many. Hopkins agrees. Managing four schedules, four bank loans and four egos is too much—and even having three owners is often enough to cause a clash. "If you have three people, you end up with one who flies a lot, one who flies some and another who flies very little. Then you end up with conversations at the end of the year where the guy who is not flying much has to share one-third of all the fixed costs, including costly engine repairs," Hopkins says.