DiamondShare: Blunting the Cost of Sole Ownership
With new aircraft prices closer to the million dollar mark than not, many would-be owners pass on purchases not because they can't afford it, but because they can't justify the large investment for minimal yearly usage. At least that's the theory behind DiamondShare, an innovative marketing plan developed by Diamond dealer John Armstrong. He told us in a podcast interview last week at Sun 'n Fun that these days, serious owners tend to fly about 100 hours a year, a tiny percentage of the total hours the aircraft is available during the year. "The biggest hurdle for a lot of folks is they don't feel comfortable being able to justify the investment for the 100 hours. If you do the calculation, 100 hours is 1.1 percent of all hours and 2.2 percent of daylight hours. Well, 2.2 percent utilization for a sizeable investment doesn't make sense in certain cases," Armstrong said in an interview at Sun 'n Fun last week.
DiamondShare is a different take on the partnership idea, but Armstrong doesn't like to use the word partner. "We never use the word partnership, because it's not an equity partnership," he explains. So what is this thing exactly? Essentially, it's a sole owner arrangement with up to three "members" who pay a certain amount for access to the airplane. They pay a fixed fee for a capped number of hours. The program provides support, including specialized insurance and a scheduling web site. The owner sets all the policies for aircraft usage, but DiamondShare provides a turnkey program to stitch it all together. For the owner, that includes all expenses paid the first year except gas and taxes and setting up an LLC to manage the airplane. DiamondShare administrates the program through an agency relationship with individual Diamond dealers. According to Armstrong, other types of aircraft can be put into the DiamondShare program.