Deer Jet launched the first fractional aircraft program in China yesterday here at ABACE 2013. It is now selling shares in a Gulfstream G450 and a G550, the latter of which is on display this week in the show’s static display.

“As the largest aircraft charter company in Asia and the first to do aircraft management in China, it is our responsibility to create a fractional share product here,” said Hu Lei, general manager of asset management for Deer Jet. “We also believe it is the right time to offer this type of program in China.”

The 18-year-old Beijing-based firm (here at Booth P620), which has 30 business jets spanning 13 types in its charter and management fleet, said its new Deer Jet “Time Share” program is customized for the Chinese customer. It is targeted for customers who fly between 100 to 300 hours per year, a usage range where “whole aircraft ownership would be too expensive and jets cards are uneconomical,” said Hu.

There are actually two distinct products under Deer Jet Time Share: fractional aircraft shares and block charter. The main difference is that fractional-share customers have an equity stake in an aircraft, while those who choose the block-charter option do not.

Under its Chinese-centric fractional program, Deer Jet said it would sell only 10 shares per aircraft. However, customers must buy at least two shares, meaning that there will not be more than five owners per aircraft. Two shares equates to 120 flying hours per year, which Hu said is “more than enough” for the average private jet flyer in China.

Fractional-share contract terms are for five years, after which Deer Jet will buy back an owner’s shares at current market prices. Customers can exit the program early for a “small penalty,” Hu told AIN.

Besides the buy-in costs for the fractional share, customers pay a monthly management fee that covers both fixed and operating costs. Thus, customers pay no hourly occupied fees, though they are docked flight hours for positioning flights.

Deer Jet is guaranteeing aircraft availability for fractional customers–something it does not do for charter clients–and will use both its charter and managed aircraft as a backup fleet to fulfill this promise.

There are no service area boundaries under its fractional program, according to Deer Jet, so customers can fly their aircraft anywhere in the world. Due to government restrictions here in China, fractional-share customers must book flights at least three days in advance.o