This month marked another full circle validation of a risky but somewhat confident bet that many charter brokers are just plain nuts. When we penned “All Seeing Sentient Being” back in November 2007 we had a feeling that major blunders were being made. Here is a loose time-line of the logical progressing to crazy:
Posted: July 18th, 2008 under Charter Brokers, DOT, FAA, Industry Trends, Part 135, Pricing Transparency, Transparency.
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While not strictly a fractional story, this IPO news and the associated fluff is worthy of scrutiny. Raising money and then promptly spending it bodes ill for all related parties, and undoubtedly fractional owners are in the same circles of those investing, chatting up and possibly struggling to see what is actually going to happen.
While the fractional ownership industry was created in 1986 with Richard Santulli’s creation of the NetJets program, no one (then) may have envisioned what lay over the horizon beyond the basic assumption - a successful point to point business jet solution where you didn’t have to buy the whole aircraft. Much in the way fractional transformed business aviation, the air taxi boom hopes to bring an entirely new class of traveler to private aviation. When all the facts are weighed, however, this is extremely unlikely.
Posted: February 27th, 2008 under Aircraft Share Depreciation, Industry Trends.
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Yes, it’s been a fun five years with your program manager, but alas the contract is up and it is time to sell that share back to the fractional jet program manager per your contract.
Jet and turboprop aircraft have value - the question is, who is measuring the value and giving you market information? Recently we were engaged on more than a few similar scenarios that required analysis of Learjets, Beechjets, Hawkers, Citations and a Gulfstream or two. Amazingly, once the program managers were pressed…. the values for these aircraft began creeping up. Sometimes more than we had expected.
Posted: December 29th, 2007 under Aircraft Share Depreciation.
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As fuel prices cavort on the roller coaster of modern times some fractional program managers struggle on how to pass this volatility to their customers. Technically, “slow flight,” as some of our pilot Forum Members know, is something best practiced in training, not when carrying paying clients. Learn about one owner’s frustration and how he dealt with it.
Posted: December 12th, 2007 under Actual Fuel Costs, Owner News, Pricing Transparency.
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Avantair is innovative in that it does a lot of things right using the Herb Kelleher metric of how to make money with airplanes. That is why the constant staggering losses are so perplexing.
Firstly, their pricing is simple - last time we checked you only paid a simple monthly fee. This concept we like a lot since it keeps things easy to follow on the “what is this really costing me?” side of the equation.
Posted: December 9th, 2007 under Fractional Profitability, Liability & Ownership, Owner News, Program Manager News.
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Buying a slug of new Phenom 300’s is a good way to attract new customers. Or at the very least allow the now “Raytheon-free” company to buy aircraft independent of any pressure from above.
Either way, Flight Options has a tough road ahead: The new owners may or may not have the “turn around chops” it requires to make money with aircraft. One thing is for certain - the landscape is littered with corpses that have tried.
Posted: December 8th, 2007 under Aircraft Share Depreciation, Aircraft Share Redemption, First Time Buyer.
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The NTSB has finally released its initial “factual” findings into the in flight incidents of engine flame outs at altitude. There may have been up to four such incidents worldwide and the aircraft manufacturer and program manager, especially Flight Options.
Posted: December 8th, 2007 under Liability & Ownership, Operational Safety.
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While we hate to admit that we are victims of better marketing, the fact is that we are.
Of course good marketing needs to be backed up with good service, otherwise the longevity of the business is in doubt. But better marketing, or rather, being better at the private air charter passenger to be converted to fractional owner persuasion game is what really shows the success of fractional as a business concept that people want. Give me something consistent in price, quality and availability, and we’ll buy it. In fact, we’ll build a whole new industry.
Posted: December 8th, 2007 under Fractional Profitability, Pricing Transparency.
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The amazing thing about chartering out your aircraft is that you begin to realize how much money you can make. You’ve got the owners paying you and you’ve got these other people paying you. What more could you want?
Posted: December 7th, 2007 under Fractional Profitability, Owner News, Pricing Transparency.
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