Swiss company acquires Skyjet
VistaJet has embarked on an ambitious growth plan that could see it operating a fleet of almost 100 business jets by 2012. The Zurich, Switzerland-based group has completed the acquisition of Bombardier’s Skyjet International block charter program, which it is running in tandem with its new Flight Solutions leaseback program for aircraft owners.
VistaJet president and CEO Bing Chen says his company is firmly committed to honoring Skyjet’s existing obligations to cardholders and will continue to allocate charter bookings to other operators in the Skyjet program. Previously, Bombardier has run Skyjet with strict neutrality, allocating charter flights to the operator best placed to provide the service at any given time. Now VistaJet is essentially running a charter program that depends on the services of rival operators.
“In current market conditions we have no concern about VistaJet being our competitor,” Marcel Wepfer, ExecuJet Aviation director of aircraft management, told AIN. However, he added that if demand for charter flights softens then ExecuJet assumes it and other Skyjet operators will get less work from the block charter program on the basis that VistaJet will opt to keep its own fleet busy.
The VistaJet fleet already consists of 34 aircraft, including three Airbus Corporate Jetliners, and at May’s EBACE show in Geneva it signed a $1.2 billion deal with Bombardier for up to 60 new jets. This includes firm orders for 35 aircraft–11 Challenger 605s (plus options on 10 more), 13 Learjet 60XRs (plus seven options) and 11 Learjet 85s (plus eight options).
Chen told AIN that VistaJet is being run to a business model that more resembles that of an airline than a traditional executive charter operator in terms of aircraft utilization. The company is currently logging as many as 1,200 flight hours per year with its aircraft, which, on average, are less than two years old.
“With the new aircraft we are adding, we will improve service standards and guarantees for Skyjet customers,” said Chen. He insisted that there will be no discrimination against rival operators in the way Skyjet bookings are allocated by the program’s operations team, located at the London-area Farnborough Airport.
VistaJet is projecting a 50-percent increase in its revenues this year and expects its fleet to be logging around 80,000 flight hours annually by 2012. The company has just placed a Challenger 605 and 604 at Kuala Lumpur’s Sultan Abdul Aziz Shah Airport, where it is establishing an operating base for the fast-growing Asian market.
With demand for charter continuing to exceed supply, VistaJet is looking to make more aircraft available through the new Flight Solutions partnership program. This entails customers buying aircraft and then allowing them to be offered for charter by VistaJet, which pays the owner a monthly leaseback fee.
Under the Flight Solutions terms, the aircraft owner can commit to flying 100, 200, 300 or 400 hours annually and is guaranteed access to an aircraft from the fleet based on fixed monthly operating fees. VistaJet covers all maintenance and management costs and Chen claimed this approach costs customers as much as 20 percent less than comparable aircraft management programs.
Asked whether continuing problems in world financial markets and the prospect of a downturn in key western economies might prune demand for executive charter, Chen expressed confidence that VistaJet’s business model of focusing on the top end of the sector will prove sound–at least partly due to the economies of scale resulting from a large fleet with high utilization rates. “The charter market is fragmented and the lower end is sensitive [to economic downturn],” he stated. “Low-cost, small operators will suffer because they are more price sensitive,” he said.
“VistaJet is different in that it isn’t a traditional operator,” concluded Chen. “We are an innovative business aviation company; all our aircraft are fully dedicated to charter, rather than on management contracts. We are running a business-aviation operation like an airline.”