Newsmakers 2009: Start-up frax Jet Republic folds, leaving many questions
The sudden collapse in August of fractional ownership startup Jet Republic probably convinced anyone in Europe who still failed to accept that business aviation’s bubble had burst. For reasons best known to themselves, the company and its financial backers launched an audacious challenge to market leader NetJets–which itself was already struggling in tough trading conditions–in September 2008 just as the financial crisis was going truly global with the collapse of Lehman Brothers and other banks looking into the abyss. Going into the first and second quarters of this year, Europe’s executive charter operators experienced a debilitating dip in demand as companies and individuals reined in their spending.
Days before its sudden collapse into insolvency, Jet Republic’s high-profile CEO, Jonathan Breeze, was still issuing press releases proclaiming the recession to be exactly the right time to be getting into fractional ownership. While steadfastly refusing to disclose any sales figures, the company implied that it was doing a brisk trade selling shares in the 25 Bombardier Learjet 60XRs that it had on order (plus options for up to 85 more). All sorts of new bells and whistles were heralded for Jet Republic’s prospective clients, including the world’s most expensive coffee machine, which would mysteriously serve cups of java at rates less than Starbucks when on board their jets.
Block charter, lease and even whole-aircraft terms were made available and the company kept up the drum-beat that the first aircraft would be in service by the fall of 2009.
When the end did come, the official reason given before Breeze and his fellow directors exited the stage without further comment was that prospective customers had not been able to secure financing to buy aircraft shares. Not once had the need for financing ever been raised as a factor in Jet Republic transactions; indeed, the company had insisted that the credit crunch was a singularly advantageous environment in which to be selling fractions of aircraft, rather than whole new or used aircraft.
However, the company told employees that an investor had failed to honor a commitment to provide further investment that presumably would have paved the way for the first aircraft delivery. (See article on page 10.) It is unclear whether Jet Republic ever sold a single share before Bombardier annulled its contract on August 20.