Although it is approaching its 20th birthday, the fractional aircraft industry is still very much mired in adolescence. It’s come a long way since NetJets chairman Richard Santulli invented the concept of fractional ownership and launched his program in 1986, but the industry still has a long uphill road ahead.
According to the International Brotherhood of Teamsters Local 1108, the union representing NetJets pilots, 93 percent of voting members have authorized a strike, should the National Mediation Board (NMB) release the group for self help. At present, the NMB has put contract negotiations between the NetJets’ pilots and management on hold, though the two groups are engaged in non-mediated bargaining sessions.
NetJets Europe expects to move into its new Lisbon, Portugal headquarters in December. The European fractional provider already runs all of its operational and administrative functions from the Portuguese capital and it is now investing $28 million in a much larger building that will house more than 400 employees. NetJets Europe said it will retain a sales and marketing office in London.
Continuing a trend, several Part 135 operators recently announced partnership agreements with others in the travel industry. Bombardier Skyjet and Abercrombie & Kent Destination Clubs signed an agreement under which Skyjet will provide air transportation to the travel company’s club member customers via A&K Jets. Marquis Jet, which provides jet cards for NetJets aircraft, is partnering with The Sea Island Co. of Georgia.
Options, awareness, acceptance, security, time, the economy and the hassles of airline travel are contributing to a buoyant U.S. charter market, with activity up an average of 30 to 40 percent over last year. The increased demand is putting pressure on operators to add aircraft to their fleets as they edge up their base rates.
Fractional operator Flight Options expanded its 75/25 program to include the Citation X and Embraer Legacy, in addition to the Hawker 400XP and 800XP. With the purchase of a single share, owners get 75 percent of occupied hours in one aircraft and the remaining 25 percent in another aircraft of their choice.
The U.S. DOT’s unwillingness to ease unpopular restrictions on foreign charter operators flying into the U.S. is jeopardizing moves on the other side of the Atlantic to reform rules covering fractional ownership.
It’s one thing to find a new way of doing business. It’s quite another to make it work. Paul Touw, founder and CEO of Xojet (pronounced exojet) in San Carlos, Calif., believes he has done both.
Avtrak also announced that NetJets has signed a five-year agreement for GlobalNet for the tracking and management of NetJets’ growing worldwide fleet of fractionally owned aircraft. “Finding the right solution that will support our current and future fleet has been a major undertaking here at NetJets,” said Jerry Schlesinger, NetJets Aviation executive vice president.
Nine months after reaching a tentative sales agreement, Raytheon Aircraft and NetJets signed a contract for the purchase of 50 Hawker 4000s (née Horizons) for the latter company’s fractional fleet. Deliveries are scheduled to start next year and continue through 2013. In mid-2003 NetJets canceled a 1999 order for 50 of the jets because of certification delays.