Assuming the next six months or so do not see a deterioration in trading conditions, the NetJets Europe fractional-ownership program should finally achieve an operating profit in the second half of this year.
As demand for commercial air travel increases in India, business aviation entrepreneurs are clamoring for position in a classic chicken-and-egg scenario. Those who will be successful must make an early entry into the market, but they are severely limited in their ability to operate because the infrastructure to support general aviation is still being developed.
The unionized NetJets pilots, represented by IBT Local 1108, on November 21 overwhelmingly ratified the tentative labor agreement signed on October 8, nearly four years after the pilots’ contract became amendable. Of the valid 1,924 ballots received (about 91 percent of the NetJets pilot workforce), 1,616 (84 percent) voted for the work contract and 308 (16 percent) opposed it.
In the first eight months of this year, the top five fractional operators hired more pilots than they did in all of last year, according to aviation job placement firm AIR of Atlanta. NetJets, Flight Options, Flexjet, CitationShares and Avantair hired 498 pilots through August this year versus 482 for all of last year.
Fractional operator Flight Options has launched Global Access, an overseas travel program using a fleet of nearly 100 charter aircraft accessible to the company’s aircraft owners to provide a seamless travel experience in Europe and Asia. Global Access does not require travelers to purchase a block of hours, buy a share, pay monthly management fees or place a deposit. Instead, pricing is based on aircraft category and trip itinerary.
Ever since the FAA issued its final rule on “Regulation of Fractional Aircraft Ownership Programs and On-demand Operations” known as Part 91, Subpart K [which took effect in the U.S. in February–Ed.] in September 2003, business aviation associations on both sides of the Atlantic have been trying to harmonize regulatory standards for fractional ownership operations.
Cleveland-based fractional operator Flight Options is now offering an optional extended service program for new owners that covers flights to Mexico, the Caribbean and Bermuda. Another new option includes applying part of the cost of the company’s JetPass card toward the purchase of a fractional share.
Holders of the Marquis Jet Card will have new restrictions that will require they book flights farther in advance during peak travel times. Also, starting June 1, cards must be purchased 60 days in advance of a peak travel period to fly during that period. Card holders will also no longer be guaranteed their subscribed airplane model, but only one in its size group during peak travel days.
All of the major providers have jet-card programs: NetJets has Marquis, Flight Options has JetPass, CitationShares has Vector and Flexjet has Premier Fleet. It should be noted that the Marquis program is unique among the card programs because it is run by an outside party that buys shares in NetJets aircraft and resells blocks of time in them. The other three fractional providers administer their respective jet-card programs themselves.
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.