Major fractional operators are slowly changing their fleet makeup and eying new markets as their clients request more international flights, senior executives at NetJets and Flexjet/Flight Options agree. At the same time, though, shorter flights in smaller aircraft are bringing new customers to private aviation, said an executive at membership-based Wheels Up. The executives painted the changing fractional and membership landscapes during NATA’s 2015 Aviation Business Conference in Washington, D.C.

NetJets, which has operations in the U.S., Europe and China, is considering further expansion into markets such as South America, Canada and Mexico, according to Chuck Suma, senior v-p of global asset management. The move is in response to customers’ increasingly far-reaching travel needs, Suma said. But it also comes as customers worldwide become more interested in fractional operation. “We see opportunity for fractional growth around the world,” he said.

The changing demand is also reshaping the fleet dynamic, he said. At one time the fleet composition could be described as a pyramid, with light aircraft forming the base. Now the super-midsize category is poised to become the largest segment. The shift is prompting NetJets to re-evaluate its long-range fleet, Suma said, adding that the company might decide on new requirements shortly. Range will be a key factor in its fleet strategy, he said, adding that the dynamic reflects “where you make money.”

Megan Wolf, vice president of owner experience for Flight Options, agreed that more customers are travelling farther and to more places. This was the driver behind the order by Flight Options sister company Flexjet for up to 50 Gulfstream G450s, G500s and G650s. Flexjet took delivery of its first two G450s in June.

While international flying is up, so too is flying in the U.S., considerably, Wolf said. Leisure flying is still active, and the fractionals are seeing more corporate activity, particularly on the mergers and acquisition front, she added.

Wheels Up COO David Kaufman, meanwhile, said his company is happy in the small-aircraft space, noting that Wheels Up now has 31 King Air 350i turboprops and 10 Citation Excel/XLS jets in its fleet. The company has plans to take five or six more King Airs this year, along with at least a handful more Citations in the next couple of years. More than one-third of Wheels Up’s 1,400 members come from the “commercial world” with no private aviation background, he said. Wheels Up expects membership to grow to 2,000 by year-end.

The company is looking for new ways to draw people into private aviation, such as a potential ride-sharing program. Wheels Up sees significant potential in ride-sharing but must work through regulatory obstacles, Kaufman said.

Cabin Comforts

While their fleets and program models differ, the three executives agreed that customers’ expectations about technology are driving cabin needs. And the fractionals have refocused on the interior.

“Technology has changed what we can do with airplanes,” Suma said. He noted a major driver behind the company’s move toward the “Signature Series” customized aircraft was the addition of Wi-Fi and improvements in in-flight entertainment. But he added that the improvements go beyond that to general aircraft health monitoring; access to weather, charts and other data; and other safety-enhancing technologies.

“Wi-Fi for us is now a given,” Wolf said. Flight Options has turned away potential aircraft that did not come equipped with certain communications capabilities.  “Talk and text has become more and more important,” she said. Wheels Up also views Wi-Fi as a critical component of its services, Kaufman said, and has equipped both its King Air and Citation fleets.

The fractionals have stepped up their efforts to bring luxury back into the cabins. “The feedback from our owners was that they felt flying fractional had lost a lot of luster,” Wolf said. Flexjet has worked to bring interiors and furnishings to its fleet that match a “different level of expectations,” she said.

Suma added that interior improvements were a driver behind NetJets’ Signature Series. NetJets continues to evaluate all aspects of its interiors, he said, citing a recent series of seat tests with owners in Teterboro, N.J.

Another initiative under way at the fractionals is renegotiating with existing vendors, along with adding new ones. Suma said that NetJets will be “intensely” focused on this effort over the next year with the goal of expanding its partnership with service providers and ensuring they have laid the groundwork for long-term relationships. “Previously it had been on how to contain costs,” Suma conceded. “Now it is how to build relationships.”

This effort is also under way at Flexjet/Flight Options to ensure the fractionals have close ties with the people who take care of the aircraft. 

At the same time, Flexjet has been undergoing a change in livery. Wolf said the company has kept an aggressive schedule, with 26 of the 150 aircraft in the fleet already updated. The changes are part of a larger rebranding following the merger of Flexjet and Flight Options. At the same time the companies maintain separate identities, she said, noting they offer markedly different products.