Mention business jets and most people think of Cessna jets or private jets for the corporate elite.
Consider, however, a scenario all too familiar to business travelers: Your flight is delayed, again, and you fear missing a meeting with a potential client. If the delay lasts any longer, you may lose more than the non-refundable airfare.
Idle and frustrated, you imagine your top competitor stealing the show in your absence.
The inconvenience of commercial business travel is reaching an all-time low: The Federal Aviation Administration reported last summer that June 2000 was the worst month on record for flight delays. Looking ahead to the summer of 2001, one can imagine the headaches, or imagine an alternative: fractional jet ownership.
The concept is simple. Companies buy a share of a jet, as little as one-eighth or as much as one-half, depending on the number of hours they plan to fly in a year. The result is access to the aircraft 24 hours a day, 365 days a year. They pay monthly maintenance fees and hourly flight rates in lieu of hiring and training pilots and repair crew, paying insurance, hangar fees and buying fuel.
To arrange a flight, companies give as little as a few hours’ notice and are guaranteed the use of a jet from the program’s fleet. If a fleet is saturated, many programs will charter a plane for clients at no charge.
– Planes Available Within Hours
The appeal for fractional ownership is clear. It provides an alternative to crowded airports and planes, and the guarantee of having an airplane “on call” in eight hours or less.
The programs are ideal for companies and individuals who don’t have the resources to operate their own corporate fleets, but travel frequently enough to be at the mercy of commercial air travel.
What’s more, fractional ownership travelers have the ability to fly into smaller airports closer to their final destinations.
According to the National Business Aviation Association, the aircraft used in fractional ownership programs have access to 5,400 U.S. airports vs. the 580 used by commercial planes. This means less time wasted on layovers and transfers to and from airports, and more time available to focus on the task at hand.
The flexibility of fractional jet ownership also comes in handy when travel plans change during a business trip. Itineraries can be adjusted at the last-minute or even real-time, without the worry of finding an available commercial flight or incurring exorbitant rescheduling costs.
Another benefit of fractional ownership: increased productivity for business travelers. Away from crowded airport terminals and business-class seating, business people can work on important documents and discuss sensitive matters.
– Environment Is More Productive
Fewer interruptions from other passengers or crewmembers, plus onboard business equipment such as fax and phone capability also add to a more productive traveling environment.
Some public companies experience scrutiny and criticism for funding corporate perks, like jet aircraft, during economic slowdowns. Fractional ownership programs provide the convenience of jet travel while demonstrating the aircraft’s status as a tool solely for business-related activities.
In the IT industry, for example, downtime means lost revenues, even up to millions of dollars an hour. Access to on-demand flight service can give consulting and service companies a more aggressive timeframe for solving IT problems.
A simple cost comparison can tell a lot. A last-minute, midweek fare from San Diego to New York averages about $3,200 round-trip. For a team of six executives, that’s almost $20,000 for a six-hour flight. Depending on the program, fractional ownership can save up to 40 percent on that cross-country trip. Factor in the time saved avoiding delays and the increased productivity, and fractional ownership far out-values commercial air travel.
– Fractional Owners Expected To Increase
According to the National Business Aviation Association, the number of owners in fractional ownership programs has grown an average of 56 percent a year since 1986. The association sees continued double-digit growth for the next few years as more companies include fractional ownership in their corporate travel plans.
To meet this demand, fractional jet ownership vendors such as CitationShares, NetJets and FlexJet are expanding their fleets and retooling their services. NetJets, owned by Warren Buffett’s Executive Jet, Inc., claims that 40 percent of its European clients are small- to medium-sized companies.
Similarly, CitationShares sees small- to mid-sized companies dominating the U.S. fractional ownership market.
The good news in all of this is that companies now have an alternative. Fractionally owned aircraft can help business travelers be more mobile and avoid the growing delays in the nation’s airports. The news couldn’t come soon enough as the FAA estimates that by 2010 nearly 1 billion passengers will fly annually, compared to 638 million in 1998.
Bishop, based in Providence, R.I., supports the marketing efforts for CitationShares.