RICHARD PINKHAM LONDON
Airline interest in executive jet services appears to be on the rise, with United Airlines the latest to outline plans.
United has said that it will set up a separate standalone subsidiary to run the business jets on a fractional ownership basis. Chief executive James Goodwin notes that the corporate aviation industry has seen "dramatic growth" over the past decade, reflecting "the needs of our corporate customers". United estimates that the new business, which will be unrelated to the mainline carrier, could have around 200 aircraft under ownership by 2005.
Meanwhile, Virgin Atlantic has expressed interest in acquiring executive jets for flights across the Atlantic. Virgin would use the aircraft and fly from secondary - and hence uncongested - London airports in an attempt to capture the super-premium class passengers that have belonged to British Airways since the advent of the Concorde service in 1975. "We would not want to replace the Concorde service but we would rival it." says the carrier.
For its part, BA will also offer a business jet service of a sort, having recently announced a joint venture with UK air charter broker Air Partner that will complement BA's scheduled offerings. Air Partner's Tony Mack explains the service by saying that a BA premium class passenger flying from London to South America could then transfer to an executive jet to fly to regional cities.
Qatar Airways is already in line to take delivery of an Airbus Corporate Jet - based on the A319 - shortly after June's Paris air show. The carrier will use the jet in a 36-seat first-class configuration for charter operations but also for flights to London, Geneva and Singapore.
Airline analysts are not enthusiastic about airlines branching into corporate jets. UBS Warburg analyst Sam Buttrick says that "the airline business is complex in its own right and United hasn't done so good a job at that, of late, so we'd like to see them stick to their core competencies." He adds: "Conceptually, fractional ownership is interesting, with possible synergies. However, the airlines' - including United - track record with diversification is not stellar."
Source: Airline Business
