Fractional ownership start-up Jet Republic has suspended its activities, citing the lack of financing available to prospective customers.
A company statement bemoans "extremely difficult conditions" in the aviation market, noting a 22% drop in business jet deliveries in the first quarter and expectations of negative net orders for business aircraft orders for 2009.
"Until very recently, we remained very confident of meeting our objectives, but the aviation asset finance market has completely dried up, making it much more difficult for potential clients to take out and obtain financing for fractional ownership of jets," says the Lisbon, Portugal-based company.
With backing from Austrian private bank Euram, Jet Republic was launched in September 2008, three months after it placed a record order for 110 Bombardier Learjet 60XRs. Comprising 25 firm orders and 85 options, that deal was valued at $1.5 billion.
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Bombardier Aerospace confirms that it has terminated the order. However, the manufacturer insists that it remains committed to the Learjet 60 XR programme, and that production of the aircraft continues at its Learjet factory in Wichita, Kansas.
Jet Republic's decision to halt operations comes just weeks after reports that the company was planning to hire 1,000 employees (including 500 pilots) over the next years, and was mounting a legal challenge to a Portuguese court injunction that restrained it from hiring employees of NetJets, a leader in the fractional sector. The company's founder Jonathan Breeze is a former NetJets commercial director.
In July, Jet Republic slashed the hourly rate for its light cabin Jet Card programme. Earlier in 2009, Breeze had explained that Jet Republic was aiming to entice "working-class millionaires" into business aviation with an offering of hot food, wi-fi connectivity and bespoke continental-style interiors on its Learjet 60XRs, the first of which had been due in October 2008, with an aircraft joining the fleet every month thereafter.
Following the suspension of activities, Jet Republic will, it says, be "reviewing its options" while its "fully operational" holding company works with shareholders "to ensure that the interests of our existing clients, employees and suppliers are protected to the best of our ability".
Source: Flight International
