Flexjet is aiming to be the best, rather than the biggest, fractional ownership programme as the market recovers from a difficult few years. The Bombardier subsidiary is emphasising service over size as it works to renew the significant number of owner contracts due to expire over the next year or so.
Some 30% of Flexjet's 600 owner contracts are scheduled for renewal. "We have a lot of re-signing to do this year and next. We will not grow significantly until the end of this year or into next year," says Jeff Mihalic, vice-president and general manager.
Flexjet has reserved positions with Bombardier for delivery of 51 aircraft over the next three years, but most are for replacement and the fleet is expected to grow from its current 80 aircraft to 100 by the end of the three years.
"A 10% annual growth rate is in keeping with the profitability levels needed to sustain the business," says Mike McQuay, president, Bombardier Aviation Services. After its "best year ever" in 2004, he says Flexjet achieved its highest level of profitability ever in the first quarter, traditionally a difficult period for fractionals because of high fluctuations in owner demand.
Flexjet attributes its improved performance to "heavy investment" in Optimizer, a system developed with Canadian software firm Ad Opt Technologies that optimises aircraft and crew locations and times. Run before each day of operations, and at least once each day, Optimizer can schedule charter backup or customer upgrades to ensure efficient operation.
Now part of Bombardier Aviation Services, and operating more independently of the business aircraft division, Flexjet has resisted pressure to add the ultra-long-range Global Express, says McQuay. "We spent four years trying to market the Global Express and got four deposits on one-eighth shares. When it came to a make-or-break decision, no one was ready to step up," he says.
The super-large Global 5000 looks more attractive, says McQuay, and may be added as the economy improves, but "we do not see the need today". More than 60% of the new deliveries will be the super-light Learjet 45XR and super mid-size Challenger 300, while new large Challenger 604s will have a 12-seat, rather than 10-seat interior to create a greater gap between the two aircraft, says Mihalic.
GRAHAM WARWICK/WASHINGTON DC
Source: Flight International
