GRAHAM WARWICK / WASHINGTON DC
The cost of shared ownership is set to fall as fleet revamp draws clear line between used and new aircraft
Flight Options has unveiled a new pricing strategy, following the merger with Raytheon Travel Air which made it the USA's second-largest fractional ownership company. The new structure reduces the cost of share ownership and provides a clearer demarcation between new and used aircraft in Flight Options' expanded fleet.
The Factory-Supported Pricing programme reduces the cost per occupied hour of a new aircraft to reflect the lower maintenance costs provided by the manufacturer's warranty. Whereas other fractional programmes charge the same hourly rate throughout the five-year ownership agreement, Flight Options' fee will start lower and increase as the aircraft gets older.
"Flight Options has never sold new aircraft, and we wanted to sell new aircraft the same way for fractional as for whole aircraft owners," says Darnell Martens, assistant to the chairman. "The ownership cost of a new aircraft is less in year one than in year five, and we have put that into our pricing structure."
For a new Raytheon Hawker 800XP, for example, the ownership cost will be $1,390/h in the first year, increasing to $1,850/h in the fifth. Over a five-year share ownership agreement, compared with the flat rate of $1,828/h charged by competitor NetJets, this results in savings of almost 10%, according to Martens.
After five years, the aircraft will become part of Flight Options' pre-owned fleet. The owner can trade in the share for part-ownership of a new aircraft, or keep the share and pay used-aircraft operating costs - $1,850/h in the case of the Hawker 800.
Martens expects companies to trade in their shares in order to benefit from the lower operating costs, while individuals are more likely to stay with the aircraft to avoid the capital outlay of buying a new share.
Flight Options expects to stop buying used Hawker 800As later this year as former Travel Air Hawker 800XPs begin moving into its pre-owned fleet. Martens says both sides of the company's business are likely to grow, and Flight Options has orders for 35 Beechjet 400As, 34 Hawker 800XPs, 50 Premier Is and 119 new Raytheon aircraft.
Flight Options is holding on to orders for 25 Envoy 7s despite the insolvency of manufacturer Fairchild Dornier. Martens says the merged company remains interested in Raytheon's Hawker Horizon, but in common with other customers has yet to be provided a delivery date.
Source: Flight International
