Bombardier Flexjet (booth 6418) is introducing a new program that could bring in a hole new group of owners to its fleet and improve the offering to existing fractional owners. Called “Flexjet One”, the program is effectively an aircraft management program, but offers a lower cost per hour flown compared with traditional aircraft management alternatives, says Flexjet president Mike McQuay.
Under the new program, owners purchase all shares in one aircraft, under Flexjet management. Benefits include access to the entire Flexjet fractional fleet, the ability to utilize more than one aircraft in a single day, and predictable expenses, no start-up costs associated with typical aircraft ownership, and no decisions to make regarding crews, hangars and maintenance.
“It’s a unique value proposition,” says McQuay. “It fits for a customer who wants to own the whole aircraft but doesn’t want the complexities of ownership. It is also appealing to the customer who wants to own their own aircraft, but doesn’t really need it for all the hours. We buy unused time to supplement core fleet hours for ourselves.”
McQuay says that the fixed price agreement gives the owner benefits all round. “For every hour he sells back to us it is for that fixed price. He gets predictable revenues. Offsets are not subject to fluctuations in the on-demand charter market. Owners will never have to subjugate their own schedules to gain charter offsets. The benefits are guaranteed up front, and missions flown on their aircraft will be Flexjet 25 jet card customers and other fractional owners, as opposed to ad hoc charter customers.”
The owners also benefit by having an entire fleet at their disposal. “You never have the downtime issues typically associated with owning a single aircraft, and you have the peace of mind knowing you can rely on an organization extraordinarily skilled in aircraft management, maintenance, crew management, and with considerable purchase power.” The fractional program benefits include the Versatility plus program, with secondary service ferry waivers to Europe and Hawaii.
“These are not available with traditional programs,” says McQuay. Flexjet – like its competitor NetJets as moved into profit. “It’s been a strong year for us,” McQuay says. “We are always looking to find new products that enhance our value to owners. This has worked for us and we are about 50% better than where we were last year. “We and NetJets are about the only ones making money. People ask about that. It’s a romantic business, but the margins are very, very thin.
It is very difficult mainly because of the logistical trials and tribulations you have to face every day.
“We made sure we didn’t have way too many fleet types -- that leads to too much tooling and complexity. We keep our fleet type to a manageable level that meets both ours and our customers’ requirements and gives us ability to be efficient,” he says. Although McQuay recognized the expansion of business aviation outside the USA, he is not ready to take on NetJets and their offerings in Europe and Asia.
“In all honesty we didn’t do a very good job of introducing Flexjet in Europe and we were losing quite a bit of money in that endeavor, so we chose to sit back and see how things play out before we make another attempt at that market. The popularity is growing and there could be an opportunity in the future, but we are not ready to embark on that at this time – certainly not in the next year.” McQuay says the “seamless” relationships with the Bombardier Skyjet service in Europe gives the Flexjet owners the coverage they need.
“Those who desire to use aircraft in Europe ansition to SkyJet International and can buy the hours directly or exchange hours that they own on our program for those hours on kyjet.” With nearly 100 aircraft in the fleet and growing services for almost 800 owners, it is not surprising that Flexjet comes to AA n a bullish mood. “We are a little bit ahead of where even we thought we would be at this stage,” says McQuay.
“It took 10 ears to get to an operational level of efficiency where we were operating profitable, now we are totally profitable we are outdistancing ven our best estimates of where we are going with the business. “Our efficiency and quality are our key standard bearers and our lexibility to offer diverse level of products is our standard,” McQuay says.
Source: Flight Daily News