GRAHAM WARWICK / WASHINGTON DC
Merger of Flight Options and Raytheon Travel Air is set to reduce costs and offer stronger competition to rivals
Flight Options and Raytheon TravelAir are to combine, creating the second largest business aircraft fractional-ownership firm. Privately owned Flight Options will hold 50.1% of the new entity, and Raytheon 49.9%. The company, still to be called Flight Options, will operate 200 aircraft on behalf of around 1,600 share owners.
Joe Moeggenburg, president of Aviation Research Group/US, says the alliance will create a strong competitor to Executive Jet's industry-leading NetJets scheme, which operates a fleet of 270 aircraft. The combined company will move into second place ahead of Bombardier FlexJet, which operates 110 aircraft, he says.
Waiting in the wings to become a major player is United Airlines subsidiary Avolar, which plans to operate 205-210 aircraft by the end of 2006.
The merger will also allow financially troubled Raytheon Aircraft to focus on its core aircraft manufacturing and support business. Under the agreement, expected to be finalised by the end of the first quarter, Raytheon will supply 115 new business jets to the new entity in a transaction valued at around $900 million over five years.
Flight Options sells shares in used aircraft and, since its formation in 1998, has become the fastest growing fractional-ownership programme. Raytheon Travel Air, meanwhile, sells shares in new aircraft. The companies' fleets overlap, with both operating Beechjet 400A light jets and Hawker 800 mid-size jets as well as large-cabin Bombardier Challengers.
The new combined fleet will consist of 25 Raytheon KingAir B200 turboprops; 95 light jets (including 81 Beechjets); 65mid-size jets; and 15 large-cabin aircraft. Raytheon TravelAir has Premier I entry-level jets and super mid-size Hawker Horizons on order, while Flight Options has ordered 25 Fairchild Dornier Envoy 7 large-cabin aircraft.
Moeggenburg says the alliance also provides an opportunity to reduce costs by eliminating duplicated infrastructures.
Flight Options says a consolidated operations centre will be established at its Cleveland, Ohio, headquarters by the end of the first quarter.
Source: Flight International
