Fred Reid, the recently appointed president of US fractional ownership and charter company Bombardier Flexjet and Skyjet US, is a new boy on the business aviation block.
He has spent more than two decades working for many international airlines including American, Delta, Lufthansa and Virgin America, gaining an enviable reputation and pedigree.
“While I haven’t worked in the business aviation industry before now, I have used business aircraft during my career so I understand this market from a customer perspective,” he says.
He adds that his long-standing exposure to the airline industry; in particular his dealings with first-class passengers, has helped him to develop an acute knowledge of high-end passengers.
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“Although there is a similar customer profile between first class airline passengers and business aviation customers, there is a marked difference between the two end-products. The airlines are dealing with a mass market while business aviation is smaller and more personal,” says Reid.
Business aircraft users are “discerning, knowledgeable and perceptive”, Reid continues. “Flexjet customers need and demand a product that is efficient, convenient time saving and comfortable.”
Reid replaces Michael McQuay in the top job at Flexjet, but is undaunted by the responsibility of heading the second-largest fractional ownership company in the USA after NetJets, and the only fractional to be owned by an aircraft manufacturer.
“Although this is my first foray working in the business aviation market I am relishing the challenge,” Reid says. “My experience in building global brands like Lufthansa and Virgin America will be hugely important in my new role as I take the company forward.”
Since its launch in the US in May 1995, Flexjet has grown from strength to strength. To date the Dallas-based operator has 960 shareholders and operates a 105-strong Bombardier business jet fleet, including the Learjet 40XR/45XR/60XR, Challenger 300 and 605.
Flexjet is adding aircraft at a rate of between 20 and 25 a year. “We have many dozens of aircraft on order over the next few years - including seven Learjet 85s - for which Flexjet is the launch customer - and we have the capacity to add several more aircraft to the fleet as and when we need then,” says Reid.
Flexjet is a profitable company, he admits “and we intend to grow on that success”. Pivotal to Flexjet’s accomplishment in recent years is the introduction two years ago of the Flexjet 25 jet card programme which provides travel-by-the-hour on a fleet of Learjet 45’s 60s and Challenger 604s. The card is available as a traditional 25h programme and also includes options for 30 and 35h.
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“The card has been very successful and is continuing to do well,” Reid says. “Flexjet 25 has provided a vehicle for people to get into business aviation for the first time or as a first step into fractional ownership. It is a superb entry-level product.”
The card is also popular with fractional customers who are looking to supplement their share with additional hours. “Considering we were a relative latecomer to this market we have had a disproportionate amount of growth,” Reid says. Skyjet is also doing well, and continues to provide a successful stepping stone from ad hoc charter to Flex 25.
Reid says the rate of growth has begun to slow due to the softening US economy and customers become more cautious and cost-conscious, but the embattled financial markets have had little direct impact on the business. “We are not experiencing a contraction but the rate of growth has slowed in the first three months compared to last year,” he says.
“Flexjet is not massively exposed to the financial markets but if these problems spill into the rest of the industry, of course we could be affected. In the meantime we are continuing to grow the business.”
Reid has a number of ambitious expansion plans up his sleeve. These include providing a non-stop, long-haul service to its US customers, “probably with the Global XRS”; and relaunching a European fractional ownership programme seven years after Bomabardier pulled the plug on its Flexjet Europe fractional venture.
The Canadian airframer retreated from the continent’s fledgling fractional market after two years following hefty financial losses. Flexjet Europe then restructured, and with the help of third party charter operators formed an upscale block charter company, which it later renamed Skyjet International. The company was sold to Austrian VIP charter company VistaJet in July.
“We are looking at European fractional ownership again – we are ready for it now but we have to figure out the optimal way of implementing it,” says Reid.
He says Europe has a strong appetite for fractional ownership and applauds NetJets for “laying the groundwork” and sticking with its programme – introduced in 1996 - at huge expense and in the face of overwhelming industry and consumer skepticism.
“We want to re-enter the fractional ownership market in Europe. The continent’s geographic diversification coupled with the growth and widespread acceptance of business aviation across the region shows there is a market for it,” he says.
Source: Flight Daily News
