The business aviation community seems at last to be waking up to the ultimate win-win business solution - fractional ownership. So much so that the concept itself is on the cusp of driving one of the biggest transformations in business travel and the business aviation industry at large - and there appear to be few or no limits in sight.
What could be simpler than for individuals or corporations needing to use air travel to meet their business requirements, whether it be 50 flight hours or up to 3,000 annually, to own a share in a business jet with guaranteed flying hours and availability at just a few hours notice? Why purchase your own aircraft with the full costs on your books when you need only buy a fraction of it to gain the same business benefits, and at literally a fraction of the cost?
The win-win factor does not stop with the user, either.
With fractional fleets growing at a rate of 14% a year, business jet manufacturing and business aviation services are on a high. One forecast puts aircraft orders for fractional fleets rising to 3,300 over the next 20 years, a staggering 33% of the 9,900 jet deliveries projected over that timeframe. Pioneer of the fractional ownership concept and market leader, Executive Jet, is showering business jet builders with aircraft orders. A further 161 business jet orders, worth nearly $3 billion including options, have been signed in the last week, notching up the company's investment in its NetJets fractional ownership fleet to $7.3 billion, for a total of 340 aircraft.
Aero-engine, avionics and other business aviation suppliers are rubbing their hands with glee at the prospect of boosting their production lines as the fractional boom promises to underwrite efficiency improvements through economies of scale. Initial scepticism, and even fear, of fractional ownership by an industry comfortable with its tradition of supplying direct to loyal single owner repeat buyers, is now turning to acceptance and encouragement.
But the real wake-up call for manufacturers is the burgeoning influence fractional ownership will have on its product development, production and delivery schedules as it forces companies to run faster to keep up with growing demand. Even supersonic business jet development now appears possible with the prospect of a guaranteed string of fractional owners to underwrite product investment.
Fractional ownership can be expected to drive a transformation of the business aviation industrial landscape simply through relentless pressure on manufacturers to rise to the challenge of meeting higher production and faster delivery schedules. And it is not simply the manufacturers that are being put to the test in this apparent landslide shift in business aviation. The voice of fractional ownership will begin to exert pressure on all corners of the business aviation sector to improve standards of reliability and safety. Global maintenance and overhaul infrastructures, for example, need to be up to scratch to support 24 hour, seven days-a-week, guaranteed service requirements demanded by fractional ownership companies. That will not only create jobs but also help raise competency through stringent standardisation and monitoring of maintenance engineering and spares support.
Even business aircraft charter operators, especially in Europe, are beginning to see that there are more virtues than threats with fractionals as they recognise that charter aircraft will continue to be needed to help guarantee availability. More business also holds out the prospect of raising levels of service, reliability and safety of business charters. Pilots, too, no longer feel their jobs are threatened, seeing that fractional ownership improves job prospects, especially in recession. And corporate flight departments are coming to terms with the fact that fractionals are here to stay and can augment their own efficiency.
But this power of fractional ownership needs to be handled with care. The question of who regulates, polices, represents and lobbies for fractionals needs to be addressed as thousands of part owners threaten to push bodies like the NBAA in new directions. The immediate risk is that regulators might stop in its tracks the progress fractional ownership brings just as the disbelievers are converted.
"What could be simpler to meet business air travel needs than to own a share in a business jet with guaranteed availability?"
Source: Flight International
