New York, July 19: How does a private jet service woo customers in the middle of a recession? Go after the first-class airline passenger, of course. Two fractional jet ownership companies have announced agreements with foreign carriers that would let them pursue airlines’ premium customers.
CitationAir of Greenwich, Conn., has opened its members-only private jet service to British Airways customers traveling in the United States, while Flexjet of Richardson, Tex., will join with Korean Air. Both private jet operators say success will be measured one new passenger at a time.
“If we got one every day, it would be a home run,” said Mr Woody B. Harford, senior vice president at CitationAir. “At $6,000, $8,000 or $10,000 an hour, that’s massive growth in revenues. We’re not selling coach seats.”
When the economy was good, fractional jet companies did a booming business. CitationAir, owned by Cessna, and Flexjet, owned by Bombardier, were effective sales arms for their parent companies. Together, they took delivery of 200 small jets from 2002 to 2008.
Customers seeking the kind of luxury, privacy and convenience not available on commercial airplanes could buy a fraction of a business jet, though it was not cheap, as Mr Harford acknowledged.
The smallest share — one thirty-second of his company’s smallest jet, the six-passenger CJ3 — cost $137,500, while a quarter share in the largest jet, the nine-passenger Sovereign, costs a little under $2.5 million. However, aircraft sales stalled and demand for private jet service plummeted. NetJets, the largest operator and the company that 24 years ago pioneered the concept of fractional jet ownership, laid off 1,200 of its 8,300 workers, changed its top executive and found itself buying back dozens of airplanes from its customers that it could not sell off or fly.
“Certainly it has been a difficult time everywhere from manufacturers to owners,” said David Sokol, chief executive of NetJets.
Ms Ira Riklis, of Lydia Security Monitoring, a home security firm, said he was cautious three years ago when he bought a card from Flexjet that was a commitment to prepurchase a set number of flight hours — but ended up using the plane so much he traded the card for a share in a Learjet 40. In a recent interview, he said his concern was not how much it would cost to send employees to meetings on his business jet but rather about how much he would save.
“Managing is about dealing with limited resources,” he said. “In the case of my executives’ time, it is a much more precious resource to me then the cost of the private jet.”