Start-up Swiss charter firm awaits Phenom 100 deliveries

AINonline
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May 10, 2007, 5:25 AM

JetBird, the planned low-cost air charter service, caused quite a stir at the 2006 EBACE exhibition when it ordered 50 of Embraer’s Phenom 100 very light jets and optioned another 50. Speaking exclusively to EBACE Convention News before this year’s show, JetBird managing director Paul Gearney confirmed that the order still stands and that the operator expects to begin flying in April 2009.

The firm orders are backed by an undisclosed, nonrefundable deposit. Gearney said the current list price for a four-passenger Phenom 100 certified to European Aviation Safety Agency (EASA) standards is $2.925 million (up from the $2.825 million at 2005 values announced by Embraer last year). He also said JetBird has secured an undisclosed discount on the list price.

Zurich, Switzerland-based JetBird is owned by Irish private investment firm Claret Capital which has provided an equity investment of $40 million to $60 million through 2012. Conrado Dornier, a member of the famous German aircraft manufacturing family has made a “small, undisclosed investment” in the venture and is interested in operating a possible hub for JetBird near Munich.

Low-cost On-demand Travel

Evidently, the funding behind the start-up operator so far will cover the cost of almost half of the Phenom 100s on firm order. The rest of the money will have to be generated by income beginning in 2009, and/or from fresh investment in the company.

Claret owns 80 percent of the operator; the other 20 percent of its equity is owned by company management. In fact, the legal incorporation of the company is to be transferred to Dublin.

According to 28-year-old Gearney, JetBird has a unique business model that will result in the first pan-European point-to-point, on-demand, low cost executive jet service. He claims it will revolutionize the business travel market with a similar impact to that which the low-cost airlines have had on commercial air travel.

During EBACE’07, JetBird is expected to introduce a new CEO, recruited from one of Europe’s low-cost carriers. Gearney said the individual does not come from leading players EasyJet or Ryanair, although he admitted that candidates from both those carriers had been considered.

Operations will start with a series of hub airports along the length of a “banana-shaped” swathe of Europe between London and Rome. “The route network will not be a great surprise to anybody,” said Gearney. “We won’t go just anywhere because deadheading costs are high. So we won’t be flying to 800 European airports, rather to perhaps 50 business aviation airports,” he explained. Some 65 percent of flights are expected to originate in the UK, France, Germany, Switzerland and Italy.

Lessons from the Low-cost Carriers
According to the JetBird managing director, there is also a “significant demand” for corporate shuttle operations, including some to eastern European cities where scheduled airline connections are often inadequate. Within five years of launch, the company expects to have aircraft permanently based in Switzerland, Germany, Italy, France and the UK. Zurich has been mooted as one of the main hubs and Gearney confirmed that negotiations are also under way with an airport in the London area (not Farnborough), and at cities in Germany’s Ruhr region, such as Düsseldorf, Cologne, Munster and Münchengladbach.

“We will transform European private jet travel by providing an attractive alternative for existing private jet clients at up to 50 percent less than current branded operators, making it available to the affluent masses,” said Gearney. Pricing will be based on a fixed per-hour cost of ?2,500 ($3,325) for the first hour, followed by a per-kilometer cost thereafter and no other charges. Essentially, JetBird’s aim is to serve a very specific target market for people who are used to business class but not business aviation.

The company intends to apply low-cost airline strategies and practices to the air taxi market. Gearney said it will be a virtual operation, outsourcing everything apart from the flying itself. This will include online flight booking, maintenance, flight planning, ground transport and, possibly, pilots. The goal, he said, is “to make flying as cheap as possible for the client and enable a maximum number of people to fly.”

Deliveries of the 50 firm orders are to start in 2009, with the options for up to 50 more to be exercised over a five-year period. The contract allows conversion of all orders and options to the larger Phenom 300. “The 300’s two extra seats make it more expensive, so for the time being we will take only 100s, but ultimately the market will decide,” said Gearney.

The Phenom 100 is powered by a pair of Pratt & Whitney Canada PW617F engines and is expected to enter service in mid-2008. Gearney said the Brazilian model had been chosen because it is “superior to all other aircraft in its class in terms of space and comfort, and is designed to achieve high utilization and efficient turnaround times.” Carrying four passengers, it will have a range of 1,160 nm, allowing
direct flights from Geneva to Stockholm, Kiev, Istanbul or Rabat. According to Gearney, the Phenom’s operating costs will be lower than rival very light jets, as well as comparable turboprops.

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