UK operator Club328 has devised a new way to market charter flights through its new SkyBond program. Customers hand over £1 million ($1.75 million) to be put in an escrow-protected bank account in Club328’s name for six years. Club328 gets the interest earned over this time and the customer gets 25 flight hours each year (150 hours total) in one of the company’s Raytheon Premier Is.
After six years the customer is guaranteed to get his £1 million back, even if Club328 goes bankrupt. The flight hours are provided with no additional charges and no aircraft positioning fees. Bond holders do not have any shared ownership in the aircraft, so there is no depreciation amount to be accounted for.
Club328 CEO Mike Farge said SkyBond will be attractive to some customers because it ensures completely fixed flight-hour costs over six years. Customers relinquish the interest they could have earned on the £1 million, but they also avoid paying the tax that would have been due on that sum.
Research by AIN into UK retail banks’ savings account rates suggests that the £1 million could earn up to £340,000 in interest during the six-year period. Divided among the 150 hours offered by SkyBond, this equates to a flight-hour cost of around £2,267 ($3,967). However, Club328 maintains that, factoring in the tax that would have been due, the per-hour rate is actually closer to £1,600 ($2,800).
Farge said that Club328’s main motive for introducing SkyBond is to build a solid customer base and to be able to leverage this with banks it approaches to fund further fleet growth. He said that some SkyBond customers will likely want to fly more than 25 hours each year and they can either buy more ad hoc hours or join the operator’s new SkyClub block charter program, which was launched in January.
Club328 currently has two Premier Is and intends to add two more by the end of next month. These are low-hour (about 50 to 100 hours each) pre-owned aircraft that it has bought directly from Raytheon.
The Southampton-based company also operates a pair of Hawker 800s and one Hawker 700, as well as a 15-seat Dornier 328Jet and a 12-seat 328 turboprop twin. It is now seeking to add at least one more 328Jet to its fleet, after having acquired the assets of bankrupt manufacturer AvCraft Aerospace in December.
In January Club328 launched a block-charter program called SkyClub. This offers 10-, 25- and 50-hour blocks in the Premier I, Hawker 800/700 and 328Jet. The rates are all-inclusive, with no positioning costs or management fees.
The entry-level package is 10 hours in the six-seat Premier I for £3,000 ($5,250) per flight hour. In the 328Jet, 50 hours is priced at £5,500 ($9,625) per hour. Club328 is also willing to quote block rates for customers with more complex flight profiles who might require time in a mix of aircraft types.
Officially, SkyClub customers need to give 72 hours’ notice of a flight booking to guarantee that their aircraft type is available. However, Club328 said that in practice aircraft would likely be available with just 24 hours’ notice. If the chosen type is not available with 72 hours’ notice, the operator will provide a free upgrade or offer a smaller aircraft at a reduced per-hour rate. These terms apply to SkyBond customers as well.
Farge said that Club328 is looking to sign up about six SkyBond clients for each of its
Premier Is. It will also likely restrict SkyClub membership to an approximate ratio of six customers per aircraft to avoid having insufficient capacity.
Meanwhile, the company’s maintenance subsidiary, 328 Support Services, is tapping fresh demand for overhaul and refurbishment of Dornier 328Jets and 328 turboprops. Farge said that after his company acquired AvCraft’s assets, prospective 328 operators have found the confidence to proceed with aircraft purchases comfortable that a support infrastructure is available.
The company, which has support operations at Southampton and the former Dornier/AvCraft plant at Oberpfaffenhofen, Germany, is now contracted to refurbish seven 328Jets that had been parked in the desert by regional airlines. These are for an undisclosed private company that is looking to remarket the aircraft. An undisclosed Danish client is now negotiating to take another 10 aircraft.