London Executive Aviation awaits Mustang deliveries

 - September 25, 2006, 11:21 AM

London Executive Aviation (LEA) is preparing to pioneer the use of very light jets (VLJs) in the European charter market. The UK firm has been tracking the VLJ phenomenon since the late 1990s and is convinced that the promised low operating costs of the VLJs will attract a significant number of customers who hadn’t previously imagined that private aircraft charter could be affordable.

At the same time, LEA was scheduled to add a new Embraer Legacy to its commercial aircraft operator’s certificate (AOC) by the beginning of this month and expects to receive a second example of the Brazilian aircraft by next month.

After a false start in which it backed the now-defunct Safire VLJ program, LEA seriously considered choosing the Eclipse 500 before it decided on Cessna’s Citation Mustang, which might be construed as the more conservative choice. At the NBAA Convention in November, the operator placed firm orders for seven Mustangs and is set to receive these between the first quarter of next year and the start of 2009.

The deal makes LEA Cessna’s largest Mustang customer in Europe to date. Now it is close to placing more orders for the six-seat twinjet and believes it could eventually find work for up to 30 of them in the UK alone. Currently, the average passenger load for an LEA flight is two or three people.

According to LEA chief executive Patrick Margetson-Rushmore, the decision to join the VLJ age with Cessna was largely because the Mustang offers a somewhat larger cabin than the Eclipse, including 26 inches more length and four inches more headroom. It also reflects the operator’s faith in the manufacturer’s product-support infrastructure in Europe.

In addition to Cessna’s own service center at Paris Le Bourget Airport, there are five authorized independent service centers in Europe, located in the UK, Germany, Italy, Switzerland and Austria.

According to Eclipse, it will announce plans to provide product support in Europe during the first half of this year and will have opened a sales office there by next year. The Albuquerque, N.M. manufacturer expects at least 10 percent of its jets to be delivered to customers outside the U.S.

Effectively, LEA spent an additional $1.1 million for the Mustang for more cabin real estate and a proven support track record. However, the company’s management told AIN that Eclipse had posed a serious challenge to Cessna and indicated that they came close to opting for the Eclipse 500 over the Mustang. In particular, they said that Eclipse’s JetComplete fixed-rate support program is an attractive proposition for operators who want predictable operating costs, and they urged Cessna to provide a similar arrangement.

As the UK’s largest charter operator, LEA already flies four Citation Excels, a pair of Bravos and three Citation IIs. Its fleet also includes two Raytheon King Air B200 twin turboprops, as well as a pair of Piper Chieftains and two Senecas. The two Legacys, the Excels, the Bravos and one of the Citation IIs are managed for private owners. LEA is buying the $2.395 million Mustangs itself.

Believes Mustang Will Undercut King Air

LEA expects to be able to fly the Mustangs at operating costs of up to 30 percent less than its other jets and believes they will be more economical than even the King Airs. This assessment is based partly on discussions with the CSE Citation Centre maintenance facility at Bournemouth, UK, which has indicated that a major check for the Mustang will require about one-third of the 750 hours currently needed for the larger Excel.

Over the past 12 months, LEA has increased the usage of its Excels by about 50 percent from about 400 hours per year to around 600 hours. This is partly due to stronger demand during the final three quarters of last year and partly to the operator’s chasing work to fill deadhead sectors and time between charters using online charter booking software such as Avinode. LEA managing director George Galanopoulos believes that the Mustangs could log as many as 800 charter hours a year each.

The operator bases its fleet at Stansted, London City, Farnborough and Biggin Hill Airports. It has its own executive lounge at London City and intends to take office space in the new terminal being built at Farnborough Airport. At other airports it operates out of the premises of established FBOs.

LEA was founded in 1995 and has made a profit every year since then. Its administrative and management headquarters is at Stapleford Airport, about 17 miles northeast of central London, where a duty officer monitors flight operations and charter bookings around the clock.

The King Airs, Chieftains and Senecas (all of which are owned by London Executive Aviation) are based at Stapleford. Margetson-Rushmore said the King Airs are still in demand for crew positioning and emergency medical flights, as well as for some passenger charter work. However, its piston aircraft no longer see much service.

LEA will also disperse the Mustangs at these satellite bases, and if this part of its fleet grows as expected the company might establish operations at airports in southwest England, as well as in the Midlands region, the north and in Scotland. LEA is determined to see the Mustang approved for London City Airport’s 5.5-degree steep approach because the downtown gateway is attractive to charter customers. The operator expects the arrival of the Mustang to double the number of European airports to which it can fly its customers.

Margetson-Rushmore told AIN that he has contemplated creating a network of VLJ charter operators to tap demand across Europe, and LEA has had exploratory talks with operators in countries such as Spain and Italy. However, he added that such a network will prove difficult to establish in practice, not least because VLJ charter profit margins will be slimmer and so it will not be attractive to split these even further by sharing them among other operators.

LEA already offers reduced charter rates for customers willing to buy blocks of flight hours but has found that only about half a dozen or so people have signed up for this arrangement. Some have gone on to own their own complete aircraft, which they have placed under management with LEA.

LEA currently employs 55 people and it will add about 10 more positions with the arrival of the Legacys. Just about all of its pilots are on the full-time payroll, with the exception of a couple of long-established freelance crewmembers who are based away from the company’s main operational bases. “We want [the pilots] available for us at all times and it is important that the customers know them well and see the same faces when they get to the aircraft,” said Galanopoulos.

The service entry of the two Embraer Legacys is LEA’s next big step before the arrival of the Mustangs. With a range of up to 3,200 nm, they will carry up to 12 passengers from London to anywhere in Europe and well into the Middle East and north Africa.