UK-based fractional ownership program European Business Jets (EBJ) is looking to move into aircraft management to boost its available fleet. The company is also considering adding new types to its fleet, including the Embraer Phenom 100 and HondaJet very light jets. It sells shares in pre-owned jets and currently operates a Cessna CitationJet and a Citation CJ1.
Earlier this year, EBJ introduced the Experience Card as a block-charter option that allows new customers to try private aircraft by buying five flight hours for £14,750 ($27,730). About half of its 25 clients are currently flying under this plan, and the rest hold shares in the CJ1.
EBJ sells one-sixteenth shares in pre-owned CJ1s for $260,000, allowing 37.5 occupied flight hours per year. Owners pay £2,700 ($5,076) in monthly management fees and £1,300 ($2,444) for each occupied flight hour.
Customers are guaranteed use of an aircraft with 12 hours’ notice. Unlike many other fractional providers, EBJ allows a minimum flight time of 30 minutes. According to CEO Graeme Deary, this policy has proved popular with people who need to make short flights between regional locations that are not easy to reach by scheduled airline service.
For example, a client based in Jersey (one of the UK’s Channel Islands off the north coast of France) needs to travel regularly to and from Norwich in eastern England. Using the CJ1, the trip takes barely an hour, while by airline and road it takes nine hours. Many of EBJ’s clients are in the financial services and real estate development businesses.
EBJ’s fractional agreements run for five years, with the company committing to buy back aircraft shares at any time for “fair market value.” If customers leave the program before 18 months, they have to pay the monthly management fees for the remainder of the agreement. Over the five-year term, EBJ guarantees that the management fees and occupied hourly rates will not increase by more than the OECD cost-of-living index.
The program does not offer shares in aircraft that are more than five years old. Deary said that in practice, the company’s aircraft are younger than this. He expects to add two more aircraft to the fleet by year-end, and these may include a Citation XLS and another CJ under management contracts.
EBJ was founded in October 2004 and raised further capital in April last year by selling shares on the Alternative Investment Market of the London Stock Exchange. Deary said the company’s growing revenues will fund further fleet acquisitions. EBJ is based at Cambridge Airport, 70 miles north of London, and its fleet is maintained by the CSE Citation Centre at Bournemouth International Airport.