Bombardier’s Skyjet program goes global

Aviation International News » March 2005
February 2, 2007, 5:03 AM

Bombardier has launched Skyjet International as a global network of fixed-rate executive charter services spanning North America, Europe, the Middle East and the Asia-Pacific region. Customers who want to fly in or among any of these regions can opt for block-charter terms through the Canadian manufacturer’s existing Jet Membership card or take advantage of the ad hoc rates the manufacturer previously offered under the Skyjet name in the U.S. and Europe and through the Flexjet Asia program.

The main addition to the Skyjet network is the Middle East region. Headquartered in Dubai in the United Arab Emirates, the operation covers a service area that extends west-east from Egypt to India and south-north from Yemen to Uzbekistan. The worldwide fleet numbers more than 900 jets, including nine Bombardier types from the Learjet, Challenger and Global Express lines. The vast majority of these aircraft are in the U.S., with 66 in Europe, 20 in the Middle East and nine in the Asia-Pacific region. Skyjet can also offer helicopters and some turboprop aircraft on an ad hoc basis.

The fixed, occupied-hour prices for both block and ad hoc charter options vary among the regions, reflecting differences in local operating costs and market forces. Broadly speaking, rates in the U.S. are the lowest, followed by those in the Middle East, Europe and the Asia-Pacific region.

In the Asia-Pacific region occupied-hour rates are not available (so customers pay for positioning flights on the so-called “all-hours” basis). But Skyjet offers special fixed rates for local customers who commit to 25 or more hours over the course of a year, and block charter clients from outside the region can also fly on fixed rates.

Customers can buy Jet Membership cards on a pre-paid basis or by making a deposit and making further payments every two weeks as they use hours. Bombardier allows customers not to fly up to 25 percent of their annual allocation of occupied hours, meaning that customers will always be liable for at least 18.75 hours over the course of a year, regardless of how they pay for membership.

Another new option is the Frequent Traveller package, which is designed for customers who intend to make multiple flights but who do not want the commitment of Jet Membership.

Frequent Traveller clients pay a minimum deposit of U25,000 in Europe or $35,000 in the other regions and the deposit counts against occupied hours flown during a three-year period. Customers progressively increase their deposit to cover additional hours (which are charged at a higher rate than under Jet Membership).

As with these block-charter offerings, Skyjet’s ad hoc pricing gives improved rates for same-day round trips and for “by the day” bookings with a minimum of two occupied hours flown each day on itineraries of two or more days. Jet Membership clients get an additional price break (2.5 percent) if they commit to 50 or more hours. In Europe rates are set in euros, but the U.S. dollar is used for all other regions.

Customers from one region can use flights to or within another region at the prevailing rates that apply in that region. Bombardier Skyjet International managing director Judith Moreton told AIN that the program will always offer clients the most advantageous rate, based on whether it is more cost-effective to use a local aircraft or retain one flown in from another region.

Another consideration is whether it makes better sense to pay for a flight on an ad hoc basis, rather than use Jet Membership hours. For both Jet Membership and Frequent Traveller clients this will take into account the differences in the block charter rates in the region in which they joined the program and those that apply where they are going to use them.

A Skyjet spokeswoman said the program’s regional fixed rates are more transparent than the complex interchange ratios that apply to intercontinental fractional ownership services.

Comparing flights of an approximate three-hour duration using a Learjet 60 shows the following differences between the Skyjet regions: Frankfurt to Moscow (Europe–U21,279, $27,662 at current exchange rates); Dubai to Delhi (Middle East–$24,140); Tokyo to Beijing (Asia-Pacific– $10,800–not including any positioning costs); and Dallas to New York (North America–$18,390).

For the block-charter packages, Skyjet International guarantees aircraft availability with different notice periods for the four regions it serves. In the U.S. the guarantee takes effect with 12 hours’ notice. In Europe the flight needs to be requested by 4 p.m. Central European Time on the day before departure and in the Middle East trips need to be booked by noon Greenwich Mean Time on the day before departure. Asia-Pacific services are offered on a strictly “as available basis,” as are Skyjet’s ad hoc charters in other regions of the world.

Bombardier will continue to offer its fixed-rate Transatlantic Express service under the Skyjet mantle. Customers pay a flat fee of U150,000 ($190,000) to fly up to 10 passengers round-trip across the Atlantic in either a Global Express or a Challenger 604. This rate covers nine hours’ flying time (each direction), allowing flights to and from almost anywhere in western Europe to cities along the U.S. eastern seaboard (and even some distance inland). Jet Membership clients get a reduced rate of U140,000 ($180,000).

The Canadian airframer concedes that its ultimate motive for its direct involvement in executive charter is to stimulate business aircraft sales. According to the company, the Flexjet Europe program played “an important role” in almost 40 percent of its new aircraft sales in Europe over the past 12 months.

Skyjet is intended to increase consumer exposure to the convenience and cost-effectiveness of business aviation and to generate charter bookings for existing and prospective Bombardier operators, who may therefore be driven to expand or upgrade their fleets.

Moreton insisted that the flexibility built into the overall Skyjet International offering is intended to make sure that flights can be offered to clients on the most attractive terms for a given travel requirement. “We have examined all the barriers to flexibility in the use of business aircraft and have tried to eliminate them.”

But other seasoned players in the executive charter market have argued that Skyjet’s claims to offer flexibility and value are overstated. Several leading charter brokers, including Air Partner and International Air Charter (IAC), have told AIN that they have been winning new business from clients who have become disillusioned with block charter arrangements such as Jet Membership and fractional ownership programs such as NetJets Europe.

Importantly, these charter brokers are free to book flights themselves with any Skyjet operating partners and they maintain that they can offer customers lower rates on the same Bombardier aircraft. For example, the Skyjet rate for a Learjet 60 in the Middle East comes to $8,250 per occupied hour (for a one-way flight by a Jet Membership client with 25 hours).

IAC managing director Hugh Courtenay claimed that his Dubai office can offer the same aircraft from the same operator for a basic rate of $3,500 per hour, although this is on the basis of the customer paying for any positioning flights as well as occupied hours and does not include all associated charges.

AIN priced aircraft available for charter in the Middle East using the Air Charter Guide Web site (www.aircharterguide.com), which showed prices for ExecuJet Aviation’s Learjet 60 at between $4,000 and $4,100 per hour (on an all-hours basis, as opposed to occupied hours only) and rates for the same operator’s Global Express at $7,500 (compared with the Skyjet occupied hours rate of $12,600).

Skyjet contends that ad hoc charter brokers can offer a seemingly more competitive hourly rate on the basis of a hypothetical trip but may not be able to deliver that rate for any given trip requirement. It maintained that its clients often need to fly from airports that are not well served by nearby charter operators so positioning costs quickly inflate the bill.

“Our tailored selling approach means that each customer has an in-depth analysis of his or her flying requirements and will always get an honest estimate from us right from the beginning based on their personal profile,” a spokeswoman told AIN. “In addition, our guaranteed aircraft operating and service standards with guaranteed availability make us an attractive provider for volume users who do not want to shop around every time they book a flight.”

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