Bombardier expands its Europen charter service
The Transatlantic Express fixed-price charter service Bombardier introduced this summer has taken off, with round-trip flights booked between Europe and the U.S. at least once a week. In fact, the manufacturer is so encouraged by demand for the service that it is considering plans to expand it beyond the East Coast of the U.S. The service currently provides access to some 700 airports in Europe and the Eastern U.S. According to Judith Moreton, managing director of Bombardier Flexjet Europe, the company expects to announce the new services next year.
Under the Transatlantic Express program, customers pay a flat fee of €150,000 ($190,000) to fly as many as 10 passengers round-trip across the Atlantic in either a Bombardier Global Express or a Challenger 604. This rate covers nine hours’ flying time (in 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).
According to Bombardier, the Transatlantic Express flights generally carry approximately four passengers and on this basis each round-trip fare is €37,500. Customers are apparently not seeking to benchmark the service directly against first-class airline tickets (which currently cost around €7,000 per head on typical transatlantic services), but are placing more value on being able to specify flight times, use less crowded airports and have the highest possible levels of comfort on board the aircraft.
A significant number of Transatlantic Express bookings and inquiries have come from former customers of the scheduled Concorde services linking London and Paris with New York and Washington, D.C. Although the Global Express’s Mach 0.89 max cruise speed is a good deal slower than Concorde’s Mach 2.0 pace, the time savings from using more convenient local airports can cancel much of this differential.
Operators from Bombardier’s Flexjet Europe block charter program fly the Transatlantic Express services, with Zurich-based ExecuJet Europe and Germany’s DaimlerChrysler Aviation operating most of the flights. The Flexjet Europe fleet currently includes 10 Global Expresses and 14 Challenger 604s.
Bombardier guarantees availability for Transatlantic Express flights with a minimum of two days notice. The flat-fee prices apply to round-trip journeys with up to two nights away from the departure point. They also include limousine rides to and from airports, full meal and beverage service and the use of VIP lounges.
Business Aviation A la Carte
Transatlantic Express is the latest addition to Bombardier’s menu of business aviation service offerings. Having quickly abandoned an early experiment with fractional ownership in Europe, the Canadian airframer has sought to offer a wide array of charter options under its Flexjet and Skyjet brands. It insists that these programs offer users a higher degree of financial and operational flexibility for a smaller commitment than the rival NetJets Europe fractional program.
One of the company’s overriding goals all along has been to find ways to bring new customers into business aviation, and, according to Moreton, the close synergy between her team and Bombardier’s European aircraft sales force (co-located as they are in offices close to London Heathrow Airport) is already paying clear dividends. She said this year has been the most successful year to date in terms of sales cross-fertilization between the whole-aircraft and block-charter departments.
The manufacturer-backed charter programs are also intended to generate demand for charter firms operating Bombardier aircraft in the hope of boosting sales in that market segment. The Flexjet Europe team includes a full-time “partner manager” whose job is to liaise closely with operators to ensure that the program works well for all concerned. The company endeavors to parcel out charter bookings evenly among the operators, being conscious of the inevitable competitive pressures between them.
“Three years ago we were mainly attracting wealthy individuals, but now there is about a 50/50 split with corporate customers,” she told AIN. In her view, European company managements and shareholders are now showing an increasingly positive attitude toward the use of business aircraft. In particular, they are more sophisticated in their appreciation of the increased employee productivity achieved by avoiding crowded hub airports that may be several hours from their headquarters and having an in-flight environment that is more conducive to work and confidential discussion. The Transatlantic Express service has proven especially popular for companies with operations in both the U.S. and Europe.
Flexjet Europe Jet Membership offers blocks of annual charter time in 25-hour increments at different occupied flight hour prices according to different trip profiles (one-way, same-day return, by-the-day or trips within the U.S.). The by-the-day trip profile offers reduced hourly rates for customers chartering an aircraft over a period of at least two days and with a minimum of two flight hours per day.
The program currently offers hours in four different Bombardier aircraft: the Learjets 31, 45 and 60 and the Challenger 604. In October, the manufacturer delivered its first super-midsize Challenger 300 to Europe. This airplane will be offered for charter through Jet Membership by Milan, Italy-based operator Sirio. The new Learjet 40 will soon be made available through the program by Germany’s Cirrus Aviation.
The Flexjet Europe fleet now consists of 62 Bombardier aircraft operated by a group of carefully audited operators. They are required to ensure minimum levels of crew experience and recurrent training, and carry specified amounts of insurance coverage.
The fleet has grown by more than 26 percent over the past 12 months. Since the start of this year the number of Jet Members has grown by around the same amount (although Bombardier does not disclose precise membership figures). Flexjet Europe operates about 85 percent of its flights one-way.
Members are free to switch between trip profiles and aircraft types, paying only the applicable rate in each case without penalties, and can also fly 25 percent more or fewer hours over the course of a year without penalty. Customers committing to 50 or more hours get a 2.5-percent discount on flight hour prices.
Aircraft availability is guaranteed if flight reservations are made before 4 p.m. (Central European Time) on the day before departure. If the aircraft requested is not available from the Flexjet Europe fleet, Bombardier will upgrade the customer to the next category of jet. Jet Membership clients pay a partial deposit on their flight hours, rather than the full charter amount. They then pay every two weeks for any flying done.
Due to inflated oil prices, fuel surcharges are currently being levied at the rate of €232 per hour for the Learjets and €464 for the Challengers. An additional €500 charge applies for flights in or out of six high-density airports where slots are harder to get and landing fees are higher. These airports are London Heathrow and London City, Frankfurt Main, Moscow Sheremetyevo, Paris Charles de Gaulle and Brussels National.
The service area for Jet Membership flights now covers the whole of Western Europe and just about all of Eastern Europe, as far south as Greece. Flights to and from the main Russian cities of Moscow and St. Petersburg are also available. Bombardier is now studying the case for further expanding the service area eastward, weighing the complex emerging market question as to whether demand should drive capacity or vice versa.
The Skyjet Europe program offers occupied-hour rates for ad hoc charters that cost about 10 percent more than the Jet Membership block charter charges. It is aimed at customers not yet ready to commit to multiple charter hours and who require flights beyond the Flexjet Europe service area. Between February and September this year, flight activity for Skyjet Europe has increased by 90 percent over the same period last year.
Meanwhile, Bombardier is running the Flexjet Asia program on essentially the same ad hoc terms as Skyjet. Bombardier’s aim is to build this into a block-charter program along the lines of Jet Membership in Europe. Due to the relatively limited amount of charter capacity, Bombardier charges fees on an all-hours basis but the aim is to move toward occupied-hours pricing as the market grows. Today, there are just nine aircraft in the Asian program.
According to Moreton, China is a major growth sector for executive charter–driven mainly by the transportation needs of foreign companies seeking to do business in this vast country. Increasing trade between Japan and China is also stimulating charter demand.
Moreton conceded that operating restrictions in both China and Japan continue to present obstacles to the growth of business aviation. Bombardier has been actively involved in diplomatic efforts to rectify issues such as airport access and the process for issuing landing and overflight permits.
“I am convinced that this market will be able to grow,” commented Moreton. “It will be unrecognizable five years from now.” Given the region’s geography, she predicted that much of the Asia/Pacific demand will be for Bombardier equipment that delivers more range, such as the Global Express and Challenger.
The Flexjet Europe organization in London oversees Flexjet Asia. However, the program also has its own Asian representatives who share the Bombardier sales office in Hong Kong.
Bombardier intends to expand gradually the borders of its fixed-price charter zones in Europe and Asia. It is also contemplating services, along the lines of Transatlantic Express, that would link these fixed-priced zones to make for truly global access to manufacturer-backed charter services.
Scheduled Airlines versus Block Charter: the Bottom Line
For companies trying to compare the costs of using European scheduled airline services and Flexjet Europe Jet Membership block charter, six seems to be the magic number. According to Bombardier, with six passengers on board, its charter services will undercut the “fully flexible” business class airline fares by a comfortable margin. The key difference here is that charter will invariably avoid the need for employees to incur hotel and meal charges for overnight stays dictated entirely by the limitations of airline schedules.
Bombardier provided AIN with the following two sets of travel itineraries out of London, listed in UK pounds (£). In both cases the group consists of six passengers who need to make the trip once a month to attend meetings beginning at 9 a.m. local time.
London to Girona, Spain
Since there are no commercial flights from London to Girona (the capital of the northern Catalunia region of northeastern Spain) the passengers would have to fly to Barcelona (40 miles away), arriving the previous evening. The total cost to the company over the course of a year would be £71,928.
By using a chartered jet to get straight into Girona, there is no need to arrive the evening before the meeting. Over the course of the same year, the total bill would be almost 8 percent less at £66,375.
London to Dijon, France
It is impossible to reach Dijon by scheduled service from London by 9 a.m. and to return the same day. This trip would therefore require two overnight stays. On this basis, the total cost for getting the six employees to the monthly meeting would be as much as £113,688.
The same journeys over the course of a year by jet charter would cost £66,375, almost half the airline figure.