Bombardier overhauls Flexjet Europe program

 - March 25, 2008, 8:53 AM

Bombardier has relaunched its Flexjet Europe business aircraft shared-use program under the name Jet Membership. The new program, which was unveiled February 12 in London, will use an all-Bombardier fleet of some 40 aircraft operated by 10 approved executive charter operators around Europe and will offer hourly rates that are 10 percent lower than the original Flexjet Europe concept. It has also scrapped the requirement for customers to make a down payment on the value of the hours they purchase and to pay monthly management fees on top of occupied-hour charges.

The existing Bombardier-owned fleet of Flexjet Europe aircraft based at Copenhagen, Denmark, and operated by Execujet Scandinavia will be disbanded next month. This will immediately be replaced by a 30-strong fleet operated by an initial eight approved operators. The manufacturer intends to appoint two more operators within the next couple of months to increase the program’s overall fleet to 40 aircraft.
Learjet 31As, 45s and 60s and Challenger 604s will be available to Jet Partnership members. Additionally, members will also be able to book ad-hoc charters on larger Global Express and Challenger Special Edition (a corporate shuttle version of the Canadair Regional Jet) aircraft.

Jet Membership is available under two options: premiere and same-day business. Premiere is for customers who travel frequently and require a high degree of flexibility. Same-day business is for those who tend to return to their departure airport on the same day or before 10 a.m. the next day.

Under the premiere option, the flight-hour prices are e4,700 ($4,100) for the Learjet 31A, E5,600 ($4,900) for the Learjet 45, E6,500 ($5,700) for the Learjet 60 and E9,900 ($8,700) for the Challenger 604. With the same-day business option, the hourly prices are around 20 percent less–E3,750 ($3,300), E4,550 ($4,000), E5,200 ($4,600) and E7,950 ($7,000), respectively.

Bombardier’s London-based sales team is offering Jet Membership with an initial minimum commitment of 50 flight hr, with additional 25-hr blocks available thereafter. However, Flexjet Europe commercial director Daniel Maiden indicated that he will allow new customers to start with just 25 hr. After an initial 12-month contract, clients can leave the program with three months’ notice, with hours being paid for on a quarterly basis in advance.

Aircraft positioning costs are included in the flight-hour charges under the premiere option, provided the trip is within Flexjet’s “European service area,” which spans all of western Europe, the western half of the Czech Republic (including Prague) and the southern halves (below 61 deg north) of Norway and Sweden.

For the same-day business option, positioning costs are included if the aircraft returns to the departing airport on the same day or before 10 a.m. on the day after departure. Trips outside the service area incur positioning costs.

Bombardier has also revised the minimum notice period policy for Jet Membership. The standard prices require clients to book a trip before 4 p.m. Central European Time two days before the departure date. For a 5-percent premium, the operators will guarantee aircraft availability for flights booked before 4 p.m. the day before departure. Subject to availability, flights can be arranged after 4 p.m. the day before departure with a 10-percent surcharge.

Maiden told AIN that Bombardier had opted to extend the standard minimum notice period because the majority of Flexjet members have been giving at least that much notice before trips. Some of these customers had complained that they were essentially subsidizing the minority of program members who required even shorter notice periods.

Under Jet Membership, an operator will guarantee departure time flexibility of up to 90 min, provided the client has given 90-min notice of being late. Flights need to be canceled by 4 p.m. on the day before departure or a surcharge can apply.

Jet Membership clients can switch between different Bombardier aircraft types and can also use the North American Flexjet program and the new Flexjet Asia service, subject to a sliding scale of interchange fees.

The initial roster of eight charter operators chosen for Jet Membership are Aero-Dienst in Nuremburg, Germany; Avcon Air Charter and TAG Aviation in Zurich, Switzerland; Corporate Jets in Dublin, Ireland; DaimlerChrysler Aviation in Stuttgart, Germany; Gold Air International in London; Execujet Scandinavia in Copenhagen, Denmark; and Jet Connection in Frankfurt, Germany. These operators offer a mix of Learjets and Challengers, with an average age of less than two years. Avcon and DaimlerChrysler also provide the Global Express for ad-hoc charters.

Bombardier is currently in talks with other operators in Italy (including Eurojet in Milan), Portugal, the UK and Germany, with a view to appointing two more providers to the program. The shortage of commercially licensed Bombardier operators in France currently makes that country something of a black hole for the Jet Membership program. However, the Canadian manufacturer now intends to turn this drawback into a marketing advantage by offering to guarantee French operators 300 hr of work each year if they buy Bombardier aircraft. It makes no secret of its desire to use Jet Membership, and Flexjet generally, as a tool for boosting aircraft sales.

Flexjet Europe’s new managing director, James Hoblyn, said that Bombardier is eager to add the new Continental and Global 5000 to the Jet Membership program. He argued that the Continental, with its eight-passenger 3,100-nm range, is ideally suited to the European market.

At press time independent auditors contracted by Bombardier had completed quality and safety checks on half of the initial eight Jet Membership operators. In addition to being regulated to Europe’s JAR OPS 1 commercial operating standards, the companies must operate aircraft that are less than five years old; have those aircraft maintained by Flexjet-approved service centers; and employ English-speaking flight crews who take annual simulator recurrency training.

The auditors follow up with annual checks, and quarterly service level reports are submitted to Flexjet management. Operators can be excluded from the program if they fail to meet service standards, especially on flexibility.

Maiden said that the Jet Membership aircraft will have similar but not identical interiors and exteriors. In his view, the benefit of using new aircraft selected by European operators was that they reflect European corporate completion tastes rather than those of corporate America (generally lighter colors vs dark blue).

According to Hoblyn, Flexjet’s 24/7 London-based schedulers will be free to select whatever operator can most efficiently meet the needs of the client on any given day. Bombardier’s Skyjet software will be used to manage aircraft availability. No consideration will be given to the share of flights assigned to the various operators.
Flexjet is also assembling a group of “second tier” Bombardier business aircraft operators to provide backup capacity in the event that no aircraft are available from the core operators. The additional operators will be audited to exactly the same standards. Only in rare instances does Flexjet expect to have to charter other manufacturers’ aircraft to meet capacity requirements.

According to Maiden, Flexjet Europe’s existing clients have been happily transitioning to the new Jet Membership structure and have in some cases increased their number of contracted flight hours or have moved up to a larger aircraft. However, at least one wealthy individual, his asset value seriously weakened in post-September 11 trading conditions, has been obliged to reduce his number of annual flight hours.
Last year, Flexjet Europe’s fleet of 10 aircraft flew more than 5,000 hr. With Jet Membership in place, this is expected to increase to up to 9,000 hr this year and to 10,000 hr next year.

According to Hoblyn, Bombardier restructured Flexjet Europe after market research found that European businesses are still having a hard time justifying the level of commitment and capital outlay required by traditional fractional ownership and its derivative services. Previously, Flexjet Europe has required clients to commit to aircraft shares equating to 50, 100, 200 or 400 annual flight hours and to make a down payment of approximately 20 percent of the total value of these shares. On top of this, customers paid monthly management fees and occupied hour costs.
Executive Jet has started allowing other companies to remarket small packages of hours in its NetJets fractional program to attract clients unwilling to sign up for full-blown fractional ownership.