Factory-supported pricing

 - May 19, 2008, 4:58 AM

Flight Options’ foundation since its launch in October 1998 has been the tenet that a fractional share in a pre-owned jet makes better financial sense than one in a new jet, and it is a notion some 750 owners have embraced in the past 3.5 years. Now, however, Flight Options’ marketing people are tasked with convincing potential buyers that the Cleveland-based operator is also the best place to buy a share in a new airplane.

Enter “Factory-supported Pricing” (FSP), a program that Flight Options CEO Kenn Ricci says reflects “the real cost of operating a new airplane–taking into consideration the aircraft’s factory warranty for the airframe, engines and avionics. Newer aircraft are less expensive to maintain, and [FSP] is simply an honest way to price a fractional program that uses new aircraft.”

Flight Options claims a 24-percent advantage over NetJets in the first-year hourly operating cost for a new Hawker 800XP–$1,390 vs $1,828. “If you’re purchasing a new airplane, we believe you shouldn’t have to pay the same price in year one as you would in year five,” according to Flight Options marketing v-p Rich Heckman. “[FSP] is structured to fit the age and warranty status of the airplane.” After five years owners are given the choice of trading in their share toward a new aircraft or keeping their share in what will then be a pre-owned Hawker 800XP with an increased hourly operating cost of $1,850.

Ricci asserts that Flight Options is the first fractional program to quantify the age intangible. “Until now, all fractional providers have charged the same for aircraft in their programs, regardless of age. Traditionally, fractional owners have been paying a price for a ‘new’ aircraft but are then flown in aircraft that are seven or eight years old. [FSP] ensures owners will never fly in an aircraft more than five years old.” The current average age of aircraft in the FSP program is 2.2 years, said Ricci.