Flexjet Reports Strong Start To 2013
Bombardier’s Flexjet subsidiary reported a strong first quarter, led by growth in new buyers as well as higher levels of activity by existing fractional-share, jet card and lease customers. In the first quarter, new business was up 83 percent, fractional share sales up 108 percent and jet card sales up 48 percent over the same period last year. “Our flying is not only up with all the new sales,” said Flexjet president Deanna White, “but also our existing customers are ramping up their flying time. People are starting to open their wallets again.”
To handle the growth, Flexjet has rehired furloughed pilots and plans to continue ramping up to meet demand for the peak season beginning in November. “We haven’t exhausted our furlough list yet, so we’re bringing back pilots that we had previously furloughed,” White said. While flying usually dips as summer approaches, she said in late May that Flexjet hasn’t seen a slowdown yet. “As new business comes in the door, obviously that brings more flying to us,” she said, adding that Flexjet’s fleet will grow, too, with the new Learjet 70/75 joining later this year, as well as the new Challenger 350, which will be added to the Flexjet fleet next year.
“We’re going to have a mix of [350s and 300s] in the fleet,” she said. Flexjet has taken four new 300s in the past year. “We believe that having both is an option, because there’s a different price point for both. We’ve operated the Challenger 300 for 10 years and we have expertise in that. We’re excited for the 350 coming on board, and all of our new [Challenger] deliveries will also be 350s.”
All new jets in the Flexjet fleet will be equipped with Aircell’s Gogo Biz air-to-ground communications system. Previously, only the Challenger 300s and 604s/605s were Aircell-equipped.
New Aircraft In, Old Aircraft Out
Flexjet claims to have the youngest fleet in the fractional-share industry, so as newer airplanes are added, older ones need to be disposed of. “It’s an art and talent to transition the old aircraft out of the fleet and then bring on the new models,” White said. “We have a strict schedule [for] how long we keep them in. It’s going to happen over a five-year period.” Learjet 40s and 45s and Challenger 300s that are three to five years old will be transitioned out as contracts expire. “At one point we could have [Learjet] 40s/45s, 70s/75s, some 60s, some 85s, some [Challenger] 300s and 350s, all of them in play while we’re trying to transition to the final fleet plan.”
The fleet plan, however, doesn’t include ultra-long-range jets such as Bombardier’s Globals because Flexjet’s primary market is in North America. “All of our jets can fly internationally,” White said, “but it’s not a big piece of the business.” Flexjet sees customers flying on airlines to other countries then internally on business jets, and Flexjet serves these customers with partnerships. Flexjet and VistaJet, for example, signed an agreement in 2010 to provide seamless access for customers to fly on each company’s airplanes. White explained that eventually Flexjet could grow beyond those partnerships to operate to other countries. “Once we have that I could see introducing ultra-long-haul airplanes.”
Flexjet’s internal forecasts suggest he increase activity there will continue. “All indicators are looking very well,” White said. “People need to do business, there’s a lot of business happening and I think our products help folks achieve their objectives.” She added that the economic downturn caused travelers to shop around for business jet services, but now those buyers are returning to Flexjet, consolidating their business with one company. “That’s what’s driving a lot of our business,” she said.
Another positive factor for Flexjet is the variety of its product offerings, which include not only fractional shares but also whole aircraft management, leases, on-demand charter and jet cards (all charter trips are flown by Dallas-based charter operator Jet Solutions). “We have seen the market shift to less capital-intensive products,” White said, “to more products without long-term capital commitments, but we provide all the different solutions and we’re seeing good activity in both [fractional and charter] arenas.” One change that has made a difference in activity levels is that in 2011, Flexjet created a debit card model for jet cards. Instead of having to fly the purchased time within a specific calendar time and with specific airplanes, the new jet card can be used for any airplane type until the amount is used up. The new card can also be replenished at any time.
White joined Flexjet eight years ago and was appointed president last October. “There are a lot of great things going on,” she said. “We believe that consumers in this market understand this is a luxury product, and Flexjet wants to make sure that we’re providing the best value, aircraft and experience, and the most valuable business and pricing model to go along with that.”