Block charter has evolved as the primary alternative to fractional ownership in Europe, with providers continuously vying to offer greater flexibility and value. Operators and brokers are now competing to find new incentives to influence customers to abandon airlines in favor of charter services.
Just last month, France’s Aviaxess introduced its Aviacard as a frequent flyer program to reward clients who use its helicopter fleet (for which it offers block charter rates) or who book fixed-wing charters through its flight brokering division. Customers are rewarded for their loyalty with complimentary hotel accommodation, invitations to movie previews, valet services and Breitling watches.
At the end of January, Bombardier (Booth No. 7500) revamped its Skyjet International block charter program, unveiling its Jet Member card at the Middle East Business Aviation exhibition in Dubai. The company claims the new terms and conditions make the program the most flexible block charter plan in the market today.
The main change is that Skyjet has introduced fixed prices for every route flown, so customers pay no surcharges for fuel costs or holding times at busy airports. For same-day round-trip journeys, members will get a 20-percent discount on the fixed prices.
Customers can now also buy any number of flight hours for the Jet Member card, with no minimum required. Those who purchase 25 or more hours will start earning perks such as free upgrades to larger aircraft and discounts on luxury goods and services (for example, accommodation at Hong Kong’s exclusive Shangri La Hotel).
Significantly, explained Skyjet International managing director Judith Moreton, Jet Member card holders can exert more control over what they pay by negotiating customized options that match their personal requirements and preferences. For example, they can build-in flexibility in terms of which aircraft types will be available to them and how much notice they want to be able to give to ensure flight availability, as well as specifying choices for in-flight catering and ground-handling arrangements. Essentially, this means Skyjet customers don’t have to pay for options that are not important to them and can focus on specifying those features of the block charter program that fit their needs most closely.
“They can change these options at any time and the rate clients pay will be adjusted,” said Moreton. Skyjet has introduced the Jet Member card after conducting extensive customer feedback. Clients can opt to have their hours run over contracts ranging from one to three years.
According to Bombardier, the Skyjet partner operators logged more than 10,000 flight hours during 2006 (up from some 4,000 hours in 2003). It also claimed that last year it saw a 97-percent customer retention rate, with card holders extending their block hours. Existing Skyjet customers can switch to the new Jet Member program or can opt to stay with their existing terms and conditions.
The Skyjet charter fleet includes some 930 aircraft from Bombardier’s Learjet, Challenger and Global families, flown by partner operators spread across North America, Europe, the Middle East and Asia. Skyjet manages flights from its operations centers in London, Dubai, Hong Kong and Dallas.
According to Jahid Fazal-Karim, senior vice president of sales with Bombardier Business Aircraft, Skyjet is making an enormous difference in generating sales of the Canadian airframer’s jets. In his view, not only are new customers being introduced to the benefits of business aircraft use, but both new and existing operators are being given a strong incentive to increase their fleets.
Last year leading charter broker Air Partner International (Booth No. 145) relaunched and expanded its Jet Membership block charter program under the name JetCard. The UK-based group guarantees access to a “virtual fleet” of business jets operated by approved charter firms.
Air Partner is directly targeting former and prospective clients of fractional ownership giant NetJets. According to JetCard managing director Jonathan Breeze, the charter program will be both more flexible and more transparent. There are no fuel surcharges or supplementary fees for using certain airports, and customers will be refunded fully for unused hours at any time for any reason. JetCard rates will be reviewed at six-month intervals.
More Options for Customers
JetCard offers fixed pricing for flights within three service areas: Europe (including Scandinavia, Finland and most of eastern Europe), the continental U.S. (also including a 230-mile radius extending into southern Canada and northern Mexico) and Mexico and the Caribbean. These rates also apply for flights between the European service area and the Russian cities of Moscow and St. Petersburg, as well as the Ukrainian capital Kiev and Tel Aviv in Israel. Ferry charges apply for flights that begin or end outside these service areas.
The program offers four groups of aircraft: light, midsize, large and global (see box). These cabin classes are billed as having seating capacity for six, seven, 10 and 14 passengers, respectively, and are priced at fixed hourly rates ranging from €4,920 to €17,040 ($6,540 to $22,660). For round trips, customers get a 15-percent discount on the hourly rates.
JetCard blocks start at 25 flight hours, and there is no limit to the number of additional hours that can be bought. And the hours never expire. During busy periods, Air Partner prepurchases charter hours from its selected operators to ensure aircraft availability, which is assured with 24 hours’ notice. In the event that an aircraft from a client’s group is not available, an upgrade will be provided at the same rate.
Customers may switch between different classes of aircraft, with the hourly rates adjusted according to interchange ratios. For example, a light jet customer in Europe would be charged for 1.6 times the standard hourly rate to upgrade to a midsize aircraft. Minimum block time is one hour, with it being calculated as actual flight time plus six minutes at either end of the flight for taxiing on departure and arrival.
Breeze said the JetCard is intended to give clients as much flexibility as possible and not to trap them in binding and confusing contracts. He claimed that increasing numbers of NetJets owners are finding they prefer to use the charter aircraft the fractional provider books for them when NetJets fleet aircraft are not available. He said some owners are deliberately waiting until as late as possible to book flights to increase their chances of being flown on a charter aircraft. In his view, many charter aircraft are looked after very carefully on behalf of their private owners, whereas the NetJets aircraft work harder and are generally parked outside and away from their base.
New Experience Arrives
Another new market entrant last year was small-scale fractional ownership provider European Business Jets (EBJ), which introduced the Experience Card as a block charter option that allowed new customers to sample private aircraft by buying just five flight hours for £14,750 ($28,000). The company subsequently relaunched the program as the EBJ JetCard–a move that surely invites confusion with the existing Air Partner offering. The EBJ JetCard is priced at £2,950 ($5,600) per flight hour.
UK-based EBJ also sells one-sixteenth shares in the pre-owned Cessna Citation CJ1s for $260,000, allowing 37.5 occupied flight hours per year. In addition, owners pay £2,700 ($5,150) in monthly management fees and £1,300 ($2,500) for each occupied flight hour.
Customers are guaranteed use of an aircraft with just 12 hours’ notice and EBJ allows a minimum flight time of just 30 minutes. According to CEO Graeme Deary, this policy has proved popular with people who need to make short flights between regional locations that are not easy to reach by scheduled airline service. Like Breeze at JetCard, Deary is a former sales manager with NetJets Europe.
EBJ’s fractional agreements run for five years, with the company committing to buy back aircraft shares at any time for “fair market value.” If customers leave the program before 18 months, they have to pay the remaining monthly management fees for the rest of the agreement. Over the five-year term, EBJ guarantees that the management fees and occupied hourly rates will not increase by more than the OECD cost-of-living index.
Finally, Belgium-based Flying Group (Booth No. 136) has started offering block charter through its new FlyingCard program. Clients can buy between 15 and 100 hours at prices that are fixed for 12 months. They are guaranteed access to the operator’s fleet of CitationJets, CJ3s and Bravos with 24 hours’ notice and do not pay for positioning flights.