NBAA Convention News

United BizJet now Avolar, frax plans unchanged

 - June 11, 2008, 5:52 AM

Avolar, the “stand alone” UAL Corp. subsidiary created in April to launch a new business aviation venture, has declared that despite the September 11 terrorist attacks and their devastating impact on America’s aviation industry, “Our business plan is unchanged; however, Avolar is now seeking equity investors to share the burden of funding.” Avolar was originally created as United BizJet Holdings.

The plan includes the creation of a variety of business aviation programs, including fractional ownership, aircraft fleet management, on-demand charter entities, a corporate shuttle operation and establishment of “links between United [Airlines] mainline commercial service and business aviation products outside the United States.”

To date, the primary focus has been on the fractional-ownership program. At the Paris Air Show in June, Avolar president Stuart Oran announced an agreement with Dassault Aviation to acquire a mixed fleet of Falcon business jets totaling 100 aircraft. That agreement has since been converted to firm orders and options valued at some $2.5 billion. Avolar also placed a firm order with Gulfstream for a mix of 12 GIV-SPs and GVs and options for another 23 Gulfstream business jets. Oran said Avolar expected to have 20 aircraft in service by the end of next year.

While Avolar is a separate company, its funding comes from UAL Corp., the parent company of United Airlines, and in the days since the terrorist attacks in New York and Washington, D.C., UAL has announced it is cutting its flight schedule by 20 percent and its workforce by 20,000, and it is among those airlines asking the federal government for billions of dollars in relief funds.

Despite being described as a stand-alone company separate from United Airlines but under the UAL umbrella, Oran and others have in the past made it clear that Avolar expects to benefit from that association. It would draw heavily on the technology and experience of United Airlines “wherever applicable.”

While a spokesman told AIN the new company is committed to a presence at NBAA’s rescheduled show in December, he added, “we are revisiting our original plans.”

In April, when UAL announced its plans to launch a business aviation venture, some questioned the wisdom of this decision by a company that had just announced a first- quarter 2001 loss of $305 million, compared with first quarter 2000 earnings of $136 million.

Now Avolar is “reassessing” its plans for the NBAA show, rescheduled as a result of the terrorist attack. In light of the fiscal shock to the aviation industry that followed the terrorist attack last month, the question remains whether Avolar will also reassess its overall business plan.