On Tuesday, fractional-share operator CitationShares laid off 41 office staff and furloughed 52 pilots, according to CEO Steve O’Neill, “to match both the flight activity with staffing levels as well as operating revenue with expenses.
Fractional aircraft providers have reshaped their marketing efforts to address the difficulty of trying to get customers to buy aircraft shares during a recession. To help stimulate growth, Flexjet has introduced a fly-away lease program, which lets buyers who might not want to make a capital purchase lease a fractional share and exit the lease at any time with 90 days’ notice and with no penalty.
As the recession tightens its grip on the economy, fractional aircraft providers have stepped up their marketing efforts not only to sell more shares but also to encourage shareowners to fly more. “In this tough economy, the pressures on all parts of the aviation business have been extreme,” said Bob Knebel, Flexjet v-p of sales.
as the economy lurches from bad to worse news, the aviation industry is holding its breath, waiting to see how this downturn will affect the business jet market and elements of that market such as the fractional share business.
Executive Jet Aviation owner and CEO Richard Santulli brought the fractional-ownership concept to the business aviation community in the mid-1980s. Santulli created a program called NetJets, selling aircraft in shares ranging from 1/16ths to halves.
The growth of fractional aircraft share sales has cooled recently, reflected by delayed and canceled orders for new aircraft by fractional providers (AIN, May, page 1). Another apparent reflection of the downturn is the sharp reduction in total pilot hiring by the major fractional providers.
When TAG Aviation took over Aeroleasing in Switzerland and Aviation Methods in California, and finally Wayfarer Aviation on the East Coast, all in 1998 and 1999, the aim was to set up an operation that would be active in all major markets.
JetLimited, the new fractional aircraft ownership program from Rifton Aviation, believes it sets itself apart from other regional and national frax programs in several ways, all intended to result in more personalized service to its target Northeast U.S. customers than other frax operations.
Cessna Aircraft racked up orders for 156 Citation CJ3s (of which 100 are for NetJets and 25 for CitationShares) in the two days following its launch on the opening day of last month’s NBAA Convention in Orlando, Fla. The new CJ3 is a stretched derivative of the hot-selling Citation CJ2–itself a stretched derivative of its popular CitationJet/CJ1.
Less than two weeks after Charlie Johnson replaced Russ Meyer to take over the leadership of Cessna Aircraft, the Wichita airframe manufacturer announced major reductions in production rates and workforce.