CitationShares launched a program–Citelines–that it says offers “payment predictability, customized program options and cost savings never before seen in the industry.” Under Citelines, owners can choose to fly 365 days, 350 days, 335 days or 320 days a year.
One year after CitationShares introduced its Vector jet card, the fractional provider has curtailed sales so as “not to exceed the capacity to fulfill” charter and owner flights. “We have reached the capacity we targeted way earlier than expected,” according to CitationShares president and CEO Steve O’Neill. “We expected a renewal rate of about 35 percent, but about 75 percent of cardholders are renewing.
While the major fractionals–with the exception of CitationShares–experienced flat or negative growth, smaller providers have really climbed strongly. Over the past year, the 16 minor players that AvData tracks have–at the expense of the major fractionals–increased their combined market share (measured by shares sold) from 3.6 percent to 5.6 percent, mostly due to gains at Fairfield, N.J.-based Avantair and Manchester, N.H.-based PlaneSense.
All of the major providers have jet-card programs: NetJets has Marquis, Flight Options has JetPass, CitationShares has Vector and Flexjet has Premier Fleet. It should be noted that the Marquis program is unique among the card programs because it is run by an outside party that buys shares in NetJets aircraft and resells blocks of time in them. The other three fractional providers administer their respective jet-card programs themselves.
Although it is approaching its 20th birthday, the fractional aircraft industry is still very much mired in adolescence. It’s come a long way since NetJets chairman Richard Santulli invented the concept of fractional ownership and launched his program in 1986, but the industry still has a long uphill road ahead.
Textron’s second-quarter revenues of $3.2 billion were up 26 percent from last year, driven primarily by double-digit gains at Bell and Cessna. Bell segment revenues increased $199 million and profit was up $12 million due to higher V-22 Osprey revenue. At Cessna, revenues grew by $410 million, to $910 million, due to higher Citation, single-engine, Caravan and pre-owned aircraft deliveries, as well as the consolidation of CitationShares.
Fractional provider CitationShares recently announced three new programs for its customers. Preferred Positioning lets customers book and purchase–at a steep discount–positioning (deadhead) flights on fractional aircraft. Caribbean Express enables CitationShares’ fractional owners to travel to the Caribbean and Costa Rica without incurring repositioning fees on Saturday trips that fall within designated four-hour windows.
While its larger competitor NetJets saw profits vanish last year, fractional ownership operator Flexjet is reporting “our best year yet in terms of revenue and profitability.”
Twenty years after its birth, the fractional concept is finally a mainstream part of the business aviation industry. It didn’t start out that way, and one need only look at the current chorus of very light jet air-limo naysayers to get an idea of how the business aviation community reacted to fractional aircraft ownership in 1986.
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