Former NetJets Europe executive Chris Moody claims he has helped to bring liquidity back into the market for fractional shares in business aircraft by offering a way to buy and sell shares without incurring what he regards as the prohibitive fees associated with fractional ownership contracts.
Pre-owned business jet prices are down 40 percent from the heights of 2008 and are now on average 15 percent below “market value,” Aircraft Post president
Cessna Aircraft yesterday completed its acquisition of business aviation flight services provider CitationAir. With the move, CitationAir becomes a wholly owned subsidiary of Cessna but maintains its separate operation. The original company–called CitationShares until the name was changed this past October–was started in 2000 as a 50-50 joint venture between Cessna and TAG Aviation Holding.
Data on the U.S. fractional share industry show that last year was extremely challenging for the big four fractional operators–NetJets, Flexjet, Flight Options and CitationAir–and for smaller but healthier Avantair.
Data released yesterday by aviation specialized services firm Argus indicates that business aircraft flight activity last month increased 5.3 percent from year-ago levels. However, January numbers were down slightly–2.8 percent–from December, and the year-over-year increase fell short of analysts’ predictions of double-digit flight activity gains during the first half of this year.
Since Sentient Jet was purchased by Macquarie Global Opportunities Partners last September, the company has returned to its roots, according to CEO Steven Hankin. Business is down, he concedes, but the slumping economy has forced business travelers to avoid owning capital assets–and therefore moved them toward purchasing jet cards.
Fractional ownership of private aircraft seems to be a struggling business model in North America and Europe but it’s alive and well in this part of the world, according to NetJets Middle East (NJME). The company, which is owned by Saudi Arabia’s National Air Service and is affiliated to U.S.-based NetJets Inc.
Revenues at NetJets, Berkshire Hathaway’s fractional jet share company, dropped $471 million (41 percent) in the third quarter of 2009 and $1.495 billion (42 percent) for the first nine months of 2009, compared with 2008 results, according to the parent company’s November 6 quarterly report. The decline in revenues stems from a 79-percent drop in aircraft sales, according to the report, and a 24-percent reduction in flight revenue hours.
Responding to the brave new world of recession-shaped business aviation, CitationShares last month in New York City unveiled a rebranding that sees the company change its name to CitationAir by Cessna and promote the scope of its offerings beyond the fractional operation it has been since its founding in 2000 as a joint venture between Cessna and Geneva-based Tag Aviation when the two companies bought Wayfarer Starshares (founded in 1998 and
Flexjet, Bombardier Aerospace’s fractional-share program, announced a reconfigured product offering at NBAA, with an emphasis on its ability to offer supplemental lift and other aviation solutions to corporate flight departments.