The recession has dealt an enormous blow to the fractional share industry. Rapidly declining used-aircraft prices and fewer flying hours have affected the industry to the point that most fractional operators have shrunk during the past year, deferred new aircraft deliveries, cut staffing and explored new ways to keep flying. Business has been so bad at the fractionals that some pundits are questioning whether the business model is broken.
Before new fractional company Jet Republic declared insolvency late last month, lawyers for the firm were seeking to lift a legal injunction secured by established provider NetJets Europe that prevented it from hiring NetJets employees. A court in Portugal granted the injunction in July 2008, before Jet Republic was officially launched.
In a major management shake-up at fractional provider NetJets, company founder, chairman and CEO Richard Santulli on August 4 unexpectedly resigned, effective immediately. Credited as the “father of the fractional aircraft industry,” Santulli said he plans to remain with NetJets as a consultant for at least a year.
Fractional aircraft provider NetJets’ second-quarter revenues fell 43 percent year-over-year to $550 million, and for the first half dropped $1.024 billion–or 42 percent–from the same six-month period last year.
Britain’s newest FBO, Marshall Business Aviation Centre, has been open for almost five months and is already fulfilling its owner’s hopes of drawing more traffic to Cambridge. The £5 million facility combines a new executive terminal with two adjoining hangars providing more than 50,000 sq ft of space for aircraft maintenance.
Fractional provider NetJets Europe launched the “Summer Card” for Middle Eastern customers who are planning to spend their vacations in Europe this summer. The jet card is valid from May until the end of October and is touted as providing “the flexibility and convenience required by Middle Eastern customers who visit numerous cities around Europe during their annual summer break.” The cards are available in 12.5-hour increments.
The new Marshall Business Aviation Centre at Cambridge, UK, was officially opened on December 4. The £5 million facility combines a new executive terminal with two adjoining hangars that provide more than 50,000 sq feet of space for aircraft maintenance.
Against a backdrop of tumbling stock markets and the most serious banking crisis in a century, Jet Republic has launched what it bills as the most direct challenge yet to NetJets’ dominance of the European fractional ownership market. The company has committed to buying as many as 110 Bombardier Learjet 60XRs. The first 25 of these are under firm order, with deliveries due to begin next October, at a rate of about one each month.
Gulfstream Aerospace (Booth No. 275) last month delivered the 200th large-cabin, mid-range G200. As of June 30 the in-service fleet had accrued nearly 320,000 flight hours and completed more than 200,000 takeoffs and landings since the model’s entry into service eight years ago. In addition, the large-cabin, long-range G450 and large-cabin, mid-range G350 fleets recently surpassed 100,000 flight hours each.
Between mid-June and mid-September, Hawker Beechcraft delivered three super-midsize Model 4000 twinjets, and more are on the way. Last month the company had more than 30 airplanes in the production pipeline, and throughout the last three years fleet orders for the $20.8 million composite-fuselage/metal wing airplane have accelerated as full certification neared.