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| Aerial Combat |
Turbulent Times
Michelle Seaton
08/01/06
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The problem these cards raised became
apparent when many jet card travelers tried to fly during the same peak business
hours and on the same holidays as fractional owners. According to industry
representatives, on some occasions, the fractional companies have had to pay a
premium to charter outside planes to fulfill customer expectations. Under these
circumstances, their fractional clients, who pay a premium for ownership, find
themselves flying chartered aircraft.
CitationShares stopped selling new jet
cards for a month in mid-2005 to protect its fractional owners from problems
related to overcrowding. “When we opened it back up again, we had a waiting list
for cards,” says Patrick Dunlavy, senior vice president of sales, marketing and
contracts. Dunlavy says that the company strictly monitors card sales. “It is
puzzling to us that other card programs seem willing to sell an unlimited number
of cards,” he says.
The problem is not confined to CitationShares. “We did
have a greater number of non-NetJet planes flying, maybe 5 to 10 percent last
year on very busy days,” says Ken Austin, a senior vice president at Marquis
Jet. Austin scoffs at the charge leveled by charter companies that Marquis Jet
needed to charter 25 percent of its flights last year. “Maybe once. Maybe on the
day before Thanksgiving it was 25 percent,” he says. “Yesterday? One-hundred
percent NetJets. Day before that? Maybe 99 percent.”
Still, Austin admits
that scheduling became such an issue that the company had difficulty picking up
owners on time last year. “You hate to move a person three hours if you don’t
have to, but we couldn’t go out and get a plane that was as good as a NetJets
plane, with the pilot with the right credentials, and do it on time,” Austin
admits. In fact, Bold says that the company has recently increased the number of
peak days on which it reserves the right to move customer departure times. Some
customers understood, he says, and some did not. The primary problem, according
to Austin, was the union dispute between NetJets and its pilots. He insists that
Marquis Jet has not needed to charter a significant number of aircraft since the
company settled the dispute.
One fractional company is dealing with the
inherent disparity between cardholders and owners by treating each group
differently. Cardholders in Flight Options’ JetPass program pay a premium rate
for booking during peak hours, while owners do not. This covers the company in
case it has to find chartered jets to cover its flights.
Other fractional
operators have rejected the whole concept of jet card programs. George
Antoniadis, CEO of Manchester, N.H.-based Alpha Flying is one. Antoniadis sells
fractional shares of a Pilatus PC-12, in a program called PlaneSense. In his
model, owners buy shares of this large-cabin, single-engine turboprop at a much
lower price than they would pay for a similar share in a light jet. The PC-12
may be slightly slower than a jet, but it is much quieter, more fuel-efficient
and every bit as roomy. The bonus is that owners do not have to share the fleet
with outsiders. “That’s why we don’t offer a card program,” Antoniadis says. “On
Friday afternoon, you’ll get 50 phone calls and the majority of those will be
from people who have made the smallest financial commitment to your program.”
PlaneSense may be merely a regional player, but unlike all the major players, it
is running in the black. “We’re making money,” says Antoniadis, who notes that
many of his owners are also owners in other fractional companies. “Business is
good.”
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