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Aviation History
1997
1997 - 2414.PDF
CORPORATE AVIATION Jamie Martin, co-owner and marketing Netjets Europe, hired lawyers in every country but is there to promote business and economies director of UK corporte air charter broker in Europe to "...advise us on the laws and to around the world." Hunt and Palmer, believes that chartering is examine die fiscal legislation". Daniel Lutolf, Now tJiat Netjets has opened up in Europe, strong wirJiin Europe and is a more favourable chief operating officer of Netjets Europe, odier US programmes are beginning to evalu- form of business travel within the continent, claims diat it took the company a considerable ate the market. Bombardier/AMR Combs sees "The European market is different to the US time to define the legal framework to enable it a European programme as being a natural pro- market. There may be one or two occasions, to handle fractional ownership in die same way gression for its Flexjet. "It is one of die hottest when for tax purposes or for odier reasons, it is as its parent company does. "Europe has many areas, so we are keeping our options open," says justifiable to have fractional ownership, different countries with different legislations, Mike Rose. The company operates charter ser- However, I fail to see the advantage of it when and it has been imperative to find a structure vices in Europe dirough a recend joint venture you have so many advantages of using the flexi- that would permit us to have customers in the with Lufthansa Technik of Germany. Rose cites bility of the charter market," he says. Martin programme from all European countries," he two obstacles to operating a fractional-owner- claims that the executive charter market in says, adding that diere are fundamental differ- ship programme in Europe. Firstly, he believes Europe "...is essentially subsidised", saying diat ences between operating in Europe and the that some journeys would be too short, which several operations belong to individuals or com- USA. Customers do not get the same utilisation would pose problems for business travel. "It is panies. "who only their aircraft for a number of out of an aircraft in Europe. "In the USA they cosdy to arrange a flight for a 30min trip, and hours a year. They then charter out the spare can fly 24h a day, whereas in Europe, we have a compared with what you get paid, die return for capacity on die open market at an agreed rate, window between 6am and 11 pm." your efforts is not as great." and don't pass on die full costs of the aircraft. He also cites die difficulty of obtaining air- Secondly, he believes rliat Europe has a good They only require a contribution to dieir costs craft take-off and landing slots as a further infrastructure for travel. "There is a good rail to cover main elements of expenditure like obstacle. Lutolf and Ziegler are confident that system and some of the best commercial air maintenance and aircraft depreciation," he says, die situation is improving. "Before the diird- travel around," he says. Martin believes diat some people are drawn to stage liberalisation act [which came in to force fractional ownership for the status it provides, on 1 April] permitted full cabotage, we could GROWING MEMBERSHIP "There is some attraction in owning part of an only operate from one country to anodier, but Whedier Bombardier/AMR establishes a frac- executive jet just like diere is some attraction in not within the specific country," says Lutolf. tional-ownership programme in Europe, owning part of a race horse," he says. Ziegler is scadiing of die critics of fractional remains to be seen. What is clear, however, is ownership. "A year ago, diey said it will never diat the concept in Europe, aldiough in its EUROPEAN HURDLES • work in Europe. Now they see it is working, infancy, is beginning to grow. Membership at Alan Marler, director of operations at UK char- diey say diat it will never be quite as popular in the Corpavia Club is growing, and to meet ter broker Air London, owner of die ill-fated Europe as it is in the USA - mark my words, demand the company has ordered two more fractional-ownership programme Jet Network, fractional ownership is revolutionising die busi- Beech 400As, with options for a further ten. believes diat Europe is not ready for fractional ness-aviation industry in Europe," he says. The success of Netjets Europe can be summed ownership. "To operate fractional ownership Ziegler believes diat programmes which failed up by Ziegler. "Cross-feeding is working successfully needs a minimum of four aircraft, did not have die support of a large organisation, well... the response has been wonderful", and the skill is to minimise empty flying." "Fractional ownership is very cash intensive: Byyear-end, die programme will have six air- Marler concedes that when Jet Network was you have to have die finance to buy die die air- craft. When Santulli launched Netjets in established in 1995, mere were too many hur- craft to start die programme - no-one will ever Europe in 1996, he said: "We have come to dies involved. "We could always provide an air- invest in paper aeroplanes." Europe to say for as long as it is necessary, and to craft cheaper through chartering," he says. Ziegler admits that, compared widi die 5,000 do whatever it takes to make it successful." Marler believes diat die best time for fractional airports available for business aviation in die EJA and Bombardier/AMR are casting their ownership will be "die turn of the century". USA, Europe is a long way behind. He is critical nets further afield. EJA is holding discussion Hannes Ziegler, chief executive officer for of regulations which allow priority over busi- widi three Middle-Eastern partners and hopes Netjets Europe, admits diat problems existed ness flights. "We should allocate slots on a first- to launch a scheme in South-East Asia by die before the programme was established, but come, first-serve basis," he says. He feels diat end of die year. Bodi companies are also eyeing insists diat any setbacks have now been dealt diere is a need for a better relationship between up Latin America and a prospective area for widi. "It is simply a question of smart and pro- die airline industry and the business-aviation fractional ownership. According to Russell, fessional researching," he says. Ziegler, who industry in Europe. "The airlines must under- ".. .the biggest hurdle to implementing a pro- admits to investing a great deal of money in stand that business aviation is not a competitor, gramme is the availability of aircraft". • 66 FLIGHT INTERNATIONAL 17 - 23 September 1997
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