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Aviation History
2001
2001 - 3151.PDF
Corporate aviation Vance says the business waned in the early 1970s when Pan Am opted to use its annual charter allocation (2% of the air line's total scheduled miles for the previous year) to transport troops to Vietnam. He concedes: "It seemed more lucrative to shift troops in Boeing 747s for the Pentagon than to move passengers around in Falcon 20s." The death knell came later, says Vance, when Pan Am, also sole distrib utor for the Dassault Falcon 20, was suc cessfully sued for operating illegally as an arm of the aircraft manufacturer. More than 20 years on, the business avi ation market has become a highly prof itable and sought-after market, and not merely a minor sideline for the carriers, a fact which United Airlines is seeking to prove through its stand-alone venture United Bizjet. Luxury product "We are doing something that is hugely different to the other airlines," says United Bizjet president Stuart Oran. "BA has not spent a nickel setting up its business, while Virgin is [looking at] taking a commercial Virgin is aircraft and converting it into a uniform evaluating the luxury product." Oran admits United had Bombardier examined a similar business model to Global Virgin's but decided not to proceed. "It was Express for disrrfissed as an uneconomic use of slots." its planned "In recognition of our most important Jetset customers, we are making a meaningful programme $250 million investment in a brand new company which has nothing to do with scheduled airlines. We feel we can do a bet ter job if we can control the process and the product. This will also provide a more profitable return [on our investment]." United's foray into business aviation was spurred, Oran says, by nearly two years of costly yet revealing studies by research company Booz, Allen & Hamilton. "Our customers told us they were dissatisfied with airline travel and were looking for alternatives." United Bizjet eventually plans to pro vide three types of service, fractional own ership, corporate shuttle and charter, although its initial focus will be on frac tional ownership. This is arguably the fastest growing sector within commercial aviation. Oran says: "Of those surveyed who said they would be interested in becoming involved in fractional owner ship, 74% expressed a preference for a commercial airline-backed service. Also, one-third of those who said initially they were not interested in fractional ownership said they would reconsider if the operator was an airline." Such is the demand for fractionals, that despite the economic slowdown in the USA, United Bizjet is set to launch its dedi cated programme within the next few weeks, or possibly as early as next week's NBAA convention in New Orleans, and begin operations in the second quarter of next year. Oran enthuses: "The fractional ownership market is much larger than the existing pool of owners, we have barely scratched the surface." United Bizjet has already embarked on a multi-billion dollar spending spree clock- www.flightinternational.com FLIGHT INTERNATIONAL 11-17 SEPTEM BER 2001 51
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