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Aviation History
2001
2001 - 3152.PDF
ing up orders and options with Dassault (a mixture of Falcon 2000/EXs and 900s) and Gulfstream (GVs and GV-SPs), for 125 air craft as well as maintenance and support. "We are set to take the first six to eight aircraft in April and have 22 in operation by the end of next year. By 2006 we expect to be operating 200 business jets [from super- light to large cabin types]," says Oran. Oran says the subsidiary has benefited from its parent's dominant aircraft pur chasing position, not to mention its forte for fuel purchasing, marketing and opera tions. He is confident these factors, cou pled with the airline's "operational her itage" which spans 70 years, will position United Bizjet as a key player within the fractional ownership market. "We are older, more established and sophisticated operators than our competi tors, most of whom are manufacturers [Bombardier Flexjet, Raytheon Travel Air]," he boasts. "Although United Bizjet will operate under the same [shared ownership] concept as other programmes, we plan to offer a higher level of service and luxury than is already available." Fractional competition Existing operators, however, argue that new customers are more likely to join an established fractional operator, than approach an airline with little or no experi ence of the business aircraft market. United Bizjet faces stiff competition, notably from market leader Netjets, owned by Executive Jet. Richard Santulli, formerly owner of Executive Jet and now chief exec utive since its acquisition four years ago by Berkshire Hathaway, pioneered the con cept in 1986. Netjets now has programmes in the USA, Europe and the Middle East and, as of 1 September, operates a fleet of 377 busi ness jets, from the Cessna Citation Ultra to the Boeing BBJ. The programme also has 580 aircraft on order, including 124 Falcon 2000s, 68 GIV-SPs and 33 GVs. Kevin Russell, senior vice-president of Executive Jet, says: "Netjets created the concept of fractional ownership and we will continue to be one the major benefi ciaries. We are adding six to eight new air craft and 40 to 50 new owners a month and all aircraft being delivered next year are committed to owners." Russell cautions: "Only six out of 57 companies which have entered the frac tional ownership market in the last six years remain. The majority of these are subsidiaries of original equipment manu facturers [OEMs] which offer aircraft types sold by their parent." These remaining players have, nonethe less, established successful and profitable programmes in their own right and like Netjets, will be hard to imitate. Raytheon Travel Air operates a fleet of over 100 aircraft and has around 330 on order. Flight Options operates nearly 90 pre-owned business jets and has ordered 25 Fairchild Dornier Envoy 7s. Bom bardier's Flexjet, the second largest frac tional programme, operates a growing fleet of around 120 aircraft. The latter two companies are also seek ing to penetrate the European market. Flight Options, through its joint venture with UK operator Chauffair, essentially provides lift for US customers travelling on the Continent. Bombardier's Flexjet Europe, which was established on similar grounds with joint venture partner Execujet, has also signed "significant numbers" of Europe-based customers. Oran acknowledges the potential of the European market to United Bizjet, and the possibilities for expansion, perhaps United BizJet through its parent's Star Alliance partners, is set to take notably Lufthansa. He claims, however, delivery of its not to be examining any such move, say- first aircraft, a ing: "We must focus 100% of our efforts on Gulfstream the US programme." IV-SR in April United's decision to jump feet first into next year. the business aviation market has blurred Deliveries will the line between airline and business continue until aircraft travel and has been greeted 2006 with surprise and cautious optimism by the industry. Another level NBAA's Olcott says: "This is the ultimate validation of our community, signifying a bend in the road with a whole new set of signs which have never been read before." Vance of Vance and Engles agrees: "It has placed the industry on another level of sophistication and credibility and given OEMs a shot in the arm, increasing their order backlogs still further." The new venture has drawn its cynics who doubt that United, with such a pow erful airline heritage, can make a success of a business aircraft venture. Says one critic: "No matter how much it claims not be influenced by United Airlines, it is. United Bizjet is essentially an airline trying to do the job of a business aviation operator, but the two cultures are very different." Olcott also sounds a cautionary note: "Business aviation is a unique activity. To what extent is any airline able to handle it as a separate entity? Furthermore, what are the consequences for our industry when these airlines [with established busi ness aircraft fleets and order backlogs] decide to pull out?" Conversely, as the demand for business aircraft increases - as is widely predicted - the allure of this booming aerospace sector might prove too irresistible for new airline entrants to resist. • 52 11-17 SEPTEMBER 2001 FLIGHT INTERNATIONAL www.fliqhtinternational.com
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