GRAHAM WARWICK / WASHINGTON DC
Programme enables owners to pool unused hours as downturn batters fractional sector
Bombardier Flexjet is introducing new schemes to boost aircraft utilisation as the business aviation downturn takes its toll on the fractional ownership market. With 5-6% of annual aircraft hours going unused, the company has launched a programme enabling owners to exchange hours.
Under the Versatility Plus programme, owners can place up to 25% of their annual hours in a pool each year. Owners requiring more hours in a year can draw from the pool rather than borrowing from future years. Since the scheme was launched on 1 June, Flexjet says, 1,000h have been placed in the pool and 30-40% of those hours have been requested by other owners.
For each hour owners place in the pool they receive a credit against their fixed costs: the monthly management fee, plus the carrying cost of the capital tied up in their share. The credits offset their monthly fees, says Flexjet. An owner drawing an hour from the pool covers the cost of the credit and an administration fee, plus the occupied hourly charge for that aircraft type.
Flexjet says it is the first fractional to offer an exchange scheme. Previously, owners were allowed to go up to 125% of their allocated annual flying hours, but only by borrowing from future years, while any hours left unused at the end of the five-year agreement were lost. Flexjet cautions it cannot guarantee owners that hours placed in the pool will be drawn.
A second scheme to be introduced by Flexjet is Anytime Options, which allows new share buyers to add benefits as they gain experience with fractional ownership. These can include the ability to access a larger or smaller aircraft, or - if most flying is on short legs - to pay for actual flying time rather than occupied hours.
Such options are usually negotiated up front, says Flexjet, but the new scheme allows them to be added at any time during the five-year agreement.
Source: Flight International