KATE SARSFIELD / LONDON
Potential image overhaul will reflect new ownership after takeover by Raytheon of world's second-largest fractional
Flight Options is rethinking its image and says it may rebrand to reflect its new ownership and culture as the world's second largest fractional ownership operator.
Takeover of the Cleveland, Ohio-based company by Raytheon is set for completion in the next few weeks. Flight Options chairman and chief executive John Nahill says that in March last year Raytheon Travel Air and Flight Options merged and Raytheon loaned the new company around $75 million. "The joint venture [which has retained the Flight Options name] was unable to raise the capital to repay the loan," he says, "so Raytheon is converting the value of the debt into equity. This will raise its stake in the fractional company to more than 70%."
Flight Options will operate independently of Raytheon. Nahill says: "With over 2,000 share owners and 200 aircraft, it is viewed as a nice steady business with predictable revenue streams."
He aims to strengthen its customer appeal. "We are looking at the overall Flight Options brand, talking to customers and marketing experts," he says. "It may be the right time, as part of the new investment, to treat it as a rebirth. The brand image of Flight Options must capture the company's energy, culture and overall character."
As part of the strategy, Flight Options is striving to lower operating costs. Nahill says although the company is efficient and lean, it must exploit its strengths to "drive operational efficiencies". Flight Options spends $130 million a year on maintenance and $100 million on fuel, for example. "There is a chance to develop strategic relationships and integrate with key suppliers. This should drive down costs for us and increase business for them."
Nahill says the Flight Options fleet, with nine models, is too broad: "We need to find a balance between what is easy to maintain and operate and what meets owners' needs."
Flight Options hopes to phase out the Cessna Citation SII and Beechcraft King Air fleets, although there has been resistance from the turboprop owners. The Citation X, CitationJet, BeechJet 400A and Hawker 800XP fleets continue to grow and Flight Options plans to purchase around 100 more aircraft.
Source: Flight International
