Fractional ownership and charter operators enjoy growth as customers seek lower-cost access to business aviation

Two companies closely associated with fractional-ownership leader NetJets are experiencing growth as customers seek lower-cost access to business aviation. NetJets subsidiary Executive Jet Management (EJM) is expanding its aircraft management and charter business, while Marquis Jet Partners' scheme to remarket NetJets shares in smaller blocks is growing faster than expected.

EJM added 45 aircraft to its managed fleet last year, taking the total to over 100, and the Columbus, Ohio-based company plans to add 65 this year, says chief executive Albert Pod. The greatest growth was in large-cabin, long-range aircraft such as the Bombardier Challenger and Global Express and Gulfstream IV and V, "which reflects international charter activity", he says.

The company experienced growth in both its business areas of aircraft management and charter sales, Pod says. The growth in managed aircraft was largely through consolidation, with operators transferring their aircraft to EJM's Part 135 certificate, partly because of parent company NetJets' reputation for safety and reliability, he says. Across the industry, charter activity was down, but EJM grew 13% in dollar terms last year and "we are looking for growth in 2003", Pod says.

One factor attracting aircraft owners to EJM is NetJets' buying power. "With over 450 aircraft - 100 in the managed fleet and 350 in the fractional fleet - we pass our fuel, insurance and training discounts on to the owner," Pod says. He adds: "Safety and security are big factors, which the market is recognising."

Marquis says NetJets' reputation plays a key role in the success of its Private Jet Card programme, under which the New York-based company subleases its fractional shares in one-year, 25h blocks. The company has over 500 customers and the renewal rate is around 100%, says executive vice-president Ken Austin. Marquis is NetJets' biggest customer, he says.

Marquis has signed an exclusive agreement with the Ritz-Carlton Club to make NetJets aircraft available to members of its fractional home ownership scheme. The Ritz-Carlton has purchased a pool of aircraft hours for resale to members. The Gold programme provides 25h a year, but restricts buyers to flying to and from the four Club locations: Aspen and Bachelor Gulch, Colorado; Jupiter, Florida and St Thomas. The Platinum programme is unrestricted, and 25h costs $110,000-300,000 depending on aircraft type.

Source: Flight International