Are the fractionals recession proof?

[skyaddict]

Definitely alot more recession resistant than the airlines, hands down. But if the recession is long enough and deep enough it will take no prisoners at some point, and everything points to a longer and deeper one than "usual", certainly longer and deeper than the artificially shallow and short post tech bubble burst.

I don't envy Bernanke trying to walk this fine line- a major mis-step could melt us down to global depression at this point. Greenspan really screwed him- and us - all over with his bubble blowing legacy, this current mess was completely predictable- there never should have been a housing boom in the first place. I don't know what crack Greenspan was smoking.

I think the "best case" for the U.S. economy is a fairly decent recession followed by years of slow growth vs. the rest of the world ("worst case" being a global depression worse than 1929). But those companies expanding overseas will at least get the benefits from our growing overseas debtors.

 

[gunfyter]

Of course there is a negative impact. On profits. Profits will be reduced or disappear temporarilly until the recovery comes. It always does.

But I think Frac pilots will keep their jobs and this is the major concern of people in this business when considering what an economic downturn means.

I don't see any of the major Fracs folding up their tents... in a Recession.

The greatest threat is not a recession but repeal of the Tax-Cuts for the Rich.

 

[7777]

The greatest threat is not a recession but repeal of the Tax-Cuts for the Rich.

That is something I never figured into my thought process here. That is an excellent point and I wonder just how much of an effect that would have if the government starts sticking it to them. Very good point.

 

[netjetwife]

The fractional industry took off as a result of 9/11 and the hassle factor of airline flying. ....

For these reasons I think that the fracs are better positioned to weather an economic downturn than the airlines are. The security measures are here to stay, with accompanying inconveniences the frac owners aren't inclined to put up with and/or have no time for. The hassle factor has not improved and may even get worse as the airlines make cuts to offset rising fuel prices. Frac pilots see many examples of poor service their pax would never tolerate. On my husband's last flight home the flight was delayed because a FA wasn't available. He calls those hassles "job security". The same conditions that brought growth to the frac industry provide insight into why frac pilots are less likely to be furloughed than those in the airlines. It's also one of the reasons my husband isn't interested in returning to AA.

 

[Diesel]

Simple.... 5 year contract.

The barriers to exit are quite high.

Percentage wise you will lose a few and gain a few.

One thing is for certain. The airlines will furlough.

 

[gunfyter]

Thats right Diesel. 5 yrs.

By the time you make a decision to stop flying fractional... the economy has turned and HAPPY DAYS ARE HERE AGAIN.

 

[sqwkvfr]

I read somewhere a few years back that the number of millionaires actually increases shortly after an economic downturn.

The reason was that people being laid off go into business for themselves and find success.

Perhaps not recession proof, but I'd say that the fractionals are in the one of the best positions of any segment of aviation to survive an economic downturn.

 

[squonk]

Proof that we are in a recession...Tiger Woods trades down to a G200 from his G4...God, that's almost as bad as riding in the back of a CRJ. Tough life...

He's been on the 200 a couple of years now hasn't he?

 

[squonk]

Publishers alluded to it above, the Jet Card owners make a large percentage of the smaller jet fleets. This time last year was very busy, but it has been slow this year. I think any talk of recession and it may make a card owner think twice about that golf trip with the buds down to HXD.

I agree also that our Share owners will not be as affected by the whims of the economy. Our business in the months after 9/11 went roughly from 15 shares sold a month to over 30 a month.

I believe the Fractional model is set up well to ride out any storms.

 

[pilotyip]

Military not secure either

the majors.


I have a GREAT military flying job. The military pilot weathered the aftermath of 9-11 very well. Yeah we have been busier than a 1 legged man in an ass kicking contest since then, with the numerous deployments and all, but we have job security.

I had a great military flying job in 1975. Then Saigon fell, we downsized the military, pilots recruited and trained for the war suddenly found themselves riffed, moved to non-flying jobs, and non-promotable. Then in 1991 we had the "Peace Dividend" again riff, non-promotion and movement to non-flying billets followed. I bailed in 1977, got a flying job in the reserves. 18 months later I am getting letters from the Navy, sayin g they are short of pilots, would you like to come back. The gov't is a fickel employer, watch what happens if the "I will quit Iraq" candidate gets elected.