Best Positioned Fractional

[glasspilot]

The biggest piece of the cost is NOT the plane.

Here's proof:

Cost of plane: ( Hawker 400XP at NetJets)

$8,000,000 'ish for the whole plane. For a 1/16 share that's $500,000.

Depreciation is around $100K, deductible up front. So you spent $400K on you plane.

Now, your "other" costs are $5,280 a month and $1,654 an hour (times 50 hours a year).

$5,280 a month times five years is: $316,800
$1,654 an hour times 50 hours a year times 5 years is: $413,500

Add those together is $730,300. (316,800 + 413,500)


So, for the slow minded here is the breakdown:

"BIG PIECE" price of purchase: $400,000
Rest of picture: $730,300


Oh yeah, and at the end you STILL OWN a $400K airplane that you can sell and re coupe a VERY significant portion of your "big piece" of investment.

Bottom line: If you think the cost of acquisition is a major factor in fractional ownership then you are retarded. I'm looking at you Trash with your Fulcrum flight experience!

 

[lowspeed]

In my old gig I operated two airplanes for my boss. The smallest part of the deal was the actual aircraft cost for use. We ended up making money on one when we sold it. Kinda sucks to sell your own job away. Anyways I didnt mean to start a cat fight, Every fractionals cards are expensive compared to a share ownership. One of the good things I have heard owners talk about at avantair is how after their term was up they got back 90% of what they paid up front.

 

[glasspilot]

It's not a "cat fight". It's just the ignorant getting educated.

 

[lowspeed]

sorry glass bad use of a word... my bad

 

[doh]

I have nothing to add to this post except to say it's been a while since I've seen someone post a thoughtfull question and recieve so many good responses. God it's good to be out of the airlines.[/quote]

Amen my brother, amen.

 

[transpac]

Don't want to be pessimistic, but in my view the fractional business is facing a slowdown if not a retreat. Corporations are under a microscope on perks and salaries and financial institutions are in a meltdown. Even the super rich have lost huge chunks of their net worth with the fall of the financial sector of the economy. It's unlikely that the proposed taxpayer bailout will allow business as usual, so my guess is we face a rough couple of years in this business.

 

[JokerFuel]

Any economic downturn is in direct proportion to my seniority and proximity to upgrade. Stagnation ahead!

 

[Photoflight]

Any economic downturn is in direct proportion to my seniority and proximity to upgrade. Stagnation ahead!

DAMN YOU!

 

[theskyking]

Any economic downturn is in direct proportion to my seniority and proximity to upgrade. Stagnation ahead!

In spite of all its flaws, thank you IBB. I will be a lot farther ahead financially than otherwise during this stagnation.

 

[Schrode]

One consideration is also WHO is looking at fractional ownership.

In a market downturn, the guy who owns his own jet and employs several pilots sees the fractional ownership option as an inexpensive alternative while maintaining his/her personal quality of life.

In a Bull market, the guy who just made his first 30 million sees fractional ownership as a good way to become a jetsetter - without spending the whole 30 million in one shot.

Our competition is not "First Class" seating on the airlines.

 

[Publishers]

Our experience is that most of the people who sold off during this downturn have not even used charter since the aircraft went away.
Most of them had a comfort level with crew and own aircraft not translateable to franctionals.

 

[ArtVandalay]

It's ironic that whoever YOU work for is doing "better" than the other. Dumb question.

 

[Publishers]

I think we would all be tremendously naive to think that the developments of this week are not taking a toll. Read the latest BCA or other rags and look at things like used aircraft inventory, fuel sales into business aircraft, business operations.
We are not insolated from this and the failure of credit markets would have a tremendous impact on everyone in it.
Dayjet did not fail because people did not like it. Not even because of the aircraft. They failed because money was no longer available. You may find that hte car lease you want or the purchase money is no longer there.

 

[LizardEyes]

Agreed!!

Publishers you hit it on the head. If you have never called your congressman or woman. DO IT!! Tell them to bite the bullet and vote for this. If the credit markets seize there may only be NETJETS left. When you are big you might have more flexibility to shrink. Don't get me wrong all the big four are equally exposed. IF you don't think credit is the engine of our industry think again. NJ just might get through. If this bill passes there are still gonna be some slim times until all this bad debt gets through the system. I hope I am wrong but furloughs are a possibility til the economy gets back to where it was 12 months ago.

 

[Publishers]

I was reading yesterday on the impact on the jet order board of people having difficulty financing the new purchases.

 

[blueridge71]

The way I see it, the fractionals may lose some owners due to financial difficulties.

On the other hand, that will probably be somewhat offset by people/companies who sell their single-owner aircraft for a share.

 

[Helmsalee]

OK, maybe it will hurt us. But look at what you are leaving for your kids! It's tragic that no one can take the long view. It is always "What does this do to ME NOW."

 

[Flex-ible]

I was reading yesterday on the impact on the jet order board of people having difficulty financing the new purchases.

The problem, which is affecting cars as well as airplanes, is the difficulty in establishing resale value. Three years ago, SUV's had pretty good resale value so lease payments were low. Now, the leasing agencies are getting these SUV's back and getting SLAMMED because of the poor resale value.

Financiers of aircraft are in the same boat. Many "owned" aircraft are actually leased (for various reasons, chiefly having to do with our complex and convaluted tax system). That money has dried up, at least in part because the leasing companies cannot determine what the residual value should be.

AIG is the largest aircraft leasing company in the world, owning many of the planes operated under 121. It was considered one of the valuable pieces of the company before the bailout - but they have not devalued their inventory yet.

 

[gunfyter]

Financiers of aircraft are in the same boat. Many "owned" aircraft are actually leased (for various reasons, chiefly having to do with our complex and convaluted tax system). That money has dried up, at least in part because the leasing companies cannot determine what the residual value should be..

Begin HiJack

All the more reason for the Fair Tax

End Hijack

 

[jonjuan]

Please post your reference.
Because as per our President, we are not the ones with unsold aircraft.

Someone's president was lying.

 

[Fozzy]

Someone's president was lying.

Why don't you add the date to that quote?
I will for you. 9-16-08.
We were still hiring in September.

Maybe you should go back to 2003 up some of my rants from back then. :laugh:

 

[jonjuan]

9-16-08, you had many, many unsold aircraft and were deferring deliveries at the cyclic rate. Your president was lying to you-that's all. If he were honest about the situation, he would have stopped hiring 6 months earlier. The other fracs seemed to have seen noticed this and took action, but he didn't. Is he still there?

 

[brokeflyer]

9-16-08, you had many, many unsold aircraft and were deferring deliveries at the cyclic rate. Your president was lying to you-that's all. If he were honest about the situation, he would have stopped hiring 6 months earlier. The other fracs seemed to have seen noticed this and took action, but he didn't. Is he still there?

are you this big of an A hole in front everyone else or just on the message board?

show a little class, EVERYONE and EVERYTHING is doing bad.

 

[doh]

Avantair gets my vote for best positioned. A lot of people are going to stick with them once they try them. NJA has BH backing them. To paraphrase Bill Murray, "So they got that going for them, which is nice." Flex and CS both have manufacturers behind them. See the above quote. Flops is the big question mark in my mind. I'm rooting for ya! But you have the hardest row to hoe.

 

[doh]

The way I see it, the fractionals may lose some owners due to financial difficulties.

On the other hand, that will probably be somewhat offset by people/companies who sell their single-owner aircraft for a share.

Some of the on demands that sell a card will also benefit from this as well. Good post.

 

[brokeflyer]

Avantair gets my vote for best positioned. A lot of people are going to stick with them once they try them. NJA has BH backing them. To paraphrase Bill Murray, "So they got that going for them, which is nice." Flex and CS both have manufacturers behind them. See the above quote. Flops is the big question mark in my mind. I'm rooting for ya! But you have the hardest row to hoe.

yes, they are by far the best turboprop operator out there....Their only bad point is they have some really piss poor, idiot managers there....

I hope they dont fall the same as USAir and Pan Am. Just remember there are no bad companies, only bad managers.

 

[wacoflyr]

How to reply? Let's just say that I respect your clarity, and leave it at that. Otherwise, temptation would get the best of me. Where is HAZMAT when you need him? GLASS?

Wacoflyr

 

[glasspilot]

I'm just tending my garden. In my quiet place listening to Green Onions by Booker T. & the MG's.

Avantair management? Everybody does what they can with what they have. Think our Founding Fathers were a cohesive group that ran smoothly like a German race engine? Nope...but look what they came up with.

Ya'll should check out Green Onions...great song. No words to confuse you. Soul music.

Click HERE for some Green Onions

 

[wacoflyr]

I just realized what a wimpy reply that was. Broke, we are big enough that we have some good management, and some bad management. Overall, they do a good job.

Wacoflyr

 

[glasspilot]

You didn't click the link...if you had you wouldn't be all worried about trivial things like Avantair management. It'll all take care of it's self.

Besides, you would have to go WAY out of your way to screw up a business that sells a plane that goes just shy of 500 miles in an hour burning less than 100 gallons of Jet A, Cruising up to 41,000 feet in a whisper quiet cabin with seating for 8...and an enclosed lav.

So, as to answering the question of this thread...Avantair is clearly the best positioned fractional. Most importantly they have the Piaggio, they have great service, great pilots, stellar safety record, and yes...great Management.

Now click the damn link and relax... Here's another:


Another Green Onion

http://www.youtube.com/watch?v=U-7QSMyz5rg