Citationshares lets 30 go

[Flex-ible]

There are a number of things I think they can do to become more solid. Get out of the card business. Put penalties on owners that are geographically disadvantaged. Do not sell 1/16's or even 1/8ths. Will this reduce revenue and market, yes. Make it more solid yes.

Ah, I suggest you check with your sales department. I am willing to bet you will find the most likely people to buy shares 1/4 or larger are those who previously owned cards, or smaller shares.

Gotta let them stick their toes in the water to find out just how warm and comfy it is!

 

[CL300Pilot]

Flexjet. Check out the Bombardier annual report and you will find that Flexjet has profitted the past 2 years and this year is even better.

The cards are also beneficial in 2 different ways. One, we get the folks who want to try our services before they buy a share at no capital cost and the second is that the owners who are not flying as much, but still want to be in the program, can not renew their contract but buy the cards instead. It is a very beneficial system for not only the fractionals but the owners or potential owners as well. The only way it is not beneficial to the fracs is if you oversell cards and do not have the core fleet to support them.

Other than Netjets, which has a pile symbiotic company relationships, what other frac is really or ever has produced decent profits.

 

[Publishers]

From a sales view, that is a legitimate point, however, it is also the area that causes all the problems. Just think about it but use one aircraft as an example. We double the number of owners for you to fly. We sell a card to another 5 or 10 to use ramdomly, and, a couple of these people are in Montana, another Arkansas, another in New Mexico, and most of these are going to want the aircraft at the same times of the year. You have to build the cost into the equation. Your problem is when you do, you miss the easy fruit on the tree as you are uncompetitive. The guy who lives in NY and goes back and forth to Florida, he can charter for much less. These are all elements of why the business is so hard. To offer the program nationwide and be aggessive in the sales front, you deadhead all over and end up with a certain percentage of customers who you do not make a dollar on as compared to selling 4 shares on same plane to people who all live in NY and go back and forth to Florida.

 

[brokeflyer]

From a sales view, that is a legitimate point, however, it is also the area that causes all the problems. Just think about it but use one aircraft as an example. We double the number of owners for you to fly. We sell a card to another 5 or 10 to use ramdomly, and, a couple of these people are in Montana, another Arkansas, another in New Mexico, and most of these are going to want the aircraft at the same times of the year. You have to build the cost into the equation. Your problem is when you do, you miss the easy fruit on the tree as you are uncompetitive. The guy who lives in NY and goes back and forth to Florida, he can charter for much less. These are all elements of why the business is so hard. To offer the program nationwide and be aggessive in the sales front, you deadhead all over and end up with a certain percentage of customers who you do not make a dollar on as compared to selling 4 shares on same plane to people who all live in NY and go back and forth to Florida.

that's probly part of the reason other fracs aren't doing very well. We beat that issue many years ago and it's been working so far.

 

[RCA]

that's probly part of the reason other fracs aren't doing very well. We beat that issue many years ago and it's been working so far.

The Kool-Aid I'm drinking says the Big Three Fracs are in the same boat.

 

[172driver]

From a sales view, that is a legitimate point, however, it is also the area that causes all the problems. Just think about it but use one aircraft as an example. We double the number of owners for you to fly. We sell a card to another 5 or 10 to use ramdomly, and, a couple of these people are in Montana, another Arkansas, another in New Mexico, and most of these are going to want the aircraft at the same times of the year. You have to build the cost into the equation. Your problem is when you do, you miss the easy fruit on the tree as you are uncompetitive. The guy who lives in NY and goes back and forth to Florida, he can charter for much less. These are all elements of why the business is so hard. To offer the program nationwide and be aggessive in the sales front, you deadhead all over and end up with a certain percentage of customers who you do not make a dollar on as compared to selling 4 shares on same plane to people who all live in NY and go back and forth to Florida.

If you're only using one plane, that's a legitimate argument. If you have 500 it's a whole different story.

 

[jonjuan]

From a sales view, that is a legitimate point, however, it is also the area that causes all the problems. Just think about it but use one aircraft as an example. We double the number of owners for you to fly. We sell a card to another 5 or 10 to use ramdomly, and, a couple of these people are in Montana, another Arkansas, another in New Mexico, and most of these are going to want the aircraft at the same times of the year. You have to build the cost into the equation. Your problem is when you do, you miss the easy fruit on the tree as you are uncompetitive. The guy who lives in NY and goes back and forth to Florida, he can charter for much less. These are all elements of why the business is so hard. To offer the program nationwide and be aggessive in the sales front, you deadhead all over and end up with a certain percentage of customers who you do not make a dollar on as compared to selling 4 shares on same plane to people who all live in NY and go back and forth to Florida.

Problem with your synopsis is two/or three fold. 1) There are hundreds of flexjet/netjet, etc. owners who live in the NY area and use their shares exclusively to/from so. florida. You say they can Charter for much less. That's correct in theory-problem is they don't, otherwise, there would be very few frac owners in NY. With these folks, the deadhead percentage is way less and makes up for the much smaller number of flights (but greater percentage of deadhead) on flights out West (Spokane to Bozeman). Although these NY owners "pay more" than they should ("their" deadhead is less, they also pay less for fuel than those in other parts of the country. In theory, those out West with a higher deadhead percentage pay the national fuel average which is higher than they should pay.
2) Flexjet smartly smooths out demand across its fleet over the year by selling 25 cards with high demand blackout days. If you want to fly on the highest demand days of the year, you can, but the cost is the highest. For a discount and flexible in travel days, you are restricted from the highest demand days. I believe there are 5 levels of days and costs. This keeps hundreds of card owners from competing with fractional owners on the high travel days while pushing otherwise soft demand to low demand days. Smooths out the spikes in demand which is costly for operations. You reduce charter while not having excess aircraft/aircrews on low demand days.

 

[CL300Pilot]

I understand what you are trying to say, however, you are not comparing apples to apples. With one aircraft, you are correct, the business cannot be viable. With 100 aircraft though, you have the ability to do this so long as you do not oversell your "core" fleet. I beleive this is what Marquis Jet did years ago and have since fixed their problem.

Another reason why the cards are selling as good as they are and that they are a win win for everyone is that most of our owners do not want to be chartered. They like knowing that a Flexjet aircraft and crew will be taking them where they want to go. I would be willing to bet that the others have owners with the same desires as well. The folks who buy into cards and fractionals dont' care as much about the bottom line as they do about service. If it was about money, they would fly the airlines.

From a sales view, that is a legitimate point, however, it is also the area that causes all the problems. Just think about it but use one aircraft as an example. We double the number of owners for you to fly. We sell a card to another 5 or 10 to use ramdomly, and, a couple of these people are in Montana, another Arkansas, another in New Mexico, and most of these are going to want the aircraft at the same times of the year. You have to build the cost into the equation. Your problem is when you do, you miss the easy fruit on the tree as you are uncompetitive. The guy who lives in NY and goes back and forth to Florida, he can charter for much less. These are all elements of why the business is so hard. To offer the program nationwide and be aggessive in the sales front, you deadhead all over and end up with a certain percentage of customers who you do not make a dollar on as compared to selling 4 shares on same plane to people who all live in NY and go back and forth to Florida.

 

[B19 Flyer]

I find it offensive that you are compelled to tell us all what we're doing wrong, yet you don't work at a fractional. You are coming here and rubbing salt in unemployed pilots wounds. It would be easy for me to jump in the majors forum and explain to those pilots what is wrong with the airline industry. We are all scrambling to become more efficient and profitable. Your views too are onesided, frac pilots are not a dime a dozen. We will continue to focus on what we can control as pilots and provide the best service to our customers and hopefully the higher ups will find a way to attract and retain owners. It is easy for you to analize what has gone wrong, but you offer nothing constructive. With that said I retract the namecalling in the previous post.

No, they are not one-sided. They, like mine, are from a point of view that you don't understand because you haven't walked on the management side of the fence. All of the posters in here that fly and don't manage can't imagine how hard it is to balance the needs of the customer and the bottom line while making sure the operation is safe.

 

[Publishers]

There is no question that as things have gone along, some of the issues with cards have been changed, but the number if aircraft in the equation is not really the factor. It relates more to deadhead hours, aircraft utilization against residual value of share or aircraft value at end or disposal, type of aircraft, etc.. Flex has done a pretty good job as has Citation shares, but again like Netjets, there is an undefined symbiotic relationship in their case with the manufacturer. Avantair tries to be like that as pretty much the sole Piaggio user. Nevertheless, on their own, none of have been consistently profitable.
To give you some idea of impact, at MIA 40% of the general aviation traffic is Frac. Netjets is 80% of that. Flex is next with near 10% and then the rest are divided equally.
Ironically in a down economy, the flights are way down but the percentages are the same.