Current issue of Barron's-
The Allure of a Share in the Air
WHEN THE FRACTIONAL-JET-SHARE INDUSTRY was young, the concept behind it looked brilliant -- so much so that Warren Buffett wound up buying the company that introduced it, Executive Jet Aviation, in 1998. Richard Santulli, who founded EJA, "wants to see how far he can take it," wrote Buffett in his annual letter to Berkshire Hathaway shareholders for that year. "We both already know the answer, both literally and figuratively: to the ends of the Earth."
A dozen years later, some fractional providers seem at least slightly closer to the end of the line. Certainly, Buffett's company (now called NetJets) and many of its competitors are struggling in the economic downturn.
If you're a jet-share owner or thinking of becoming one, the provider's financial health will directly affect your experience. At the least, money trouble at the company could result in understaffing, inadequately maintained aircraft and delays in share repurchases when your contract ends. At worst, it might mean that the operation goes bankrupt, threatening shareholders with a financial quagmire. One recent example: JetChoice, a fractional provider based near Minneapolis, went under last May, leaving numerous customers owed hundreds of thousands of dollars that they may never see.
more (with pictures!) at http://online.barrons.com/article/SB127025233165871571.html
The Allure of a Share in the Air
WHEN THE FRACTIONAL-JET-SHARE INDUSTRY was young, the concept behind it looked brilliant -- so much so that Warren Buffett wound up buying the company that introduced it, Executive Jet Aviation, in 1998. Richard Santulli, who founded EJA, "wants to see how far he can take it," wrote Buffett in his annual letter to Berkshire Hathaway shareholders for that year. "We both already know the answer, both literally and figuratively: to the ends of the Earth."
A dozen years later, some fractional providers seem at least slightly closer to the end of the line. Certainly, Buffett's company (now called NetJets) and many of its competitors are struggling in the economic downturn.
If you're a jet-share owner or thinking of becoming one, the provider's financial health will directly affect your experience. At the least, money trouble at the company could result in understaffing, inadequately maintained aircraft and delays in share repurchases when your contract ends. At worst, it might mean that the operation goes bankrupt, threatening shareholders with a financial quagmire. One recent example: JetChoice, a fractional provider based near Minneapolis, went under last May, leaving numerous customers owed hundreds of thousands of dollars that they may never see.
more (with pictures!) at http://online.barrons.com/article/SB127025233165871571.html
