XO Jet

[skiandsurf]

When all of our program members are using their airplanes, we raise our charter rates (simple supply and demand economics) as the charter availability goes down. On the days when our program flying is slow, we can lower rates and increase our outside charter availability.

So when the holidays roll around and everyone wants to fly, you take your planes off the market to be used for the owners. (supply and demand...the higher the demand, the higher the price,,,,,but your planes arent making money, they are flying owners on the high demand days).

 

[jonjuan]

They don't have to schedule 10 owners per plane. Just 4. Owners presumably don't get sold off during Christmas and Thanksgiving or spring break. They just dont do any charter flights then.

There are more than 4 owners per airplane. They also lease 100 hours of a plane (not charter), thereby placing more and more owners on a plane which drive up demand exponentially.

 

[flyipilot]

It would be like this:

I park my BMW at the airport 18 days per month it just sits there,

Instead, all these days I am away, I let Hertz rent out my car. They make money do the maintenance and when i return from my trip ... deliver my car to the FBO and i drive home.

In the XO profile ... they have solved they scheduling problem which everyone knows is the weak link in fractional... By changing the problem...

They don't have to schedule 10 owners per plane. Just 4. Owners presumably don't get sold off during Christmas and Thanksgiving or spring break. They just dont do any charter flights then.

If I own a BMW, I do not want it rented out. I do not need it rented out. A true airplane owner does not need or want his plane rented out to some cheap customer who can not afford to buy into my airplane and become an owner like me. You either have money or you think you have money. If you have it, you do not care if your plane sits and sits. I am not against XO Jets plan but, if I were a very profitable human being like all of NetJet owners are, I would in no way want my airplane "rented" out to just anyone. We manage aircraft, we do not charter them "rent" them. Huge difference.

 

[RTRHD]

We manage aircraft, we do not charter them "rent" them. Huge difference.

We don't? Yall making my head hurt.

 

[RTRHD]

We manage aircraft, we do not charter them "rent" them. Huge difference.

We don't? Yall are making my head hurt.

 

[X-rated]

And you would permit them to use your car for free??? You buy the car and they get the profits....I don't think so.

Jeez... read the post! They do share in the profit by the way of reduced costs. I flew one of our owners the other day who used to be a Netjets owner. According to him, he now pays less "all in" for the same number of hours in a X than he paid for an Excel at NJA.

Interesting that XO only allots 400 hrs/yr to owners in comparison to NetJet's 800/yr to full owners. It appears that charter is the majority of the business, otherwise the owners' usage would be greater than 50%.

It's actually split fairly evenly between owners, Fleet Exchange Lease, (read card if you must) and Charter.

 

[X-rated]

Trip from TEB to PBI is a charter, then a pickup at PBI back to TEB for an XO owner.

Charter trip shows up late, shocking i know.

Not just late but a couple of hours late.

What does XO jet ditch the charter? Ditch the owner?

Please don't tell me they send another XO jet plane there this isn't enough of them, yet.

So who gets screwed the owner or the charter?

Proportionally, we have a better plane to customer ratio than you do, so why would it be hard to believe we can recover our own trips?

Don't be ridiculous. nobody gets screwed or ditched. Hopefully, they would not schedule a trip like that, but if they did, they'd be looking at back up plans well in advance.

 

[jehtplane]

I care because I don't bury my head in the sand or wear blinders thinking my way is, and always will be, the best way. I am very open to someone showing me a new way of doing things. In short I am willing and teachable.

I'm really not slamming this guy, I just don't think what he is trying to achieve is maintainable. I think he is like most start up types; seeing what's on paper and thinking that's the way it works. Planes break, schedules change and ultimately compromises have to be made. The smaller and fewer planes you have, the bigger the hit to the bottom line. The numbers look great until you stop expanding and have to start paying the piper.

This guy is very openly taking shots at NJA, RTS, our business model and has stated he is trying to steal our customers. Your boss is the one trying to throw down. He has a good rap, but when you look below the surface I don't see his plan holding water. I could be wrong but I have some serious doubts.

If you disagree, which is perfectly OK, than convince me. That's all I am looking for.

Isn't every airline and every fractional trying to steal the others business???????????

You Netjet guys sure are touchy. Relax, you'll live longer. XOjet has found a niche, just like Netjets did, so why the bashing? Anytime any business does something that fits and works some tool is quick to try and bash it. I am not calling Captain Dad a tool, before this thread gets off track.

 

[X-rated]

If I own a BMW, I do not want it rented out. I do not need it rented out. A true airplane owner does not need or want his plane rented out to some cheap customer who can not afford to buy into my airplane and become an owner like me. You either have money or you think you have money. If you have it, you do not care if your plane sits and sits. I am not against XO Jets plan but, if I were a very profitable human being like all of NetJet owners are, I would in no way want my airplane "rented" out to just anyone. We manage aircraft, we do not charter them "rent" them. Huge difference.

First of all, you can't be an XOJet owner unless you can afford at least a half of a Citation X. That's 10 million. What does a 16th of an ultra go for these days? There goes that theory! Oh, and guess what, owners who "do not care if their plane sits and sits" don't buy into Netjets either. They by the plane and park it in a hangar, and they don't let thousands of other 16th owners fly on it. Its called pt 91.

These people don't accumulate this kind of wealth by wasting money. that's why RS introduced the fractional model. We have simply have further refined the model to to eliminate even more waste. (the empty legs)

 

[gunfyter]

I think you make money with this system... But you don't conquer the world like NJ wants to.


Letting people ue your airplane... isnt that what happens when EJM manages an airplane? EJM charters your plane out when you are not using it.

 

[Ultra Grump]

No

Sounds like a management company.

You own a plane and fly it 500 hrs a year. YOu let the management company charter it the other 700 hrs it flies every year .. reducing oour costs and providing income to the managment company off other people's assets.

Just like a bank uses the money you hve deposited by loaning it out to other people ... when you are not using your money ... instead of leaving it stored in the vault.

You cant do this with fractional owners because there are MANY owners per plne nd you have to do THEIR trips no matter what.

But with full ownership or even half shares ... there are only few trips that HAVE TO be done. You then pick and choose what charter trips you can do ... that also get your airplanes near to where you need them for the next owner trip.

You (and everyone else) missed the point entirely.

Let's say I am in the market for a charter from LAX-TEB, and I want a X. I call up XOJet and book the trip. I am (presumably, and correct me if I'm wrong on this T-Bone) charged for the reposition from Sacramento to LAX, then for the LAX-TEB leg, then for the return to Sacramento. However, the plane just flew into LAX with an XOJet owner, and XOJet has another charter scheduled from TEB back to LAX (who is also charged for the "ferry" from Sacramento-TEB, and the "ferry" from LAX-Sacramento). Etc, etc.

It's easy to see how they're making money when they're charging for "ferries" that are actually occupied, and paid-for (or even non-existent), legs.

You don't see anything even a little bit fraudulent in that?

 

[t-bone]

You don't see anything even a little bit fraudulent in that?

Nope.

We enter into an agreement to move client from point A to point B. Sometimes that trip will cost $20k, sometimes that trip will cost $15k (depending on where the trip is quoted from). If the trip is more expensive to cover longer reposition costs, and the client agrees, then where is the fraud? We are providing the service the client requested, and we are charging a price that was agreed upon. What the airplane does before and after the occupied leg is not part of the service the passenger requested, therefore it's our prerogative to do with that airplane what we want.

Does a taxi cab driver have to return to his home base before picking up his next fare? Same with a limo driver? Same with a truck driver? Same with any mode of transportation. It's just supply and demand that drives the pricing of our product.

 

[t-bone]

OK, here's another example.

I rent a Hertz car from Atlantic in TEB for the crew rate of $40 per day, under the assumption that I will return the car to the same location (no repo legs required by hertz). Now my plans change, and I end up driving the car to Trenton and leave the car there. Hertz needed that car back at TEB, so they are now going to charge me $100, which covers the repo leg back to TEB. I know I'm going to pay more for the one way because the car isn't where Hertz needs it, nor is it where I originally agreed that I would return it. (anyone who rents cars knows that one-ways are always significantly more expensive than the round-trips)

Now, another crew lands in Trenton, and needs a car to get up to TEB. Is Hertz committing fraud by renting the car that I just paid $100 for to this new crew, and only charging them $20? Or is Hertz obligated to drive my car empty back to TEB, and then drive another car empty from PHL to TTN for this new crew to drive to TEB? Heck no! That's capitalism at it's finest, and good for Hertz for being able to make extra money while getting a car back into position for the next day's reservation.

How is that different than what we're doing?

 

[t-bone]

Now I'm on a roll...

You are in a hotel in SFO. Your show time at the airport is 2100 for a red-eye to the east coast. You don't want to leave the hotel until 2000, and the hotel charges you for a full additional night for the late checkout. Once you leave, they are able to get your room cleaned and then re-occupied an hour later by a different client. Now you are BOTH paying for that room for that night.

Is that fraud?

 

[brokeflyer]

not at all.....all charter companies do that.

I think there is a seprate forum for 135 operators here somewhere. You'll see they all do it the same way you are.

 

[Whale Rider]

Its funny how alot of people on this post either don't understand XOJet's business model or don't want to understand. There no sense in arguing. XOJet is making money. So live with it!

 

[Ultra Grump]

What T-Bone was saying, I think, was that a charter customer may pay for some, all, or often "all and then some" of a repositioning leg. (ie. the double dip) Thats how the company can legitimately claim 97 percent revenue legs. It's not that we never fly empty because we certainly do. However, charter quotes often include return to base empty leg costs. Often, we can get to where our next owner needs us in less flight time than we would have spent returning to base resulting in excess revenue to offset or pay for other non-compensated legs.

I guess it depends on how you present it to your charter customers. If you simply say, "your trip costs $X," then yeah, that is fine. But if you tell me, "it's $10000 for the repo leg and $10000 for the occupied leg," you're pushing the boundaries if you aren't actually repositioning the aircraft. I flew with a guy not too long ago who used to work for a company doing pretty much what XOJet is doing. When they picked up a charter customer, they were specifically instructed by the company not to tell the pax where they had come in from, because the pax were being told they were charged for the ferry leg from the plane's base, regardless of where it came from. Why were they not allowed to disclose where they came from? Because it was not exactly above-board, and the pax would be pissed and potentially sue if they knew that the plane had just ferried 100 nm, instead of the 1000 they were charged.

Comparing it to a hotel room is not the same - if I check out late, I have used the service, and most of the time am charged less than a full day-rate.

Additionally, with a one-way rental car, it is a "one-way fee," not a "repositioning" charge. Semantics, maybe, but still different.

And of course charter companies are paragons of exemplary business practices.

But whatever. Good luck with that.

 

[xrated]

Its funny how alot of people on this post either don't understand XOJet's business model or don't want to understand. There no sense in arguing. XOJet is making money. So live with it!

Blah Blah Blah, I don't understand why the sky is blue either so what's your point? I'm guessing you probably think Boeings are better than Airbus's too? The only thing that is keeping XO alive is the highly skilled, highly motivated, and well.....just high, pilots they've hired from Swift. LOL!!

How are you doing E?

 

[X-rated]

No

Sounds like a management company.

You own a plane and fly it 500 hrs a year. YOu let the management company charter it the other 700 hrs it flies every year .. reducing our costs and providing income to the managment company off other people's assets.

Just like a bank uses the money you hve deposited by loaning it out to other people ... when you are not using your money ... instead of leaving it stored in the vault.

You cant do this with fractional owners because there are MANY owners per plne nd you have to do THEIR trips no matter what.

But with full ownership or even half shares ... there are only few trips that HAVE TO be done. You then pick and choose what charter trips you can do ... that also get your airplanes near to where you need them for the next owner trip.

Sorry Grump.

It sounds to me like Gun has a pretty good grasp of the concept except we're not exactly like a management company. We're more of a hybrid. Like a management company in the way Gun pointed out, but also a Fractional in that there can be multiple owners per plane, the owners rarely fly on their own plane, and they have access to multiple aircraft simultaneously.

 

[NJAowner]

Here is how XOJet works form the customer side -- my actual experience since I have inquired. The concept is interesting but I am not sold on it.

Charter -- theoretically XOJet was suppossed to eliminate ferry/dead head costs and result in a lwoer cost. Actual quote, NYC area to Florida - non holiday spring weekend. I was quoted a ferry from Wilmington, DE base to NYC, occupied leg from NYC to FLA, return ferry to Wilmington, all at a cost of well over $4500 per hour. I said, what if you have another customer/owner for the plane in Fla - isn't that suppossed to be my savings. Answer, you pay the repositioning back to the XO base whether the jet flies there or not. The savings to me is that XO jet has a both Wilmnington, DE and Sacramento, CA base. Therefore, I only need to pay to return the jet to the closest base, not clear across the country.

Block lease -- this is the most enticing product for me since I only need about 150 hours per year. However, the director of Sales (initials, LC) keeps telling me that my regional sales rep will contact me. I have heard this several times over the past few weeks. I guess he/she is just too busy selling entire planes to call me for a block lease.

Just my personal experience.

Fly safe.