XOJET business model?

[NETFLIER]

what is it? how can they say no monthly fees, fixed cost per hour of $3035 for a citation X. thier adds sure make you look, but the numbers aint possible, so where are you making the money?

Netjets was using them to offset but then the dumbaz pilots were trying to sales pitch our owners so cut them off we did. Ofcourse we are really the dumbazz for using them in the first place.

 

[Amish RakeFight]

Positive article on XOJet in this months Flying magazine. p. 28

 

[Amish RakeFight]

Article claims that XOJet has a 3% deadhead ratio that is 10 times lower than the average fractional.

 

[jonjuan]

Article claims that XOJet has a 3% deadhead ratio that is 10 times lower than the average fractional.

That's because they are not a fractional. With every aircraft they add and become more like a fractional, their deadhead will go up. More power to them if all they sell are LA-NY shares. I also suppose they don't count the CX maintenance base runs as deadhead. LOL "Oh, but our Xs don't break like njas do."

 

[bailey3083]

Are they not more of a ACMI then a frac?

 

[johnsonrod]

More XOJet Details

Check out www.xojet.com. This excerpt came from a recent XOJet press release (XOJet got a huge investment from a well-known private equity firm called Texas Pacific Group):


"XOJET distinguishes itself by offering both fractional ownership and charter services, a range TPG likes, McGlashan added. Fractional ownership is about a $5 billion industry, he said, while charter is a roughly $28 billion market.

Paul Touw, president and CEO of XOJET, said in the statement that "there has been no significant innovation in this industry since fractional ownership was introduced more than 20 years ago." About 50% of XOJET's business is generated from contracted clients who lock in an average of 200 to 300 hours of flight time a year, Solinger said. That's far above the 25 to 50 hours that is typically offered by the fractional ownership model, which requires customers to purchase a share of the aircraft. "We don't require anyone to buy," said Solinger, though the company offers ownership if a customer desires.

In 2006, XOJET generated $36 million in revenue, he said. He quickly added that annual revenue has been more than doubling since January 2005. Earlier this month, the company said it was acquiring 30 Cessna Citation Xjets and 80 Bombardier Challenger 300 jets with a combined market value of $2.5 billion. The orders will boost XOJET's fleet to 127 super-mid size jets by 2012. All told, and including the lease financing, the company has raised $542 million."

 

[jonjuan]

Paul Touw, president and CEO of XOJET, said in the statement that "there has been no significant innovation in this industry since fractional ownership was introduced more than 20 years ago."

And this still doesn't represent a significant change.

About 50% of XOJET's business is generated from contracted clients who lock in an average of 200 to 300 hours of flight time a year, Solinger said. That's far above the 25 to 50 hours that is typically offered by the fractional ownership model, which requires customers to purchase a share of the aircraft.

Ever wonder what QS stands for on nja tails? They too thought the majority of purchasers would buy 200+ hours a year. Once they got past 20 aircraft, oh boy did they quickly run out of clients. They soon realized they could not turn away 50-150 hour owners who made up the bulk of their aircraft. It's the pyramid thing-why tuow quoted the chater market as being 5 times the size of the fractional market. Oh yeah, then nja went to the 25 cards. The "base" of the pyramid.

"We don't require anyone to buy," said Solinger, though the company offers ownership if a customer desires.

Of course not. We'll just let you fly on the aircraft for free while we pay the financing costs. Ever see leasing rates versus financing rates? Ever see how hot dogs are made? No free lunches, especially in aviation. Not sure, but think all frax offer lease financing. Still don't have to buy.

In 2006, XOJET generated $36 million in revenue, he said. He quickly added that annual revenue has been more than doubling since January 2005. Earlier this month, the company said it was acquiring 30 Cessna Citation Xjets and 80 Bombardier Challenger 300 jets with a combined market value of $2.5 billion. The orders will boost XOJET's fleet to 127 super-mid size jets by 2012. All told, and including the lease financing, the company has raised $542 million."

As the company grows, deadhead will also QUICKLY double, triple, and quadruple. By, by profits. Why is it that this program is the perfect mousetrap? The big boys throw a couple of switches and they are now in the same neighborhood. In the end, it's about money. If it's there, companies will adapt.
TPG? Yeah, they are no different than the hedge funds who are trying to get some of the major airlines to merge (think UAL and DAL this week), make a sh1tload of money and split, leaving the final result a disaster, both for the employees and long term stock holders.

 

[skiandsurf]

Was talking to a NJ "big-wig" about XOJet. His thought was XOJet is basically chartering out C-Xs at a loss on every flight. The going rate for a C-X is about $4000/hr, which is losing money. Most of these planes on the charter market, are just trying to offset some of their costs, so they can charge less money. Whereas XOJet is trying to make money at a losing rate.




I have not checked the rates to confirm this guys thoughts.

 

[Huggyu2]

Looks like Paul Touw should subscribe to Flightinfo.com. He apparently has no clue what he's doing.

 

[BengalsFan]

Ohhh Huggy, play nice!