XOJet growth...??

[EatSleepFly]

Thanks!

 

[skiandsurf]

2 questions...

1. Is XOJet a charter or a fractional company? I have theard that the owners dont really buy a plane, they buy a part of the company. Therefore they (the owners) dont really have a valued asset. Can you explain what the business model is?


2. You have the CX, and are ordering the C300. I dont know too much about the 300, but arent these two planes too similar to each other. Wouldnt it make more sense to offer a small cabin and a large cabin, vs 2 medium cabins. These are both transcon airplanes, with close numbers.

 

[jonjuan]

1. XO jet claims that it is fractional, but cheaper if you buy a larger share. Same operational concept. You buy a fraction of a plane, pay mgmt fees, and hourly rates based on usage.
Not sure how their getting fuel at airports other than TEB, for example, is going to be that cost or operationally effective. How do they get around high ramp fees when not buying gas at TEB?

2. The 300 has cabin volume of 860 cu ft versus the X at 508 cu ft. A big difference, I'd say, especially for a coast to coast trip.

 

[t-bone]

2 questions...

1. Is XOJet a charter or a fractional company? I have theard that the owners dont really buy a plane, they buy a part of the company. Therefore they (the owners) dont really have a valued asset. Can you explain what the business model is?


2. You have the CX, and are ordering the C300. I dont know too much about the 300, but arent these two planes too similar to each other. Wouldnt it make more sense to offer a small cabin and a large cabin, vs 2 medium cabins. These are both transcon airplanes, with close numbers.

Good questions...I'll try to answer.

1. We are a little of both. Our airplanes are owned or leased by our General and Limited Partners. Once they purchase the aircraft, they then enter the airplane into an interchange agreement with the rest of our fleet, where they now have access to all of our airplanes at DOC. They can use as many of our planes at the same time as they want, at a cost savings of 40% compared to the fractionals. They own the airplane, so they get the tax benefits of depreciation (I think).

What we get is an additional airplane to sell charter on. In exchange for the owners paying DOC only on occupied legs, we keep ALL charter revenue. We aren't limited to flying only for our owners, so we can supplement their flying with revenue generating charter flights. As a result, our deadheads are less then 20% on average, and a very small percentage of that is uncompensated deadhead. Makes for a much more efficient operation for the owners and for the company. There's a magic number, somewhere around 1000 hours per year per airplane, beyond which profit margins go through the roof. That's what our goal is.

Another difference is that we sell half or whole shares. We don't offer 1/16 of an airplane, therefore we don't have 16+ owners trying to fly on the same airplane on the peak travel days.

2. As for the challengers, my understanding is that for essentially the same acquisition and operating costs, we can get an airplane that satisfies 2 different needs. For the Citation 10 owner who typically flies by himself and wants to get there fast, the 300 offers him the ability to bring his family and not have to sit on anyone's lap. Sure the flight will take a bit longer, but it will be more comfortable. Or, for the 300 owner that typically flies with a larger group, he/she can hop into the 10 for that occasional trip with 2-3 passengers where time is more important that cabin space. Also, I think Cessna's inability to deliver airplanes fast enough has something to do with it.

Hope that helps. Keep in mind, I'm just a pilot so don't quote me on any of this!

 

[jonjuan]

Also, I think Cessna's inability to deliver airplanes fast enough has something to do with it.

But the 300 has been sold out for 3 years since last year. The backlog is even bigger/longer than that of the X.

 

[152SIC]

The reasoning behind getting the 300 is reliability. The reliability of the Citation X off the production line is bad. Also, Cessna cannot deliver the Xs on time.

Also, Bombardier is more "in tune" with our marketing needs. Cessna is not. At least this is what I have heard.

Additionally there is a possibility of getting Globals in the future so being a Bombardier customer already would not hurt.

 

[skiandsurf]

The reasoning behind getting the 300 is reliability. The reliability of the Citation X off the production line is bad. Also, Cessna cannot deliver the Xs on time.

Also, Bombardier is more "in tune" with our marketing needs. Cessna is not. At least this is what I have heard.

Additionally there is a possibility of getting Globals in the future so being a Bombardier customer already would not hurt.

Sounds like you are going after Flexjets owners, or Flexjet is going to give up on the fractional business and get back to selling airplanes.

 

[X-rated]

Sounds like you are going after Flexjets owners, or Flexjet is going to give up on the fractional business and get back to selling airplanes.

No, we are not "going after Flexjet owners", nor are we targeting NetJet's owners with our Citation X's. We are simply concentrating on the super-midsized market for now because we believe it is the most profitable segment of the industry, and it suits our current business model.

 

[Vdub Pilot]

No, we are not "going after Flexjet owners", nor are we targeting NetJet's owners with our Citation X's. We are simply concentrating on the super-midsized market for now because we believe it is the most profitable segment of the industry, and it suits our current business model.

Pretty much hit it on the nose.

 

[kingaira90]

Medical

How is the medical, how long till it kicks in? Any ballpark on what the cost is for a family? When you are hired are you on salary from day one or is there some sort of training pay?

Thanks a lot.-kingaira90