On Your Six
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- Mar 8, 2004
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Just found this press release. Pretty impressive. Clearly the growth represents an increase in fleet numbers vs. the last Q1.
With that said, I still don't fully understand their model. I copied this from their website:
"XOJET Owners, on the other hand, never pay fixed costs for their jets. All costs of maintaining and supporting your aircraft are paid by XOJET."
So, can someone explain how XOJet makes money in this case if XOJet owners by a full share (100%) of a Citation X and yet they don't pay any fixed/supporting costs for the aircraft? Is XOJet making money then on the charter sales while the owner claims the depreciation expense (tax shield)? I am still a bit confused... How does XOJet make money?????
See the press release below:
XOJET Flight Hours Surge in Q1 2008
Tuesday April 8, 1:30 pm ET Private Aviation Leader Sees Year-Over-Year Growth of More than 240 Percent
SAN CARLOS, Calif.--(BUSINESS WIRE)--Private aviation leader XOJET experienced a more than 240 percent surge in flight hours in the first quarter of 2008 over the first quarter of 2007, demonstrating continued growth in the demand for private jet travel. The company also announced a nearly 60 percent increase in the sale of fleet ownership solutions year over year.
“We serve top executives and leading corporations who are typically spending more than 100 hours a year in the air,” said Paul Touw, CEO of XOJET. “For our customers, a tough economy and increasingly competitive business environment trigger the need for more private jet travel, not less. Our reputation for delivering the industry’s best reliability, service and economics has made XOJET the private jet solution of choice for these discriminating private jet travelers, and our Q1 results reflect this leadership position.”
XOJET’s results were propelled by strong customer demand for the company’s high level of service, which XOJET delivers at a cost that is approximately 20 percent lower than conventional solutions. The surge in flight hours was consistent across both the company’s jet charter and fleet ownership solutions. XOJET’s innovative business model, which introduced unprecedented efficiency to the industry, delivers new benefits to both the jet charter and fleet ownership customer segments. The company offers many charter trips at one-way rates, significantly reducing the cost of on-demand jet service. In addition, the entire XOJET fleet is comprised of new aircraft with an average age of less than one year as compared to the industry’s average of greater than fourteen years.
XOJET’s fleet ownership solutions cater to the growing market of high-volume private jet travelers that require guaranteed availability. This segment has been underserved by legacy fractional models, which are designed to meet the needs of the 25 to 50 hour a year customer. In stark contrast, XOJET’s average new customer contract in the first quarter of 2008 was for nearly 200 hours per year, which is approximately four times greater than the typical fractional contract.
ABOUT XOJET
XOJET’s revolutionary model for private aviation is designed especially for high-volume private travelers. The company's strategy is to combine the service, access and exclusivity of owning a jet with the efficiencies and operational rigor of successful commercial airlines. Founded in 2001, XOJET officially launched its service in January 2006 and has quickly established itself as the fastest-growing private aviation company on record. Among its customers, XOJET is known for brand new jets, unmatched economics, stringent safety practices, exceptional service and a 99.5 percent on-time departure rate.
Most recently, XOJET has been recognized with a number of honors including being named a Robb Report "Best of Private Aviation" winner, an Inc. Magazine "Fastest Growing Company" and one of the best places to work in the Bay Area. For more information, visit www.xojet.com.
With that said, I still don't fully understand their model. I copied this from their website:
"XOJET Owners, on the other hand, never pay fixed costs for their jets. All costs of maintaining and supporting your aircraft are paid by XOJET."
So, can someone explain how XOJet makes money in this case if XOJet owners by a full share (100%) of a Citation X and yet they don't pay any fixed/supporting costs for the aircraft? Is XOJet making money then on the charter sales while the owner claims the depreciation expense (tax shield)? I am still a bit confused... How does XOJet make money?????
See the press release below:
XOJET Flight Hours Surge in Q1 2008
Tuesday April 8, 1:30 pm ET Private Aviation Leader Sees Year-Over-Year Growth of More than 240 Percent
SAN CARLOS, Calif.--(BUSINESS WIRE)--Private aviation leader XOJET experienced a more than 240 percent surge in flight hours in the first quarter of 2008 over the first quarter of 2007, demonstrating continued growth in the demand for private jet travel. The company also announced a nearly 60 percent increase in the sale of fleet ownership solutions year over year.
“We serve top executives and leading corporations who are typically spending more than 100 hours a year in the air,” said Paul Touw, CEO of XOJET. “For our customers, a tough economy and increasingly competitive business environment trigger the need for more private jet travel, not less. Our reputation for delivering the industry’s best reliability, service and economics has made XOJET the private jet solution of choice for these discriminating private jet travelers, and our Q1 results reflect this leadership position.”
XOJET’s results were propelled by strong customer demand for the company’s high level of service, which XOJET delivers at a cost that is approximately 20 percent lower than conventional solutions. The surge in flight hours was consistent across both the company’s jet charter and fleet ownership solutions. XOJET’s innovative business model, which introduced unprecedented efficiency to the industry, delivers new benefits to both the jet charter and fleet ownership customer segments. The company offers many charter trips at one-way rates, significantly reducing the cost of on-demand jet service. In addition, the entire XOJET fleet is comprised of new aircraft with an average age of less than one year as compared to the industry’s average of greater than fourteen years.
XOJET’s fleet ownership solutions cater to the growing market of high-volume private jet travelers that require guaranteed availability. This segment has been underserved by legacy fractional models, which are designed to meet the needs of the 25 to 50 hour a year customer. In stark contrast, XOJET’s average new customer contract in the first quarter of 2008 was for nearly 200 hours per year, which is approximately four times greater than the typical fractional contract.
ABOUT XOJET
XOJET’s revolutionary model for private aviation is designed especially for high-volume private travelers. The company's strategy is to combine the service, access and exclusivity of owning a jet with the efficiencies and operational rigor of successful commercial airlines. Founded in 2001, XOJET officially launched its service in January 2006 and has quickly established itself as the fastest-growing private aviation company on record. Among its customers, XOJET is known for brand new jets, unmatched economics, stringent safety practices, exceptional service and a 99.5 percent on-time departure rate.
Most recently, XOJET has been recognized with a number of honors including being named a Robb Report "Best of Private Aviation" winner, an Inc. Magazine "Fastest Growing Company" and one of the best places to work in the Bay Area. For more information, visit www.xojet.com.
(sarcasm)
