The fractional factor

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Ground photography of the Executive Airshare Cessna Citation CJ2+ with the Embraer Phenom 300.Wheeler Downtown Airport (MKC) Kansas City MO USA

In April Airshare, the fractional ownership company, created a tongue-in-cheek ad targeting Wheels Up. The ad’s TV spot said: “While Wheels Up wants to make business aviation accessible to millions of consumers, Airshare wants to bring the best experience to you because we’re not a platform. We’re a real-life business tool designed for efficiency, privacy and getting you from point A to B to C then back again all in one day.”

While the company says the advertisement led to lots of enquiries, it also reflects a frustration that other fractional operators feel. While charter and jet card companies (and Wheels Up) have been getting lots of attention, fractionals have quietly been growing their fleets.

Fractional activity is up 475.6% year-on-year (YoY) compared with the same time in April 2020, according to the latest Argus TRAQPak report. Even as flight activity took an expected 1.4% decrease month-over-month from March, fractional activity posted the only increase, up 2.2% for April 2021. A significant proportion in the light and midsize segments.

NetJets is looking to add 40 aircraft per year for the next decade. FlexJet has added aircraft and opened in Europe. Airshare, until now just flying Phenoms, has just become the latest Bombardier Challenger 350 fleet operator – ordering three of the super-midsize jet with the option for 17 more, each priced at $19m for a 2020 model.

“We are seeing huge interest from our customers in providers,” says Nic Imrie, co-founder of I&W Aviation, which advises customers on the best way to use business aircraft. “One reason is they have high brand recognition, experienced sales teams and good reputations. With so many first-time users in business aviation in the past year, it’s natural these fliers would gravitate to these well-known and trusted companies when they begin. In these uncertain times, I think clients are looking for stability and security and these established companies provide that. We have also seen these companies put incentives in place to attract new business: lower pricing on some aircraft, shorter term commitments or longer time to use purchased hours, etc.”

Imrie says that customers are attracted by flexible booking terms through their programmes: guaranteed availability on 10-24 hours’ notice and free cancellations at short notice. “With the ever changing travel restrictions, clients recognise this is very helpful,” he says. “Contrast this with charter where you may have to pay a cancellation fee if you test positive the day before your flight.”

I&W is also seeing pent-up demand. “Existing programme clients have fixed hours and haven’t been able to fly as much in the past year. There is pressure to use hours that have accumulated on their accounts and now that travel is getting easier, there is a rush out of the gate to travel and use the hours,” says Imrie.

Lee Rohde, president and CEO, Essex Aviation told CJI: “The interesting question will be how many of the card buyers will renew once the hours have been used up. Most people who start to fly privately will continue in some manner, so how this will play out in the coming months and years will be interesting to watch.”

This is not the first time Airshare and Wheels Up have gone head-to-head. This year’s Superbowl saw Wheels Up ambassador Tom Brady go head-to-head with Airshare’s Patrick Mahomes. Brady won that one, but no one should write off Mahomes (or Airshare) in the future.

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