In perhaps one of the more innovative private aviation programs we’ve seen recently, Flexjet is moving its Gulfstream G650 fractional share and lease program from hours to a day based formula.
While the day-based approach on the surface mirrors what Airshare has been offering on its fleet of Phenom 300s and 100s for several years, it’s the first time we’ve seen it being applied to large cabin aircraft. It also amps up the competition between NetJets, VistaJet and Flexjet in the fight for high-spending ultra-long haul private jet fliers.
In this case, the new Flexjet World Access Program is designed to appeal to users who want to make the most of the G650’s range without worrying about burning through their hours. The Gulfstream jet can fly nonstop for up to 8,000 miles or about 15 hours.
Programs start at 75 days per year and like the Cleveland-based operator’s other fractional and lease programs span from 30 to 60 months.
Principal benefits include the ability to keep the same plane with you on multiple day trips as well as not using a large portion of your annual hours in a single trip or worrying about using hours for short hops within a bigger trip. In doing so, it addresses the bain of many fractional owners who struggle to effectively manage their yearly usage of hours.
As an example, a trip to Asia can easily burn 30 hours just on the legs to and from and might take up another five to 10 hours hopping around the region. In other words, a single trip might use up to 40 hours.
“If you have a quarter share in a fractional program, which is 200 hours, one trip can easily use 10 to 20 percent of your hours if not more,” says Clay Wilcox, who is overseeing the program for Flexjet.
He tells Private Jet Card Comparisons there isn’t a specific maximum number of days a customer can keep the same plane with them, however, it is only selling three 75-day units of time per aircraft, and it is holding one of its 650s back to provide the needed lift to accommodate its customers.
Users in World Access also get flights on the entire Flexjet fleet at fixed hourly one-way rates so for shorter trips or when customers don’t want to use their days, they will have a wide variety of options. The Flexjet fleet includes the G450, Embraer Legacy 450, Bombardier Challenger 300 and 350, Phenom 300 and Learjet 75LXi.
The G650 program will initially target fliers based in New York and London, but the hourly rates will apply worldwide. While Wilcox declined to disclose specifics, he said the hourly rate will be close to direct operating costs for the G650, which he described as under $5,000 per hour.
Program customers buy or lease a quarter share of a G650, so like traditional fractional, you will pay for either the cost of the share or a lease amount. The current list price for a new G650 is $67 million, according to Business Jet Traveler implying a buy-in of around $17 million.
The magazine reports the average sale price for used G650s is $53 million and there are currently 12 listed on the market if you want to think about residual price when you exit from your share agreement.
You would then have a monthly management fee as with a typical fractional or lease program, except instead of having 200 hours per year to use, you could conceivably fly double that or more.
For example, taking 25 three-day transatlantic roundtrips would use up your 75 days, but might include 15 hours of flying per trip. An example could include eastbound and westbound legs, plus a flight in Europe. In other words, in this scenario, you would get 375 hours per year for your quarter share instead of the normal 200 hours.
Wilcox said he is already receiving interest from fleet operators that need supplemental lift and owners of smaller jets who need a long-haul solution but don’t want to buy additional aircraft.
As part of the new approach, Flexjet is reconfiguring its G650 fleet to provide for up to four pilots and a forward crew rest area. There will be a seating capacity for up to 13 passengers with sleeping for up to eight.
The jets are all part of Flexjet’s Red Label program with high-end designer interiors, and Wilcox, a veteran of both NetJets and Flight Options, says prospects are already enthusiastic about being able to keep the same plane and flight crews with them.
For multiple stop trips, it means not having to unload all of your luggage at each stop, and he says it will increase reliability. “Whenever you have to reposition aircraft, there’s a chance you are going to have something that throws off the schedule,” he says.
Having the G650 and flight crew waiting and on call provides a user experience that is closer to full ownership. Having a fractional fleet provider at the same time provides consistency in both pilots, safety standards and interior configurations not available with managed fleet operators in the large-cabin sector.
While lead time will be based on getting you an aircraft as soon as possible, Wilcox said it will typically be 24 to 120 hours based on peak days and also the time it takes in some cases to get international flight permissions. The duty time of the four-person crew is 16 hours which also means users can fly the G650 pretty much to its maximum range.
Hourly rates do not include repositioning, so if you fly the G650 from New York or London someplace as a one-way trip you may end up having to pay to reposition the jet, although Wilcox said that the company will try its best to avoid extra charges. “We won’t be repositioning it for the sake of reposition it,” he said.
If you flying necessitates positioning in and out extra flight crews based on duty hour restrictions, those costs are charged as a pass through as well.
Wilcox says the new by the day program takes the place of its existing, traditional fractional share and lease by the hour offer for the G650. He said currently, Flexjet is not looking to extend the approach to any other types in its fleet.
While the devil is in the details, and Flexjet declined to release specifics on pricing, Wilcox says monthly management charges remain the same and hourly rates are reduced, so on the surface, the program creates a new option aside from full ownership, but more so between on-demand charter and hour-based fractional shares or leases.
In terms of the charter market, many owners of ultra-long-haul jets such as the G650 or Global Express are happy to charter their planes for long-haul trips but don’t want short-hops.
So while a Washington D.C. to Zurich flight might be approved, that same owner wouldn’t want the same customer who started in New York and had to hop to Washington for a meeting before heading to Europe.
The day based approached and a competitive hourly rate would mean the customer with the new Flexjet program could load everything he or she needed for their European trip into the G650, head to D.C. for their meetings leaving everything on the aircraft, then fly to Zurich.
From there, they might stay a couple of days in Zurich before again using the same 650 to fly to Glasgow for a meeting, before heading back to New York.
Best of all, they could do it without having to move everything on an off the aircraft at each stop, having to charter different aircraft for the short-haul legs or fret about how many hours they are using.
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