How tight is the supply of private jets? Flexjet is now limiting access for new buyers of fractional shares and leases
Flexjet is limiting access for new buyers of fractional shares and leases. The move was disclosed in an email to current customers.
In the email Flexjet CEO, Michael Silvestro wrote, “(We) have also added access restrictions on new fractional and lease sales contracts that will close in the coming months. This decision was driven to protect our fleet capacity to better insulate operations. It will ensure that we continue to deliver you the highest level of service. We certainly want to grow business, but not at the expense of you, our current customers.”
Fractional providers are getting swamped as customers who didn’t use their hours in 2020 and earlier this year are now flying at record levels.
Share customers are using hours they rolled over. At the outbreak of Covid, fractional flight hours were down over 80%.
Providers like Flexjet are now paying the price for extending the validity of jet cards. The cards usually expire in 24 months.
In 2020, Flexjet and others extended the validity of cards. However, the customer-friendly move is now stretching supply.
Last month Flexjet said it was no longer selling jet cards to new customers, although it is renewing existing customers.
In the email, Silvestro wrote, “Historically, we have owned approximately 30% of our entire fleet as core fleet aircraft to support the fractional ownership program. In response to the increase in flying, we are making immediate and significant investments in our core fleet of aircraft and accelerating new deliveries from OEMs to meet the expanded demand.”
Since September, Flexjet has been adding four additional aircraft per month. It plans to add over 55 new jets in the next 14 months.
The $850 million in new airplanes will boost the Flexjet fleet to 231 aircraft by the end of next year.
Silvestro told customers, “Given our current forecasted utilization by our owners, we expect this increased fleet to align with demand by June 2022.”
NetJets vs. Flexjet
Last month NetJets said it would not provide immediate flight access for new share buyers until their jet arrives or the first quarter.
Flexjet is taking a different approach.
Silvestro tells Private Jet Card Comparisons new buyers will be able to fly. However, they won’t be able to fly on high-demand days, which make up about 20% of the calendar.
He described the approach as an “intelligent way” to serve new customers, but not at the expense of existing clients.
Flexjet has hired 169 pilots this year and will add 292 pilots next year. It is also adding 100 people to its owner services and operations center.
Silvestro wrote, “We as a company, and our industry, have been adversely affected by supply chain issues – from fleet support to fuel supplies to rental car shortages. For many of you, your service has been unaffected to date. But for some, I recognize that these issues have been more impactful and that you have not received the quality of service we promised.”
He added, “The dramatic spike in flying volume has resulted in us occasionally falling short of our own high standards. This is something we take very seriously.”