Ask any entrepreneur and you'll get the same response--time
is precious. Pose the question to frequent business travelers who
log 100 or more in-flight hours a year, and they'll readily
acknowledge that valuable hours are lost in transit on commercial
flights due to delayed connections or inconvenient stops at an
airline's hub. Wouldn't it be nice to have your own private
jet?
Of course it would be a time-saving luxury. But purchasing a
private aircraft is not a viable option for most
entrepreneurs--even a low-end, seven-seat Cessna Citation S/II
carries a sky-high price of $2.5 million (not to mention the
additional monthly maintenance costs). And chartering a plane
overrides any cost savings for those making many short trips over
several days because you pay by the day, not by the hour.
Today, a more convenient, and surprisingly cost-effective,
alternative is steadily gaining momentum with small-business owners
and corporate executives nationwide. Known as fractional jet
ownership, the concept is comparable to a vacation resort time
share, minus the limitations: Individuals who fly between 50 and
400 hours annually buy a slice of a business jet and have the
aircraft (or an identical one) available on an on-call basis, any
time, anywhere. The larger your share, the more hours you have at
your disposal. Under a typical plan, the use of a Cessna Citation V
Ultra would cost a company $11,800 for 100 hours, plus $3,600 a
month for incidentals such as fuel, insurance, pilot's salary
and hangar space. There's also an annual $389,000 management
fee. By no means is fractional ownership cheap, but it brings the
once unattainable within reach.
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"We run an on-demand system," explains Richard
Santulli, CEO of Executive Jet Inc., a business aviation service
company in Montvale, New Jersey. "[Owners] can call with as
little as four hours' notice for an airplane at any one of the
5,000 general aviation airports in the country." These
airports extend far beyond the reach of commerical airlines, which
service only 500.
Santulli, a former mathematician, pioneered the concept in 1985
when he was looking into purchasing a private jet. "I realized
it made no economic sense for me to spend $3 million for a jet when
I'd use it only about 150 hours a year," he says. Instead,
he created a way for a group of individuals to share the cost of a
jet yet still retain guaranteed availability of the aircraft. In
1986, he introduced the program with a core fleet of eight planes;
more than a decade later, his company has 115, and service has
extended into Canada and Europe.
The trend has even taken off with American Airlines. Two years
ago, the industry giant launched an affiliate company called
Bombardier Business JetSolutions Inc., which offers a similar
fractional jet ownership program. By 1998, the company expects to
have more than 40 aircraft in its fleet.
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