Fractured Fractionals

Fractional aircraft ownership programs - whereby customers/owners typically buy a "share" of the aircraft via a five-year management contract with guaranteed availability of aircraft - have now been around for some 25 years. While industry pundits continue to debate their true value proposition, the popularity and viability of this business model is no longer in question. In fact, the fractional industry has remained relatively robust, even with the continuing lackluster economy. Still, on average, companies that offer shared aircraft ownership programs have had a difficult time in forecasting demand and maintaining profitability. This is not quite the scenario imagined by NetJets founder Richard Santulli - who, when he first introduced the fractional concept, envisioned thousands of jets owned by tens of thousands of owners - but it shows that the industry is here to stay. Here are some updates on a few of the major players in the fractional space...

The Guy with the Dragon Tattoo

OK, it is not really a tattoo, but Jackie Chan just got a brand new Legacy 650 private jet from Embraer with dragons emblazoned all over the airplane. Seriously? Having a sleek, new, state-of-the-art executive jet that can go roughly 4,000 miles on one tank of gas should be cool enough, but dragons? Jackie has always been THE MAN but he has just taken things to a whole new level...

Imagine flying this to the next Super Bowl!

The best part of the story is that Jackie was given the $30 million dollar airplane from the manufacturer in exchange for him promoting the Embraer brand in China and other global markets. So, there you have it - the action superstar turned private jet ambassador will now be using his charm to sell private jets for the world's third largest commercial aircraft manufacturer. (Boeing is still the largest with Airbus holding the number two spot.)

Why is this man smiling?

"This delivery is a moment of historical importance to Embraer because it solidifies an already long and successful relationship between China and Embraer," said Ernest Edwards, president of Embraer's Executive Jets unit.

By most accounts, this was a great move by Embraer - a company that is looking to dominate the private jet market, from entry-level to ultra-large aircraft. Hey, if I had $30 million collecting dust, I would certainly buy a Legacy 650. I mean, who could resist the charisma of such a huge cultural icon? If Jackie's pitch does not work, just make sure the prospect sees the tail of his sweet new ride. Talk about a closer!

Spotlight Review on PlaneRed Airline

Plain and simple, PlaneRed Airline is worth watching. I just signed-up on their mailing list, and this quote is directly from the PlaneRed welcome email...

"Our goal is to revolutionize the way we fly. We don't think you need to get undressed to get on a plane. No more buying outrageously priced tickets. No more lost luggage. No more middle seats in a cramped cabin. And don't you think you deserve to always fly first-class? We certainly do. Simple and comfortable all-you-can-fly travel will soon be a reality."

This certainly sounds like an idea that could actually work. Here is a video of PlaneRed CEO Wade Eyerly discussing some of his specific plans.

The company's website (basically a launch page as of this writing) envisions an "All-You-Can-Fly Membership" that will be simple, first class, no hassle and, by most accounts, a much better alternative to the current TSA process experienced at major airports. All this for less than a grand per month! At minimum, do a Google search on PlaneRed. There is some great buzz on the company from some great publications. Who knows. They might actually be on to something BIG.

Spotlight Review on JetSuite

Of all the new players in the constant-changing world of air charter, an operator by the name of JetSuite seems to have put together a product offering that is truly innovative and ground-breaking. Sure, other companies have made claims about making air charter more affordable, but at $999 one way on some flights for the entire airplane, JetSuite definitely appears to be "walking the walk". If that weren't enough, one can also take advantage of last minute empty leg flights offered by the company for as low as $499. This is all happening in the context of an economy that continues to struggle. One has to wonder if this type of business model will be sustainable. (That's another way of saying, better get while the getting is good!)

Surprisingly, the keys to JetSuite's apparent success seem very straightforward - use of a modern fleet (Embraer's Phenom 100), a limited service area (US West Coast) and smart marketing and promotion. Still, espousing a strategy and successfully executing it are two different things. This company is definitely worth a closer look.

One of JetSuite's Phenom 100s - gotta like that red stripe!

Virgin Galactic et al Continue To Make Progress on Space Tourism Goal

While still a couple of years from commercial launch, Richard Branson and his Virgin Galactic space flight company continue to make steady progress towards their goal of taking tourists into space. Just recently, a BBC journalist was given an exclusive first look inside the spacecraft.

Despite the cramped space, Virgin claims to have deposits from 400 customers who are willing to shell-out $200K each for the two hour flight that will include at least five minutes of weightlessness. And, the view from what is essentially the Kármán Line and 62 miles above terra firma? It promises to be spectacular for those willing to make such a large gamble, both in terms of cost and the inherent risk associated with space flight.

Of course Virgin is not the only company looking to exploit the final frontier. Their space initiative seems to be just the tip of the proverbial iceberg...