Cessna and TAG Team on Fractionals,
Establish 50:50 CitationShares Venture

This may be the last year you can stop by the Cessna booth at NBAA and learn about the firm's new CitationShares fractional ownership program. At NBAA 2001, if all goes well, CitationShares, a new joint venture with TAG Aviation USA, will have its own display.

It could be a large display, if the plan to offer new jet aircraft at the lowest entry price in the business is successful. CitationShares has ordered 50 Cessna Citations, a mix of CJ1s and Bravos. Several are already in hand.

Cessna Aircraft Company, a unit of Textron, this past summer disclosed its purchase of a 50% share of TAG StarShares Holding, and said the new partners would change the name to CitationShares. Target: the eastern United States.

"We are convinced that we have the right aircraft products and the right team to provide the level of service that will ensure the success of CitationShares," said Cessna CEO Gary Hay. "We have studied this market and believe that the ideal opportunity has presented itself as we join forces with another outstanding company," he said in reference to TAG.

The two firms' $20 million joint venture, CitationShares Holding LLC, is based at the Westchester County Airport in White Plains, NY. Steve O'Neill is CEO, having held that job at TAG StarShares. John Hall is CitationShares sales and marketing VP.

CitationShares is offering low prices by offering two of the more modest Cessna jets. CitationShares customers can buy fractions as small as one-sixteenth.

The Citation CJ1, which was certified and the first delivered earlier this year, sells for $3.7 million. A one-eighth share from CitationShares is priced at $522,125 with an operating cost of $995 per hour and monthly fee of $6,770. The five-passenger CJ1 has maximum cruise speed of 437 mph and range of 1,697 statute miles, says CitationShares.

The Citation Bravo is priced at $5.2 million. A one-eighth share from CitationShares is priced at $707,125 with an operating cost of $1,100 per hour and monthly fee of $7,292. The seven-passenger Bravo has maximum cruise speed of 463 mph and range of 2,300 statute miles, says CitationShares.

All CitationShares aircraft are equipped with TCAS and GPWS, EFIS, and AFIS for ease of communication. They are all completed by Cessna: "The factory owns half the business," O'Neill notes. Cessna gets all the maintenance work too.

"Future CitationShares product offerings of other Citation models will be considered in response to market demand," the company says.

For now though, it's sticking with the two lower-end models. Cessna CEO Hay said this past summer that Executive Jet Aviation's Richard Santulli was consulted prior to the CitationShares launch. His NetJets program includes six Citation models, with the Bravo (or S-II) common to both fractional operators.

Predecessor fractional operator TAG StarShares (known before that as Wayfarer Aviation) had specialized in shared-ownership King Air turboprops. StarShares targeted the leisure and weekend market out of White Plains, which is just north of New York City. CitationShares inherits four King Air B200s and two C90Bs. StarShares customers are now being supported by CitationShares, with the King Airs to be phased out and offered for sale over five years.

"All existing King Air customers will be given an option to transfer their hours to jets," says O'Neill. "We've decided not to continue selling (the King Air shares)," he told Show News.

CitationShares will bring at least one aircraft to NBAA 2000. Or, rather, the aircraft will bring CitationShares. "We are low-profile," says O'Neill. "We're using it for transportation."

That may be, but watch after New Orleans for a new CitationShares advertising campaign.