On the Record with
STUART ORAN, PRESIDENT & CEO, UAL CORP.'S UNITED BIZJET HOLDINGS


United Pledges Top-Notch Frax Services

United Bizjet Holdings has made major waves this year, not just with its heavyweight entry into the business of fractional ownership programs with $4 billion of bizjet orders, but because it is owned by UAL Corp., parent of United Airlines.

The Chicago-based company (which will announce its official name in the near future) has placed orders and options on 185 Falcons and Gulfstreams, and plans to buy smaller aircraft too, aiming to have a fleet of as many as 250 by 2005. It may also launch a corporate shuttle program using larger jets.

The UAL Corp. move into fractionals, says NBAA president Jack Olcott, is "the ultimate validation of our role in the national transportation system." It is, he told Show News, "a tremendous validation of business aviation."

"We are going to establish a luxury brand," says UBJ president and CEO Stuart Oran, offering "the highest possible level of product quality and service." UBJ will offer the most luxurious and business-friendly service in the fractional field, he says. Oran is a former senior VP for international affairs with UAL; he is now focused on the North American market.

The new fractional provider is talking intensively to potential customers, although serious order-taking won't commence until later this autumn, Oran says. UBJ operations will start in April 2002, with four to seven aircraft.

Pilot hiring, looking ahead to a cadre of about 1,000 when the UBJ fleet is at full strength, will get underway in earnest in the near future. UBJ figures to have about 100 pilots on the payroll when it starts service next spring.

UBJ's initial 100-Falcon order comprised a mix of 30 Falcon 2000s and 2000EXs, and 10 Falcon 900EXs firm, with options on 10 additional 900EXs and 50 more 2000EXs. The parties are discussing an additional order for 25 firm and 25 option Falcon 50EXs, and firming of some Falcon options, although this might now depend on the recovery of airline fortunes after the terrorist attacks on America.

UBJ has also ordered seven Gulfstream IV-SPs and five Gulfstream Vs, with options for nine GIV-SPs and 14 GV-SPs. The total value of the UBJ order and options is approximately $1.25 billion, Gulfstream says.

Oran says he expects to be buying smaller aircraft from at least one more manufacturer, and that travel on the Boeing BBJ or Airbus Corporate Jetliner may eventually be offered on a UBJ corporate shuttle basis.

He declines to say whether he was rebuffed in early efforts to acquire Bombardier aircraft for the UBJ fleet. Bombardier has only recently reversed a policy of not selling to operators that compete with its own Flexjet fractional program.

All UBJ aircraft will be equipped with TCAS and enhanced GPWS, and their interiors furnished with top-of-the-line amenities and the best available communications and work-facilitating technology, Oran says.

UBJ aircraft completions will be done by the manufacturers.

UBJ will have no special arrangements with United Airlines for maintenance and other services. "We are not going to be doing any of the maintenance in-house. It is more effective to have service done by OEMs and line maintenance done by FBOs," he told Show News. "UBJ is a UAL Corp. investment and, although a sister company to United Airlines, is a completely separate entity."

UBJ, he says, has been busily hiring "heavy hitters" for its new fractional team. Besides Oran, staff include Tom Davis, executive VP and COO; Don Strench, senior VP and CFO; Bob Beleson, marketing chief; Noell Michaels, senior VP for sales; and Steve Fushelberger, marketing communications VP.

As to whether UBJ will be able to crack a market that already has half a dozen established players, and where observers are predicting an inevitable downturn, Oran promises to be competitive "in everything." And the fact that UBJ is a totally new, unknown name? "So was Lexus," he says.

-Rich Piellisch