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NetJets Card Targets Big Companies
Aviation Week & Space Technology
06/21/2004, page 76
Michael A. Taverna
Le Bourget and Geneva
NetJets Card Targets Big Companies
A new product from NetJets Europe reflects the all-out effort being
undertaken by charter operators to woo airline travelers and make
business flying available to a broader public.
NetJets recently unveiled a prepaid corporate service that will
allow users to buy charters in increments of as little as 25 hr.
and to gain guaranteed access to an aircraft from any point in Eastern
or Western Europe within 10 hr., with no additional charges. Called
the NetJets Corporate Card, the service will cost from 115,000 euros
($140,000) for a seven-seat Citation Bravo to 340,000 euros for
an ultralong-range Gulfstream V, with the Citation Excel, Raytheon
Hawker 800XP, Dassault Falcon 2000 and Falcon 2000EX and Gulfstream
IVSP priced somewhere in between. Additional increments can be purchased
in 5-hr. blocks, with no upper limit.
NetJets Europe CEO Mark Booth said the new service is aimed, in
particular, at big corporations like IBM and Ford, which don't want
to be bothered with the widely varying fiscal, accounting and other
rules related to business jet use in Europe, and are willing to
pay a small markup (15% above standard charter rates) for a reliable
one-stop source of supply. "We think it will revolutionize
business travel," he said, noting that more than 110 cards
had been sold already, and at least 250 are expected to be spoken
for by year-end.
Booth said the Corporate Card, which was initially sold by Marquis'
European arm, acquired early this year, resulted from an ongoing
examination of ways to meet the specific needs of European business
travelers, for whom fractional ownership is not always as attractive
as in the U.S. He says the initiative represents an effort to diversify
NetJets' base away from fractional activities, which still account
for more than 80% of revenues, rather than an indication that this
business is slowing down.
On the contrary, he said, NetJets expects to sell 15-20 complete
aircraft this year and to have 550-600 fractional owners by year-end,
compared with 400 at the end of 2003. It plans to add 20 aircraft
to its 45-unit fleet this year, including its first Gulfstream V
and Falcon 2000EX models. Its first Gulfstream IVSP, recently delivered,
is already sold out, he says, as are its Hawker and Excel lines.
"[Frax] growth is really extraordinary; right now we are chasing
inventory," he said, predicting the European operation would
be making money by next year.
Nevertheless, most operators are betting on charter concepts as
they race to capture new customers, including former Concorde clientele.
Interest in scheduled executive shuttle/VIP services is on the rise,
and several companies, among them Air Partner, are planning to roll
out block charter programs of their own. NetJets' main rival, FlexJet
Europe, recently trotted out a fixed-price transatlantic charter
service to go along with its flat-rate 25-hr. block-hour and online
by-the-hour offerings (AW&ST May 31, p. 73).
Bombardier FlexJet Managing Director Judith Moreton said the online
Skyjet service is proving popular with first-time users and existing
members of its North American FlexJet program. Moreton said more
than 100 regular customers had signed up so far to use its 59-aircraft
European fleet, and were flying some 5,000 hr. a year. She indicated
that the unit had "exceeded its bottom-line target in 2003
and expects to do likewise this year," and predicted it would
break even by 2006.
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