Fractional aircraft operator CitationShares is expected this week to announce a major order for Cessna business jets to assure the continued growth of the Greenwich, Conn.-based firm, the company's top official revealed. The order may include the recently certified mid-size Citation Sovereign.
"We will announce an order in the neighborhood of 55 aircraft," Steve O'Neill, CEO and founder told ShowNews before the NBAA convention. At present, CitationShares has a fleet of 50 aircraft. Eight more bizjets will arrive this year; 23 will be delivered by the end of 2005. The fractional company operates the Cessna CJ1, Bravo and Excel and will add the Sovereign later this year.
Commenting on the state of the fractional industry, O'Neill opined, "Today, this industry is as much about jet cards as it is about fractional shares."
In July, CitationShares launched its new Vector JetCard program, which allows individuals and companies to pre-pay for 25 hours of private flight time on CitationShares operated aircraft. CitationShares operates all Vector JetCard flights under its recently obtained FAR Part 135 air carrier certificate.
Although JetCards cost 40% more than fractional shares on an hourly basis, "the cards provide people with an attractive way to test the market out before making a longer term commitment of buying fractional shares," O'Neill explained. Typically, card members have a 12-18-month obligation for JetCard membership versus the five years or longer commitment to obtain fractional shares. There are other reasons to consider JetCards. Card members are not required to provide up front capital and they need not be concerned about residual aircraft values, according to the company's founder.
Concerning the leading fractional players, O'Neill said CitationShares and NetJets continued to show "significant growth" while FlexJet, a division of Bombardier Aerospace, and Flight Options, LLC, an affiliate of the Raytheon Company, did not. Citing data from leading investment bank, UBS, O'Neill said FlexJet is losing nearly two customers for every one that joins, while Flight Options is keeping pace one for one. Much of CitationShares' growth is coming from companies or individuals fed-up with flying aboard commercial airlines, he said.
CitationShares' continued growth has not gone unnoticed by the Cessna Aircraft Company, which along with TAG Aviation USA, Inc. owns the fractional company. Cessna now controls 75% of CitationShares, while jv partner TAG Aviation's share has dropped to 25%.
