'In mid-February, flying picked up significantly,' Ricci says. 'The stock market stabilized, and people began to feel wealthier. At the same time, the airlines' service was degraded as they parked planes, raised their fares, booked flights full, and all without raising capacity.'
Rumors of the death of the fractional model are greatly exaggerated, Ricci believes. He cites two years of profitable operations during a down period as proof. Ricci believes the rationale for creating cards was as a back-up for fractionals. 'If there are no fractional sales, sell cards, but if you're selling fraction shares, dial back on the cards,' he says.
He compares the fractional vs. cards situation to the airlines' selling unbooked seats at a discount to avoid flying with unsold capacity on the theory that something is better than nothing. 'But then those [discount] seats grab more and more of the program,' he says.
(photo courtesy Nextant)
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Nextant will upgrade Flight Options' Hawker 400XPs with Williams FJ44s, Pro Line 21, and nacelle/mount improvements.
The company is re-hiring some furloughed pilots and tripling its advertising, Ricci says.
The most important problem for all companies in the arena in which Flight Options competes is financing, and with the exception of NetJets, it's impossible to finance 200 to 300 aircraft. 'We know Marquis had a pricey product but a good reputation, and if they couldn't survive, a card be a success on a large scale,' Ricci says.
'We use the card for about 20 percent of our flying. We're phasing out the Hawker 800s from the fleet as those contracts expire, but they don't all expire perfectly, like all on December 31st, for example. Some have two or three years to go, so we promote card sales on that,' he says. 'On the [new] Phenoms, we have a waiting list, so there are no card sales.'
Flight Options has approximately 1,300 members served by a fleet of 102 aircraft comprised of 56 Hawker 400XPs, five Phenom 300s, 21 Hawker 800s, 14 Citation Xs, and six Legacys.
Ricci also disclosed some plans for 2011, which include converting the 400XPs by putting them through the Nextant program, which upgrades the cockpit to Rockwell Collins Pro Line 21 avionics, re-engines with the Williams FJ44-3AP, and reworks nacelles and engine mounts for improved aerodynamics. 'We'll get five this year, so we're selling into that,' Ricci says. The company is also exploring a midsize-cabin replacement for the 800s as part of its long-term fleet improvement plan. And at the end of April, Ricci anticipates announcing a financing deal that could total $200 million, which they'll convert into a membership program with a three-year commitment.
Ricci claims no favorites among the candidate aircraft out there. 'I'm as happy with an airplane as my customers are,' he says, laughing."
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