““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
The little airplane that can
Many business jet charter operators these days are opting to focus on a single aircraft type. The Eclipse 500 has received much publicity because high-profile businesses, such as Boca Raton, Fla.-based DayJet and Concord, Mass.-based Linear Air, have recently launched air-taxi services with that model. But an increasing number of operators are now focusing on another aircraft: the Cirrus SR22.
The SR22 is well known in aviation circles. It has been the world's best-selling single-engine, piston airplane for five years, and in November the combined fleet of Cirrus SR20s and SR22s surpassed two million flight hours--the equivalent of two round trips to the sun. But the thought of using the SR22 for charter is still relatively new and only a handful of U.S. operators have embraced it. Those who have, however, stand by their decision.
Open Air, a Cirrus SR22 charter operator based in the Washington, D.C., and Houston areas, chose the SR22 because of its safety record, and because the lower average cost opens the door to a new group of charter customers. "You're looking at $5,000 per hour for a regular charter flight," said James Cooper, co-owner of Open Air. "An average trip [using the SR22] would be about $500 an hour. And that's for the whole airplane, not per seat." Stratus Alliance, a charter broker that contracts solely with SR22 operators, offers prices starting at $395 per airplane per hour. Such low figures are possible because the SR22, powered by an efficient reciprocating engine rather than a turbine engine, burns less fuel than traditional charter aircraft, according to founding partner Regis de Ramel. "A typical single-engine turbine airplane burns 50 or 60 gallons an hour," he said. "The SR22 burns 15 to 17." The savings make the SR22 an "easy, cost-effective way to get people to at least try charter," he added.
Some operators, such as Lawrenceville, Ga.-based ImagineAir, offer flight-card discounts of up to 20 percent off the base price, which lowers the cost even more. The savings are attractive not only to new charter customers, but also to business jet owners, according to Haroon Qureshi, director of public relations and sales. "It's not worth it for some owners to fire up their Challenger to fly from Atlanta to Hilton Head, [S.C.]," he said. "They can buy a round-trip ticket from us, and it would still cost less than fuel for their airplane."
Businesses also use the SR22 on occasion. "A lot of these companies have their own aircraft," Qureshi noted, "but if only two people are traveling, it might not be worth it for them to fly the company's King Air."
The SR22 is also "a fantastic tool for regional travel," Qureshi said. "Most of our customers use the Cirrus to replace a three- to seven-hour drive," he noted. Stratus Alliance founder de Ramel added that the SR22 "solves that last 200-mile problem. If a customer takes a commercial flight from California to Pennsylvania but needs to get to Albany, N.Y., how can he or she solve that problem?
With these airplanes, we can cover that 200- to 300-mile mission very effectively and for a pretty good price.
"We're hoping to get people out of their cars," he added. "This has been the selling point of charter for a long time. The difference is that we're doing it at a much lower cost."
The Safety Factor
Safety was another factor in the decision of many operators to select the SR22. The founders of Stratus Alliance, for example, believed that the airplane's safety features would mitigate the perceived risk of single-engine airplanes. "A common misconception is that single-engine airplanes with propellers are dangerous," de Ramel said. "Most people don't realize that single-engine airplanes don't just fall out of the sky. Engines don't just quit."
The Aircraft Owners and Pilots Association Air Safety Foundation (ASF) recently completed a study of technologically-advanced aircraft and concluded that the Cirrus-with its advanced cockpit technology and a rocket-deployed 55-foot airframe parachute that can be activated by the pilot or the passengers-"shows improved safety versus the [rest of the] general aviation fleet." Cirrus Design credits the parachute with saving more than 20 lives, and ASF executive director Bruce Landsberg said the aircraft is "phenomenally equipped."
However, Landsberg did note that there have been six fatal Cirrus accidents resulting in the deaths of 10 people since November. The problem, he said, is not the aircraft itself. "There is nothing particular to the Cirrus that is any more dangerous than any other aircraft," he explained. Rather, Cirrus Design has found a market among younger, less experienced private aircraft owners. "These owners are successful, capable people and typically aggressive in what they do in their private lives, and they tend to bring [those traits] into play in their flying decision making. That doesn't always work."
None of the Cirrus accidents have involved commercial operations, Landsberg added. "A commercial operation is completely different," he said. "The pilots have a significantly higher level of experience, and there's a lot more oversight. There's not just one person making a decision, as there is with a private owner."
Another selling point is the SR22's interior. "The comfort level is like that of a Mercedes or BMW," Cooper said. Qureshi said Cirrus designed the SR22 with the passengers in mind. "It has ample legroom, huge windows in the back, and it's very comfortable, even if the passenger is six-foot-three. It's like sitting in the backseat of a Lexus," he added.
"The Cirrus is a neat aircraft," Qureshi concluded. "It's still a niche market, and we've had tremendous success with it. We're up to five Cirrus aircraft now, and we're looking to order another ten."
Jennifer Harrington welcomes comments and suggestions at: