Small Fry

Business Jet Traveler » June 2011
Small operators don’t have as many resources as the big-four providers to hel
Wednesday, June 1, 2011 - 5:00am

You're probably familiar with the four operators that dominate the fractional-jet-share business: CitationAir, Flexjet, Flight Options and–the biggest of the big, with more than half the market–NetJets. But if you're shopping for a share, those aren't your only choices.

Clearwater, Fla.-based Avantair and Portsmouth, N.H.-based PlaneSense are increasingly noteworthy players. And there are many others, such as Kansas City, Mo.-based Executive AirShare and Canada's AirSprint. For helicopters, there's Newark-based HeliFlite Shares as well as Sikorsky Shares, whose headquarters are in Wappingers Falls, north of New York City.

Should you sign on with one of the smaller fractional providers instead of one of the big four? Perhaps, but not until you understand what you're getting into.

First, the good news. While the major fractional-share providers certainly strive to offer personalized service, it's conceivable that you'll be less likely to be seen as just another customer by a company that has relatively few of them. Moreover, the small outfits may be able to get you to your destination for less money than the majors.

But you pretty much get what you pay for: While the biggest providers offer a variety of models and the ability to upgrade or downgrade to a different class of aircraft for each flight, the smaller ones typically manage to charge less by featuring only a limited selection of turboprops and light jets. While NetJets operates about 500 aircraft and more than a dozen models ranging from light to large-cabin jets, for example, Avantair offers only about 55 ­airplanes, all of them Piaggio P180 Avanti twin-engine ­turboprops, and PlaneSense exclusively features the ­Pilatus PC-12 ­single-engine turboprop, of which it recently had 34. If those aircraft don't suit your needs for all your flights, you're out of luck.

You may also be out of luck if the company you choose doesn't offer the range or flexibility you want. While the large providers make aircraft available throughout the U.S. and on short notice and may even have reciprocal arrangements that let you fly in other parts of the world, the smaller ones often operate only regionally and require you to book flights further in advance. If their relatively modest-sized fleets can't always accommodate demand, moreover, they may rely on charter operators to supplement them, which could affect quality. So consider carefully how well an operator's offerings match your flying needs, and, if possible, solicit feedback from several of its current customers.

Pay particular attention to how well the fractional provider is run because small operators frequently lack the track records of the big four and also generally don't have as many financial resources to help them ride out hard times. As a result, losses can quickly spiral out of control, leading a company to go under. One recent example: Reston, Va.-based OurPlane, which once had about two dozen aircraft to serve customers in the U.S. and Canada, declared bankruptcy last October.

The possibility of such a failure means you need to do even more homework before signing on the dotted line than you would with one of the majors. Investigate the backgrounds of the people managing the company. Find out whether its pilots are full-time employees and what training standards they meet. Inquire about whether safety inspections have been conducted by ARG/US or Wyvern, the leading industry auditors, and ask to see the results. And by all means, scrutinize the company's financial health and business plan.

That may sound like lots of work, but those who skip these steps could pay a steep price. Consider the story of JetChoice, a fractional provider based in the Minneapolis/St. Paul suburb of Little Canada. Founded in 2003, the operation grew quickly and had about 100 employees and 35 aircraft by the fall of 2008. But then, as the economy tanked, revenues began declining rapidly. In May 2009, two JetChoice-related companies filed for bankruptcy, listing assets of $6.8 million and liabilities of $39.2 million. JetChoice investor Jerry Trooien subsequently sued company founder David Kloeber for $4.5 million in unpaid rent and loan payments and Kloeber countersued for $2.5 million. Then this past October, Trooien filed for bankruptcy, listing debts of $284 million.

Left in the lurch by this meltdown are dozens of laid-off employees and numerous fractional shareholders, some of whom are owed many thousands of dollars that they'll likely never see. As desk sergeant Phil Esterhaus used to tell his troops on the 1980s TV cop show Hill Street Blues, "Let's be careful out there."

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