Fractional Ownership News

Private jets: A buyer's market as manufacturers look to fractional model

The effect of the recession on manufacturers of private jets has forced them in to a radical rethink of their business models, with one - Bombardier, the maker of the Learjet - looking to introduce its own fractional jet programme in India.

A year ago, the big three North American manufacturers, Bombardier, Cessna, Gulfstream and Hawker-Beechcraft were so flush with orders that customers were given delivery dates in 2011 and even beyond.

Today in the USA, according to business.in.com, the biggest, dozens of companies are giving up their delivery slots for the planes. To cut losses, some are asking manufacturers to find buyers at prices 20 to 25 percent below original rates. A top-of-the-line craft, once available for $50 million to $52million can be picked up for around $40 million now.

Ravi Menon of Air Works, India's largest general aviation maintenance outfit, is advising customers to buy now. "The market has hit the bottom and is beginning to firm up. We are asking buyers to make their call soon."

Nigel Harwood, CEO of InterGlobe General Aviation, the business aircraft wing of the group that owns Indigo, and representatives for Hawker-Beechcraft, says they are attempting to attract new business with aggressive pricing, and packages with maintenance contracts, financing options and buyback offers. "If a customer is willing to pay now for an aircraft, we are giving them the option to return the plane after a year. We write off approximately 20 per cent of the price."

And Bombardier spokesperson Danielle Boudreau says the company is planning to introduce options like fractional ownership and jet card programmes in India.

06/09/09