Halogen Guides Jets | The Insider's Guide to Private Aviation

How to Travel in Space

2008-10-09T17:13:28Z

The next frontier for the ultimate globetrotter? Space. Once you’ve crisscrossed the seven continents, there’s only one place left to go: up.

Thanks to a group of innovative companies developing new space vehicles, the approaching wind down of NASA’s shuttle program and a Russian space program that welcomes civilian travelers, space tourism is poised to become the next extreme travel niche.

So what trips can be booked now, and what’s likely to remain a sci-fi fantasy? Our new guide, How to Travel in Space, covers all the latest developments in this fledgling industry, from Virgin Galactic’s recent advances to gravity-free treks from space travel agent Space Adventures. Check out the key space travel companies to watch, learn about what it takes to go into orbit and find out just how much lifting off for a weightless vacation will cost you so, well, you can start saving. Nothing makes private jet travel look more affordable than heading into the great beyond.

New Jets Roll Out Amid a Tempered Outlook for Private Aviation

2008-10-09T10:06:51Z

The National Business Aviation Association convention, the biggest annual gathering of the private jet industry, wrapped up in Orlando this week. Despite the deepening economic crisis and a dip in demand for private jet travel, news from the jet industry was for the most part, upbeat, as jet makers debuted new aircraft models and initiatives. Here are the highlights.

Major industry forecast calls for a dip in jet deliveries in 2010 and 2011

According to Honeywell Aerospace’s 17th Business Aviation forecast:
• About 1,200 business jets will be delivered this year, 15% more than in 2007.
• Deliveries will continue to rise in 2009, topping out at 1,300 – 1,400 jets.
• Deliveries will dip in 2010 and 2011, primarily because new jets ordered this year, like the Gulfstream G650, won’t be airborne until 2012 or beyond.
• International orders will make up 45% – 55% of new aircraft purchases estimated over the next five years.
• Sales of new jets to fractional providers have remained flat since 2004, while jet cards and charter operators continue to increase demand for new aircraft.

Gulfstream debuts its super mid-sized G250

Gulfstream announced its newest model, the G250, that will roll off the assembly line in 2011. While the G250 will have the same basic fuselage as the G200, the new model will be more fuel-efficient and have more cabin space and a larger bathroom than the G200.

The G250 is Gulfstream’s second new jet unveiling this year. In March, the company announced the G650, a long-range jet that despite its $56 million price tag racked up a huge backlog of orders.

Hawker gives the 450XP a makeover

Hawker Beechcraft is upgrading the cabin on its 450XP jet and adding new engines to boost the jet’s fuel efficiency by 10%. The $7.7 million light business jet will debut in 2010. Hawker says the 450XP is the most commonly used aircraft model among fractional providers.

Bombardier Aerospace introduces the Learjet 85; stays positive about industry prospects

Bombardier showed off a full-size mockup of the interior of its midsize Learjet 85, an aircraft designed with a lighter composite material meant to improve flight and fuel efficiency. The aircraft will have the largest cabin space of any Learjet model.

Production of the new jet recently hit a snag when Grob, a German company handling the aircraft’s structural design, filed for bankruptcy. Bombardier still hopes to deliver the first jet by 2012 as planned.

Though company executives expect a slight softening in the market through 2010, their long-term outlook is positive—they say Bombardier will maintain a 33% share of the market.

Flexjet goes green

Fractional jet provider Flexjet announced that it’s created a new voluntary green initiative—owners can now pay an hourly fee to offset the carbon output of their flights. The company will offset any non-owner flights, such as trips made for maintenance purposes. Flexjet teamed up with carbon-offset provider Climate Care, which invests in projects around the world, including a wind-power farm in China.

Embraer CEO Concedes Credit Crunch is Making it Harder to Purchase Planes

2008-10-02T15:09:53Z

In a sign that the financial crisis is impacting the private jet industry, the CEO of Brazilian aircraft manufacturer Embraer concedes that tight credit markets are making jet purchases difficult for some buyers. “Some customers have said they are facing more difficulties in financing,” said Embraer CEO Frederic Curado, in an interview with Bloomberg last week. “But we haven’t seen any impact on our business.”

The current crisis nearly claimed one of the biggest players in aircraft finance. AIG, which was rescued from collapse by the U.S. Treasury Department, is the parent company of International Lease Finance Corporation (ILFC), one of AIG’s few profitable subsidiaries.

In spite of the economic slowdown, Embraer remains on track to deliver 215 planes this year. However, many of those orders were made when loans were easier to secure. Given in the current credit crunch, next year’s deliveries may be impacted.

Private Aviation May Not Have to Worry About "Paris Hilton Effect" Anymore

2008-10-01T16:03:51Z

Earlier this year representatives from the industry complained about the “Paris Hilton effect,” the popular perception that private jets are playthings for the spoiled rather than essential business tools. It looks like that problem may be on its way to being solved. Heiress, socialite and “actress” Paris Hilton has taken a vow to “never fly in a small plane again,” after her celebrity friends, musicians Travis Barker and Adam “DJ AM” Goldstein, narrowly escaped death following a plane crash in September.

Barker and Goldstein were the only survivors when their Learjet 60 bound for Los Angeles crashed on takeoff from Columbia Metropolitan Airport in Columbia, S.C. Four others, including the plane’s pilots perished in the crash. Cockpit voice recorders show that the pilots believed one of the plane’s tires had blown as the jet sped down the runway. Barker and Goldstein, who each suffered substantial burns, have been released from hospital.

Hilton told TeenHollywood.com, “I couldn’t believe it … I’m scared to go on small airplanes now … I’ve been on that sort of plane and now I’ll never go one again.” We suppose that it wouldn’t help to tell Hilton that the Learjet 60 has, apart from last month’s incident, an admirable safety record. The blown tire which the National Transportation Safety Board believes caused the crash could happen to any aircraft, regardless of size. And of course, private aviation is still significantly safer than driving drunk down the Sunset Strip in Los Angeles, as Hilton did in 2006.

Queen Elizabeth Planning Jet Purchase, But is her Budget Big Enough?

2008-09-30T15:43:03Z

UK tabloid the Sun is reporting that Queen Elizabeth II has commissioned four of the world’s major private jet manufacturers to submit interior designs for an official royal aircraft. The Queen has been allotted a budget of £7 million (roughly $12.5 million).

With security concerns making commercial aviation out of the question, the royal family relies on private jets for transportation. Last year UK taxpayers shelled out just under $10 million for the royals’ charter flights. While some anti-monarchist types probably won’t be too pleased at the prospect of footing the bill for this new royal jet they should take heart that the Queen appears to be coming in under budget; in June of this year, the UK Department for Transport approved the use of as much as £10 million of public funds for the purchase of a royal jet.

The Queen reportedly wants a jet with room for 13 people, but one wonders whether she’ll really be able to get all that much plane for $12.5 million. She can forget about the high-end. A new Gulfstream G450, with intercontinental range and seating for 19, goes for around $49 million. The comparable Global Express runs around $45 million, and the Falcon 7X is about $50 million. At $21 million, even the appropriately named Citation Sovereign would seem to be outside of the Queen’s budget. Is her majesty planning on buying used or could she be considering a fraction perhaps?

What plane do you think would be the best fit for her highness’s budget? Weigh in with your comment.

Wall Street Journal's Robert Frank on Glut of Used Jets

2008-09-29T17:03:26Z

The Wall Street Journal’s Robert Frank reported in his Wealth Report blog last week that the market for used private jets has been flooded in the last year. Halogen Guides reported on the phenomenon earlier in September, when J.P. Morgan analysts reported a 52 percent increase in used private jet inventories in the U.S. Now Rich has found that the problem is even more acute for one of the most prestigious private jets, the Gulfstream GIV.

The number of GIVs for sale this July was more than triple the number on the market last summer. These jets aren’t exactly flying off the shelves, so to speak, either. GIVs are averaging 212 days on the market, compared to 168 days last year.

While these numbers, along with reports of decreased charter demand, are enough to have executives in the private aviation industry passing the Maalox around, it is worth noting that they don’t take into account the financial crisis that is currently gripping the markets. Not only are financial firms, historically some of the most frequent users of private aviation, likely to cut back jet use even further, but the credit crunch is going to make it much more difficult for interested jet buyers to secure financing.

Manufacturers are likely hoping that global demand will help them weather what increasingly looks to be a prolonged recession in the U.S. While there may be plenty of Middle Eastern sheiks, Russian tycoons and Asian magnates clamoring for the latest and greatest Gulfstream or Global Express at the high-end of the market, the industry as a whole cannot look to a small crowd of plutocrats to see them through these hard times.

Readers weigh in. If you were at the helm of a private aviation firm, what would you do to stabilize business? What do today’s private fliers need from the industry? Leave a comment below.

Jet Republic to Challenge NetJets in Europe

2008-09-26T15:53:04Z

A strong challenger to NetJets on the continent appears to have emerged as Jet Republic has placed an order for 110 Learjet 60XRs. The order is the largest ever European business jet order, valued in excess of $1.5 billion. The Portugal-based Jet Republic received substantial financial backing from an Austrian private bank, European American Investment, to complete the order which breaks down into 25 firm orders and an option for 85 more.

With Jet Republic’s first Learjet 60XRs arriving late next year, the company intends to launch a charter card service through partnerships with a variety of European operators in the meantime. The company has announced that it will begin to sell fractions in its just ordered planes as soon as the end of the month.

It’s unlikely Jet Republic will unseat NetJets anytime soon. NetJets Europe offers fractions in some ten aircraft models in every major private jet category. But Jet Republic, by organizing its operations around just one aircraft model, could realize significant efficiencies, with regards to pilots and servicing. With the market for private jet travel in Europe expected to expand greatly in the years to come, it’s likely that Jet Republic will be able to carve a sizeable niche with this investment.

Economic Hard Times Contributed to DayJet's Demise

2008-09-23T16:10:36Z

Dayjet we hardly knew ye. The pioneering air taxi service announced on Friday that it was grounding all but one of its fleet of Eclipse 500 very light jets (VLJs) and firing most of its employees.

In a statement released to the press, DayJet’s CEO Ed Iacobucci blamed the demise on the worsening credit crisis, which hampered the company’s ability to finance its expansion. DayJet, which started operations in the southeastern U.S. late last year, had ambitious plans and an innovative business model that some industry watchers considered the wave of the future.

Indeed DayJet looked to be on solid footing as the company’s offering of inexpensive point-to-point on-demand flights initially garnered a good deal of demand. When its ascent stalled in May, after it was unable to secure adequate funding, DayJet was forced to scale back its operations.

Unfortunately for DayJet, its fortunes seem to be tied to those of Eclipse Aviation, the manufacturer of the Eclipse 500, which DayJet selected for its operations. In 2007, DayJet had a firm order for 237 of the jets, but Eclipse was never able to keep up its schedule of deliveries. In a statement, DayJet cited Eclipse’s “failure to install missing equpment or functionality or repair agreed technical discrepancies in accordance with the terms of DayJet’s aircraft purchase contract” as a contributing factor in the company’s demise.

Eclipse has had its own problems. After failing to meet production targets, it was forced to sell itself to a European investment concern and it also faced a Congressional inquiry into its F.A.A. certification.

Eclipse announced today that it secured a deal to manufacture Eclipse 500s in Russia, after firing roughly a third of its workers in August. While that deal may secure the VLJ manufacturer for now, DayJet, the most visible operator of its planes, will likely vanish. Iacobucci has stepped down as CEO, though he remains on the company’s board. DayJet’s chief financial officer John Staten steps into the CEO role as the company ponders its future.

Yet Another Reason to Fly Privately

2008-09-22T15:50:04Z

Just for fun, I often ask commercial air travelers how they enjoy their flights. Turns out, they’re not having fun at all.

Here are some recent comments:

“I’m not doing that again.”
“There’s got to be a better way.”
“A complete mess.”
“What an ordeal. It took me days to recover.”

Recently released statistics for 2007 bear out these complaints:

➢ 20% of travel time is spent in delays at the gate, in taxi lines and circling the airport, at an annual cost of $41 billion.
➢ 30% of all flights (1.6 million flights in all), were delayed at least 15 minutes. (This does not include time spent waiting in security lines and at baggage claim, or the fact that the airlines have quietly increased projected flight times so that the numbers won’t look so bad.)

All in all, airline passengers are more dissatisfied than at any time since 2001.

Once an elegant experience, flying today is more akin to traveling in a cattle car. Legroom has been eliminated and new checked baggage charges have lead passengers to stuff more and more into their carry-ons. The result—you’re cramped into less and less space; indeed, you may experience your seatmate in a way you probably don’t know your best friend.

Passengers, feeling like they’re treated disrespectfully by security personnel, ticket agents and flight attendants, in turn tend to leave their manners at the gate. Flight attendants report passengers attending to personal hygiene matters in flight (don’t ask!), leaving chewed gum on seats, and stuffing seat pockets with all kind of debris (including dirty diapers).

If all that isn’t bad enough, now the airlines are eliminating flights and retiring aircraft, further restricting the flexibility of an air travel system that is already stretched to the breaking point. Thus, when weather or equipment problems cause flight delays, whereas you used to be able to hop on the next flight, now it may be a day or two before you can find a seat, leaving you stranded and with a feeling of anger and helplessness that sparks a kind of “road rage” we hear about more and more, as cranky passengers and crankier airline personnel face off in venting frustrations that neither has caused and neither can remedy.

Contrast this nightmare with flying on a private jet. You fly where you want to fly, when you want to fly and with whom you want to fly. You fly direct (not through the airlines’ arbitrary hubs). No long layovers. No redeyes. No lost luggage. No intrusive searches.

You fly on a clean, well maintained and safe aircraft, with a pilot who’ll even help you with your luggage. Catered meals and drink of your choosing await you; there’s internet and phone service and, perhaps most importantly, a comfortable seat with plenty of legroom.

Many clients come to us for the first time after they’ve reached the breaking point with the airlines. I can’t tell you how many calls we get from new clients who say, “I just had a horrible experience with the airlines. I’m not doing that again. What are my options?”

As private air travel advisors, we analyze your needs and budget and go out into the marketplace to find you the best private air travel options—whether it’s a one time charter flight, a 25 hour jet card, a fractional share, or a combination thereof. In all we do for our clients, our goal is the same—find the best price for your flights with an experienced operator on well maintained and appropriately equipped aircraft flown by top notch pilots—all with an impeccable safety record.

In leaving the airlines behind, our clients find that the sense of civility and peace of mind that comes with private jet travel is priceless. As one client summed it up, “Flying privately used to be a luxury, but today it’s a necessity.”

James Butler is an attorney and the chief executive officer of Shaircraft Solutions LLC (www.shaircraft.com), based in Bethesda, Md. Shaircraft advises individuals and businesses with respect to the full range of private air travel investments, including fractional ownership, jet card programs, air taxi services and charter, and also specializes in fractional share valuation disputes.

Night Falls for DayJet?

2008-09-19T15:02:22Z

According to AINonline, air-taxi operator DayJet grounded its entire Eclipse 500 very light jet fleet this afternoon due to “economic reasons.”

The exact reason for the grounding is still unknown. However, in May the company was forced to significantly scale back its operations after it failed to secure an expected round of funding. It’s not clear yet if DayJet plans to resume operations.

DayJet, which serves the southeastern U.S., was one of the first air-taxi services. When it launched, the company was touted as a potentially revolutionary force in the aviation industry. The shuttering of DayJet comes on the heels of a Congressional probe into alleged certification irregularities of the the Eclipse 500, the only aircraft model in the DayJet fleet.

Are we witnessing the death of the VLJ dream? Sound off in the comments and share your opinion.

Bloomberg Markets Magazine Questions Charter Safety

2008-09-19T14:24:14Z

An article appearing in the October 2008 issue of Bloomberg Markets magazine has succeeded in causing a fair amount of consternation among the private aviation community. The article by Seth Lubove, titled “Flying Blind”, alleges that a lack of charter broker regulation is linked to some of the accidents that have occurred aboard on-demand charter flights in recent years.

Charter brokers do not operate flights but instead arrange travel for customers through a network of charter operators. Lubove points to the crash of a Challenger 600 on takeoff from Teterboro Airport in 2006 as an example of how the current system can go awry. In the incident, a flight brokered through Blue Star Jets was operated by Platinum Jet Management through a license it had borrowed through another operator, Darby Aviation.

Charter brokers who organize flights through subcontractors without performing the proper due diligence are, of course, a major cause for concern. Lubove believes that the answer to the safety issues in the charter industry is greater government regulation. However, trends in the on-demand charter industry may render his argument for more regulation, moot.

The emergence of online charter marketplaces, such as Virgin Charter, which cuts out charter brokerages altogether and allows customers to book directly with an operator, and the establishment of independent charter safety auditors such as Wyvern and ARG/US, encourage the open market to improve safety. Fliers can easily consult these services for comprehensive assessments of planes, pilots, and crews on prospective charter flights. If an operator has a poor safety record, a flier can take their business elsewhere.

Fliers look to charter flights for the comfort, convenience, and, most of all, flexibility that is unavailable in commercial aviation. It would be a shame to see the charter industry, which is just beginning to branch out to a broad customer base, encumbered by excessive and, perhaps unnecessary, government regulation.

What do you think about government regulation and the charter industry? Share your opinion in our comments section.

Fractional Jet Primer: Navigating the Contracts

2008-09-18T15:38:10Z

Once you’ve decided to purchase a fractional share, you’ll receive a set of contract documents from your provider. Your salesperson will do his best to convince you that everyone signs the same simple contract. The contracts are short and are made to look like standard “boilerplate.” Don’t be fooled. These documents govern your rights and obligations with respect to what most likely will be a multi-million dollar investment, and they are negotiable. Here’s a brief primer that describes the critically important documents and what they mean to you:

Binder/Deposit Agreement

If your provider is awaiting delivery of your aircraft, it’ll want you to put up a deposit to hold your share. This document should identify the specific aircraft in which you’re buying the share, guarantee that the pricing won’t change and a include a firm delivery date. Most importantly, make sure you understand how and when your deposit becomes nonrefundable.

Purchase Agreement

This is the document through which you purchase your share from the provider. Just as important, the Purchase Agreement provides the terms under which the provider will repurchase your share at the end of your contract term. All too often, buyers don’t consider the likely decline in value of their aircraft, and thus their share, when projecting the all-in cost of their investment.

Master Dry Lease Exchange Agreement

This document governs the relationship among all fractional owners in the program. Essentially, each owner agrees to share his plane with every other owner, thus enabling the provider to utilize the entire fleet to service all the owners. This arrangement is a common feature of all fractional programs; so much so that you may rarely, if ever, actually fly on the aircraft in which you own a share.

Management Agreement

This document governs the core issues of your investment. Nominally, it reflects your appointment of the provider as the manager of your aircraft and as the administrator of the program. But more importantly, the Management Agreement tells you when you can fly, how many hours you can fly and what costs you’ll incur when you fly. It describes how your flight time will be calculated, what you’ll pay if fuel prices go up and how far in advance you must reserve your flight. It spells out your right to interchange, i.e., use other models of aircraft in the fleet, and how you’ll be charged if you do. It specifies peak travel days, when greater restrictions on your use of the aircraft apply, and it maps out the service area within which you can fly.

These documents, and not that beautiful brochure, will govern your rights and obligations. The contracts may look simple, but if you don’t read and negotiate them carefully, you may make a million dollar mistake.

James Butler is an attorney and the Chief Executive Officer of Shaircraft Solutions, a Bethesda, Md.-based consulting firm advising elite travelers on all aspects of private air travel, from charter and jet card programs to fractional ownership and whole aircraft investments. Shaircraft analyzes clients’ private aviation needs, identifies suitable programs and negotiates with the many aircraft providers to get clients the best deal. Shaircraft recently launched Shaircraft Connections, an exclusive Web forum for private air travelers. Since founding Shaircraft in 1997, James has become a well-respected private aviation authority. He writes a regular column for Business Jet Traveler magazine on fractional jet ownership called “Inside Fractionals” and is regularly interviewed by major media, including the Wall Street Journal, Bloomberg News and CNN. He can be reached by email here.

Congress Hears Testimony on Eclipse 500 Certification

2008-09-17T16:19:42Z

Congress heard testimony today alleging that the Federal Aviation Administration speeded approval of the Eclipse 500 very light jet (VLJ), despite concerns over safety and production. The Eclipse 500, one of the first VLJs to enter the market, had been heralded as the start of a new era in private aviation, where point-to-point charter flights, operated by so-called air taxis, would be within the reach of the average flier. But as mechanical problems and production delays hampered the Eclipse 500 in the years since its introduction in 2006, critics also alleged that the plane was rushed to market, with the F.A.A. partly to blame.

Calvin Scovel, Inspector General for the Department of Transportation, told the House Aviation Subcommittee that the F.A.A. was aware of issues with the Eclipse 500 when they issued the manufacturer a certification for the VLJ. The F.A.A. went ahead with certification, Scovel said, due to both a cozy relationship with Eclipse and a more lax regulatory stance from the agency as a whole.

Among the specific allegations raised against the F.A.A. are those from David Downey, an F.A.A. manager put in charge of engineering compliance for the Eclipse 500. He said he was removed from the project after voicing safety concerns about the jet. His colleague Dennis Wallace, meanwhile, testified that he was rebuked by senior F.A.A. management for his reluctance to approve plane software he believed was unready.

Another F.A.A. employee, Ford Lauer, testified that his inspection of Eclipse 500s revealed some shoddy workmanship, but that Eclipse management had an open line to higher-ups at the F.A.A. Eclipse would complain to corporate-friendly F.A.A. management about what they saw as overly intrusive inspections, and the F.A.A., in turn, modified instructions to employees. Lauer said that the F.A.A. then scaled back inspections, putting a cap on how long inspectors could look at the planes, while limiting access to the guts of the aircraft, so as to not interfere with Eclipse’s production timetable.

The F.A.A.’s own hopes for the plane may have played a role in the agency’s alleged behavior. With the nation’s aging air traffic control system sagging under the weight of flights between regional hubs, some in the F.A.A. may have believed that the promise of point-to-point flights offered by the Eclipse 500 would alleviate some of that stress.

Other critics say the Eclipse certification episode is indicative that regulatory agencies are acting less as guardians of public safety and more as favor-dispensing buddies to the very industries they are charged with overseeing. In the end, this corporate-friendly approach may have had a negative effect on the industry as a whole, as design flaws, production delays, and safety concerns, highlighted most recently by a throttle malfunction that grounded Eclipse 500s this summer, have stalled the progress of the VLJ market.

An internal F.A.A. investigation, called a special certification review, convened in August and determined that the agency had acted appropriately through the certification process. F.A.A. administrators reiterated these claims in their testimony before Congress today. Eclipse denies any wrong doing or interference, and points to the disagreement as an internal F.A.A. matter

Imperiled AIG May Put Aircraft Leasing Subsidiary on the Block

2008-09-16T14:11:54Z

With shares in American Insurance Group (AIG) dropping more than 75 percent over the last two days, pressure is mounting on the insurance giant to do something—anything—to shore up its value.

One proposal gaining traction is to sell off the company’s aircraft leasing unit, International Lease Finance Corp. (ILFC), which has managed to sustain profitability and insulate itself from much of the surrounding financial turmoil. A sale of ILFC would provide an infusion of cash into a company with a spiraling debt load. Yesterday two major credit agencies downgraded their rating on AIG, prompting the current crisis.

ILFC currently leases out 947 aircraft, with a combined worth of $55 billion, to individuals, corporations, and airlines. ILFC may be a particularly attractive acquisition given that over 90 percent of its revenues come from abroad, better insulating the company from American economic troubles.

Will any suitors come forward for ILFC and what would a collapse of AIG mean for the world of private aviation? Sound off in our comments.

Eclipse Passes F.A.A.'s Special Certfication Review

2008-09-12T14:48:01Z

Embattled very light jet (VLJ) manufacturer Eclipse Aviation was vindicated today after the F.A.A. agreed to recommendations from a committee that had been called to investigate alleged irregularities in the certification of the company’s Eclipse 500. The special certification review (SCR) was convened on August 11. It both investigated whether corners had been cut in the certification process and ensured that the plane was truly airworthy.

The SCR was seen by many in the aviation community as unusual, since the Eclipse 500 was the first plane to undergo the formal evaluation without being involved in an accident involving an injury or fatality. An incident this summer at Chicago Midway, in which an Eclipse 500 was forced into a hard landing due to a throttle malfunction, along with concerns raised by F.A.A. union whistleblowers, forced the F.A.A. to take a closer look at the jet.

The SCR was not able to confirm whether there were any certification irregularities, but it did determine that technical concerns over the aircraft were unrelated to certification. Eclipse will look upon that as a victory.

With the F.A.A.’s investigation out of the way, Eclipse now turns its attention to a House Aviation Subcommittee meeting on Sept. 17 that will look into the specific allegations put forth against the company by union workers involved in the certification process.

In Defense of P. Diddy: Fractional Jet Owners Do Indeed Own Their Jets

2008-09-11T14:28:05Z

A little more than a week ago, the rapper and entrepreneur Sean Combs, a.k.a. P. Diddy, released a video on YouTube in which he announced that due to the high cost of fuel, he would be swearing off the use of his private jet.

That alone was enough to get the attention of gossip columnists and bloggers who got a good chuckle at the high rolling P. Diddy forced to join the hoi polloi flying commercially. But after it emerged that Combs was the owner of a NetJets fractional share, the blogosphere really took him to task. Sites like Gawker asked, “Is it proper to call a NetJets membership ‘My Jet?’” Hamilton Nolan at Gawker delivered a harsh verdict when he wrote, “That’s not your jet, Puffy. Or if it is, the taxi I rode in is ‘my car.’” To claim you own a jet while flying fractionally is akin to “fronting” according to Gawker.

Now, as a veteran of the rap game, P. Diddy hardly needs our help to brush off the haters, so to speak. However, it pains us to see fractional ownership programs like NetJets so misunderstood in the popular press. NetJets owners are not purchasing time aboard an aircraft, as some suggest. Instead fractional jet holders are the legal owners of a portion of an aircraft, which is then leased back to the fractional company who manages the plane and regulates its use.

Ownership of the share and the terms of the lease entitle the NetJets share owner to a number of hours per year aboard that plane. The beauty of fractional jet programs is that even though P. Diddy may share his plane with as many as 16 other owners depending on the size of his fraction, he will always have guaranteed access to a private jet within a call-out window of a few hours. In fact, the terms of the lease exchange with NetJets gives an owner access to any type of plane within the NetJets fleet. After a typical five year period, owners then sell their share back to the fractional jet company.

The taxi cab analogy is particularly frustrating. Perhaps it would have been apt had it emerged that Diddy used on-demand charter for his travel. However, Diddy is indeed a legal, titled, owner of a jet without the hassles of managing the aircraft. In fact, all of the assorted hassles of plane ownership—hangaring the jet, plane maintenance, and hiring pilots and crew—are handled by NetJets. Unless Diddy flies more than 400 hours per year, it’s unlikely that he would see any additional benefit from owning an entire aircraft.

So keep your head up, Diddy. We stand by your claim to owning a private jet.

For additional information on fractional jet ownership, and whether it might be right for your flying needs, download our comprehensive guide.

Used Jet Inventories Expand as Domestic Market Weakens

2008-09-09T17:04:28Z

In a sign that the domestic private jet industry may be weakening further, analysts at JPMorgan have released a report highlighting the rising inventory of used aircraft in the U.S. Used jet inventory has risen 52 percent since the beginning of the year, with 9.4 percent of all jets in the U.S. currently on the market. Along with the rising inventory, the asking price for used jets has slipped 2.3 percent from last year.

The surplus of used jets on the market shows a flagging demand that analysts think will likely presage a dip in sales of new aircraft in 2009. With jet sales tracking closely to corporate profits, the sinking fortunes of U.S. companies seems to be chiefly to blame for the dip in jet sales. The extent to which the market for new jets falls will depend on how much the rest of the world shares in the U.S.’s economic misfortunes. Last year, for the first time, international sales accounted for the majority of private jet sales.

Palin Takes an Embraer for Her Campaign, As Jets Continue to Make News in Election

2008-09-09T10:05:35Z

Republican vice presidential nominee Sarah Palin has been credited with transforming the election with an invigorating blend of small-town moxie and conservative principles. The Alaska governor will be barnstorming through the country aboard an Embraer 190 operated by commercial carrier JetBlue. The Embraer 190 would seem a logical choice. With ample room for the candidate, her staff and a bevy of journalists, it’s an efficient and reliable jet designed with the heavy demands of regional airline flights in mind.

Of course, in this tough election season, every decision a candidate makes is put under the microscope. The fact that Palin is flying on a jet built by a foreign manufacturer, Brazilian aerospace conglomerate Embraer, has struck some liberal critics as insensitive to American workers in an industry under threat from overseas competition. Embraer does have a factory in the U.S., at Melbourne International Airport in Florida, however that facility is used for the final assembly of the company’s Phenom 100 and Phenom 300 light jets.

There may be bit of a bad blood between domestic aviation industry and the McCain campaign. Boeing strongly expressed their frustration last March when Senator McCain helped to steer Congress towards awarding a $35 billion contract for the Air Force’s next generation tanker to European Aeronautic Defence and Space Co., parent company of Airbus.

Campaign jets have proven to be a popular issue over the course of this election. Eager to appear environmentally conscious, both the Obama and McCain campaigns have purchased carbon-offsets in order to mitigate greenhouse gas emissions. McCain, who early in the campaign attracted media scrutiny for flying on his wife’s private jet, now flies on a Boeing 737-400 he has dubbed the “Straight Talk Express.”

Barack Obama has seen his share of jet misfortune. In July, a chartered MD-80 he was flying on was forced into an emergency landing after the plane’s inflatable escape slides deployed while in flight. After switching to a dedicated aircraft, Obama drew the ire of some conservative critics when he painted over the American flag livery on the tail of his Boeing 757 with his campaign logo.

Halogen Guides Announces Launch of Flight Simplified

2008-09-05T10:09:27Z

Halogen Guides and American Express® today announced the launch of Flight Simplified (visit www.flightsimplified.com), a new private aviation Web site for American Express® Cardmembers. As purchasing a private jet can be a confusing endeavor, the site helps to simplify the decision making process. The site explains the benefits -- from convenience and security to rewards points and exclusive offers -- of using an American Express Card to finance private aviation needs. Furthermore, Flight Simplified offers tutorials on private jet ownership models, an up-to-date guide on aircraft financing and access to Halogen Guides’ extensive directory of private aviation providers. American Express Cardmembers will especially appreciate the Exclusive Offers section, which lists discounted rates from big-name providers -- such as Virgin Charter, Delta Air Elite and Sentient Jet -- available only to Cardmembers.

The new site is an authoritative, independent source for news and research on private aviation.

“Many people don’t realize that a transaction as complex as chartering or purchasing a private jet can be handled with an American Express Card that’s already in their wallet,” said Greg Shove, CEO and co-founder of Halogen Guides. According to Shove, Halogen Guides’ partnership with American Express arose from a mutual desire to educate Cardmembers on the benefits of private aviation and to supply straightforward tools to aid with decision-making and financing. “American Express is providing Cardmembers with the knowledge that the options are out there; we’re providing them with the details they need to make those options a reality.”

“Flight Simplified provides an innovative way to educate ultra-affluent Cardmembers on both the benefits of private aviation and the various benefits of paying for a private jet with their American Express Card,” said Peggy Sousa, Vice President and General Manager of Merchant Services North America for American Express. “The site also creates a forum for American Express to help market some of our larger private jet merchants.”

Flight Simplified will be promoted on both the American Express and Halogen Guides websites, and through Halogen Publishers, an extended network of sites reaching over 3 million affluent users. The two companies are also working together on an iPhone jet charter application, slated for release this fall.

ABOUT HALOGEN GUIDES:

Halogen Guides focuses on smart luxury. Our consumer Web sites take the guesswork out of ultra-luxury travel, vacation home alternatives and private aviation. Objective, independent guides, as well as news and analysis, give users the straightforward tools they need to evaluative the costs, benefits, risks and rewards of big-ticket purchases.

Halogen Publishers is a new division of Halogen Guides that connects more than 20 upscale travel and lifestyle publishers into a single network that allows media buyers and advertisers to reach affluent consumers online, easily and efficiently. Many of the world’s leading luxury brands, including Exclusive Resorts, Ritz-Carlton Club, Marquis Jet and American Express use our services to deliver their message to our highly selective audience.

The company is privately owned and based in San Francisco. For more information, please visit http://halogenguides.com.

McCain's Veep Palin Chose to Offload Ex-Governor's Jet on EBay

2008-09-03T16:25:05Z

When John McCain chose Alaskan Governor Sarah Palin as his running mate, he cited her reputation as a reformer with a strong fiscally conservative bend as one reason for his selection. During Palin’s run for Governor in 2006 she campaigned on the promise of reigning in what she saw as wasteful spending. One of the first orders of business? Get rid of the state’s private jet.

The 20 year-old Westwind II was purchased by the taxpayers of Alaska for $2.695 million and Palin felt the plane was a needless extravagance. Then governor Frank Murkowski, who shared the aircraft with the state’s Public Safety Department, used it to traverse Alaska as part of his duties. (Note to residents of the lower 48: Alaska is about two and a half times the size of Texas.)

After Palin won the election, the jet was repeatedly put up for auction on eBay with a reserve of around $2.5 million. But while putting the jet on eBay may have provided Palin with a line for the highlight reel of her acceptance speech at the Republican convention last night, it wasn’t the end of the story. A year passed without the plane receiving any bids—perhaps Palin should have consulted with former eBay CEO and fellow GOP rising star Meg Whitman for advice on successful eBay salesmanship. Finally, Palin contracted the services of a jet broker, Turbo North Aviation, who managed to offload the jet to a Valdez businessman for the reduced price of $2.1 million.

Of course one wonders why the jet was listed repeatedly on eBay and not one of the dedicated sites for aircraft sales. In defense of Palin, Halogen Guides Aircraft Marketplace had not yet launched in 2006. If she does manage to land in the White House and feel the need to say, put Air Force One on the sales block, we’ll hope she’ll consider a more jet appropriate marketplace.