The scoop on flying 'condojets'
When considering all of the big-league airline and corporate employers of pilots, the "fractionals" continue to offer a glimmer of hope to those who expect to make a good living flying an airplane.
The origins of fractional ownership date back to 1964 when Brig. Gen. Dick Lassiter, inspired by the U.S. Air Force's Special Missions Squadron, launched a charter company using 10 new Learjet 23s to transport civilian VIPs on various missions. Adhering to tried and true military principles of aircraft utilization and management, the general's Executive Jet Airways began to grow.
Subsequently renamed Executive Jet Aviation, the company was purchased by a former investment banking executive, Richard Santulli, in 1984. The story goes that Santulli originally planned to use EJA's hangar in Columbus, Ohio, as a base for a helicopter leasing business. However, after purchasing a private jet with three of his buddies, arguments developed about who would get to use it and when. Thus, the idea for fractional ownership took shape.
Santulli possessed a remarkable acumen for mathematics and business modeling. In 1986, he pioneered the fractional ownership concept. Instead of owning airplanes and dealing with staffing, maintenance, and regulatory issues, Santulli concluded that companies and individuals would be willing to purchase one-sixteenth to full shares of aircraft. It is that notion which has propelled the former EJA, now known as NetJets, to the dominant position in the fractional ownership industry.
Fractional ownership generally requires an up-front purchase price plus a monthly management fee and an additional hourly occupancy fee, all of which are quite lofty, to say the least.
As an example of the price of admission to the fractional ownership club, a one-sixteenth share in a Flexjet Lear 45 as of early 2003 required an initial investment of $630,000, a $5,145 monthly management fee, and an hourly rate of about $1,650. All of this will give the owner 50 hours of flight time annually. After the accountants make their adjustments, it is estimated that the after-tax cost of fractional ownership is just under $2,500 per hour. Any takers out there?
The Big Three
The National Business Aviation Association estimates that there are more than 50 management companies which claim to offer some form of fractional ownership or attempted to do so in the past 15 years. Although originally viewed with some suspicions that the fractional concept might erode traditional corporate flight departments, nearly three-quarters of the fractional shareholders are companies new to aircraft ownership.
Of all the players in the field, NetJets, Flight Options, and Flexjet dominate.
NetJets
With headquarters in Montvale, New Jersey, and its new operational base in Columbus, Ohio, NetJets is the reigning champion in the fractional ownership niche.
At last count, NetJets employed more than 2,300 pilots who crew more than 450 aircraft around the world including many varieties of Cessna Citations, Hawkers, Gulfstreams, Falcons, and the Boeing Business Jet (a modified 737 airliner). The word on the street is that the company has at least 500 aircraft on order from Boeing, Cessna, Dassault Falcon, Gulfstream, and Raytheon.
Pilots at NetJets fly! In 2002, crews conducted more than 200,000 flights. Their customers included executives from Dow Chemical, General Electric, Seagram's, and Texaco, along with celebrities like Arnold Schwarzenegger, Pete Sampras, Andre Agassi, and Tiger Woods.
Unlike airline flying, a NetJet pilot may see all corners of the nation in one day. A plane might be dispatched to retrieve an executive in Steamboat Springs, Colorado, for a flight to Los Angeles International where a golf pro will be fetched for a tournament in Houston where, after that stop, a movie star will be transported to Key West, Florida. Routes and schedules can change at any moment, even while airborne. Thus, flying for NetJets can be diverse, exciting, and challenging.
Unlike the airlines, pilot schedules are fairly predictable. Although there are multiple options, the simplest routine is seven days on and seven days off. Pilots can live just about anywhere they want since the company will pay for a commercial flight to any one of 25 gateway cities.
The pay scale is not unattractive. A first-year first officer can expect to earn in the low to mid $30s with substantial increases after that. However, a captain on a Boeing Business Jet can ultimately earn more than $200,000 annually with tenure.
Sources say that NetJets is planning to hire 350 pilots in 2004 with a preference for pilots with recent FAR 121/135 experience. NetJets' hiring minimums include 2,500 hours total time, 500 hours multiengine, 250 hours IFR, an airline transport pilot (ATP) certificate, and an FAA first class medical. For more on NetJets, visit the Web site.
Flight Options
In 1981, current CEO and Chairman Kenneth Ricci launched a corporate charter enterprise known as Corporate Wings. When the company evolved into Flight Options in 1998, industry observers were skeptical. Unlike NetJets, which sells shares in new business aircraft, Flight Options features pre-owned bizjets. With tremendous savings that could tally more than a million dollars over the cost of new machines, Flight Options recruited 150 owners in its first year of business.
Today, the Richmond Heights, Ohio, com- pany has grown its fleet to more than 200 aircraft and now has approximately 900 employees.
Although not the biggest, Flight Options conducts business in a big way.
In 1999, the company opened a new operations control center at Cuyahoga County Airport, east of Cleveland, Ohio. Patterned after that of a major airline, it can manage up to 300 aircraft. In 2000, Flight Options was the first operator of fractional jets to install the JeppView Electronic Flight Guide System, resulting in the cutting-edge paperless cockpit. In 2002, Flight Options opened a two-story private terminal at Denver's Centennial Airport to cater to the needs of its customers.
The company received a tremendous boost when it merged with Raytheon Travel Air in March 2002. As a result, Flight Options grew by more than 1,700 aircraft share owners and more than 200 aircraft virtually overnight.
Pilot schedules and lifestyle are fairly close to those of NetJets' pilots. Flight Options aircrews normally fly eight days on and seven days off. Though technically an FAR Part 91 operation, Flight Options adheres to Part 135 regulations specifying a maximum duty time of 14 hours followed by 10 hours of rest. Pilots can live practically anywhere they choose because they will join the aircraft, at company expense, wherever it ends up after a duty cycle.
A unique Flight Options fringe benefit is this: After six years of service, each pilot must take two months off with pay, plus vacation, or one month off with double pay, plus vacation.
Pay scale? One of the best in the industry. Since Flight Options operates everything from King Airs to Gulfstream IVs, starting salary does vary from aircraft to aircraft ranging from approximately $2,800 to $5,000 monthly in the first year.
Flight Options was projected to hire 100 pilots in 2003. Flight Options' hiring minimums include 1,500 hours total time, 300 hours multiengine, 100 hours turbine, a com- mercial pilot certificate with instrument and multiengine ratings (and the ATP knowledge test passed), and an FAA second class medical. For more information, see the Web site.
Flexjet
The third member in the fractional triumvirate is Flexjet, a Bombardier company formed in 1995. Based in Dallas, Flexjet flies more than 100 aircraft, all manufactured by the parent company. Its approximately 400 pilots fly variations of Learjets and the Challenger 604.
Again, the life of a Flexjet crewmember is very similar to those of his or her colleagues at NetJets and Flight Options. Flexjet will fly the pilot to an aircraft via commercial air carrier where a five- or six-day duty cycle begins. However, the travel time does count toward duty time at Flexjet. So, counting travel time in both directions, the Flexjet pilot may fly just four days in a given time frame.
Like counterparts at the other fractionals, a pilot may find himself or herself landing at any one of 5,000 airports in the United States. Thus, the crew may be uncertain as to where the next flight will take them, which adds to the variety and excitement of the job.
New-hire pilots start about $33,000 annually with a first-year captain pulling in about $55,000. Flexjet, like all companies in this industry, has a fine benefits package including medical, dental, vision, life insurance, stock purchase, tuition reimbursement, and Section 401(k) retirement plans.
Flexjet's hiring minimums include 2,500 hours total time, 500 hours multiengine, 500 hours turbine, an ATP certificate, and FAA first class medical. See the Web site for more.
What does this all mean for the future flight pro? The aviation world has changed big time. If you are holding out for that major or regional airline career, then fine. But, take this advice. It would be more than prudent to expand the career goals beyond a seat at SkyWest, Atlantic Coast Airlines, Comair, United, Delta, or American to include companies like NetJets, Flight Options, and FlexJet. They seem to be doing something right, and that means jobs for pilots!
Wayne Phillips is an airline transport pilot with a Boeing 737 type rating and is a designated pilot examiner in Colorado. He is a speaker for the AOPA Air Safety Foundation.
