Executive AirShare, the Kansas City-based “regional” fractional provider, is expanding its business portfolio with two new programs that fill a gap between fractional programs and the jet card business.
Unlike fractional, under which owners buy a stake in an aircraft, Executive AirShare’s new programs are based on a leasing structure.
The “Launch” program calls for a one-time payment ($99,895) that provides up to 25 days or 60 flights over up to a two yr. period. Like most fractional programs, the hourly rates are billed separately.
The program calls for use of the company’s Phenom 100 very light jets, but provides ability to interchange with either theSuper King Air 350 or King Air C90B.
The second program, “Launch Premium” provides access to the Phenom 100 for 36 days with ability to interchange into the Phenom 300 light jet for up to six of those days.
Executive AirShare President Keith Plumb likens the programs to a charter card but with more financial and tax incentives. Plumb is less interested in the charter card business, though, which he says can be difficult to forecast from a business standpoint.
Instead, the leasing option is designed to introduce and serve as a bridge to fractional possibilities to potential new clients. And, Plumb maintains the programs initially have had a “huge response.” Inquiries jumped dramatically, and the company signed up a half-dozen new clients within the first few days “For us, that’s huge,” he says.
The programs roll out as the company grows into one of the larger players in the fractional market. While the major providers have lost or struggled to maintain their shares sold, Executive AirShare has grown 25% year-over-year in recent years. The company has gone from 75 shareowners in 2009 to more than 130 as of this month.
In addition, its fleet now numbers 42 aircraft (both fractional and managed), including the Phenoms, King Airs and the Beechjet 400A, and the company has added a regional service surrounding Buffalo.
Executive AirShare began operations in 2000 with the concept of catering toward a clientele based in the Midwest with a fleet of light jets and turboprops. While fractionals typically offer aircraft on a per-flight basis, Executive AirShare makes aircraft available on a per-day basis. This eliminates the typical four-hour or other guarantees that other fractional programs make.
It also simplifies scheduling, Plumb says, and since the service typically is centered in the Midwest, it minimizes deadhead. The scheduling appears to work with deadhead flights among an industry low of about 8-12%.
The company keeps most of its inventory sold before taking new aircraft. But Executive AirShare holds a fraction on each of its aircraft in the program to help with availability of those aircraft for its owners. This eliminates the need for obtaining outside charter to supplement its fractional operations, which can be costly.
The regional model, along with operation of light jets/turboprops, enables the company to keep down costs, bringing in the entry level customer. Executive AirShare has grown at a time when companies have been forced to scale back or cut costs. In one sense, Plumb says, “the timing couldn’t better” for his model.
Executive AirShare has captured companies downsizing part of their shares from a national fractional or just stepping into the market. Plumb doesn’t see his model as a replacement for the larger, national fractionals – since they operate larger aircraft that can accommodate more passengers and have more range.
Instead, he sees it as a complementary service that can augment the fractional service. About 10% of the shareowners also have shares in NetJets or another program, he notes.
The company further continues to expand fleet at a time when many other fractionals have downsized or maintained. However, the company has rearranged some of its deliveries, deferring on smaller Phenom 100s to take Phenom 300s sooner. “We’ve added 300s at a greater pace than we anticipated and haven’t taken as many 100s as we though we would have,” he says.
But the 100s have had enough success that many of the King Air 90 customers have begun to move over to the very light jet. As a result, he says, Executive AirShare has stopped taking new delivery of the 90s, maintaining the five remaining in the fleet.
Plumb says he has been surprised by the reception of the 300s, discovering their nearly 2,000-nm range captures some owners who traditionally have had a “midsize need.”
But he cautions that the company will stay at the light end of the market for now. “There’s really potential for scalability,” he says, but, “We know we can’t be everything to everyone…We’re conservative in our growth.” He notes financing can still be difficult to obtain to expand into larger aircraft. Also, the company wants to preserve its “regional mentality.”
The company, however, has been able to obtain financing for the smaller aircraft by building a network of regional banks. In fact, one of the earliest banks to step forward with financial backing, he says, was one of the company’s first customers.