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Friday, Nov. 14, 2003

HIGHFLIERS

Letting the plane take the strain


By PAUL THOMPSON
Special to The Japan Times

There can be fewer more ostentatious trappings of wealth than a private jet. However, the perception of such aircraft as mere playthings of the rich and famous has tended to detract from their more mundane role as effective, hassle-reducing business tools.

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Business flyers board a mid-range Gulfstream G200 charter flight at Haneda airport in Tokyo.

Nowadays, with even the most infrequent of business fliers inconvenienced by airline route rationalization and sadly essential security measures at congested airports, many companies are turning to executive jets -- if for no other reason than time-management.

The global corporate-jet market was transformed long ago by shared ownership schemes and leasing arrangements that sidestepped prohibitive import taxes. Over the past decade or so, however, the trend has increasingly been toward fractional ownership, with individual or corporate customers having guaranteed access to an aircraft without being responsible for crew recruitment and training or aircraft maintenance.

In the United States, the concept's prime mover has been a company called NetJets that, with its managed fleet of around 500 aircraft, would now rank as the world's sixth-largest airline. Clients of NetJets purchase a new aircraft in sixteenth-share units, each equating to 50 hours' flight time per year, either on that aircraft or equivalent ones in the fleet. This way, the cheapest one-off payment is around $300,000 for a one-sixteenth share of a pre-owned Cessna Citation twinjet. In this case, a monthly management fee of $5,500 and an hourly in-flight fee of $1,400 are the only other costs.

In Europe, where NetJets has been operating since 1996, Britain is the dominant market, with 75 percent of the region's fractional owners based there.

Gold-card catchment

Although private planes could never compete in airspeed with the now-retired Concorde, that iconic aircraft's demise is expected to turn the attention of the "time-is-money" community to business jets. An expanding British charter operator, Bookajet.com, which is attempting to rid executive jet travel of its elitist image by targeting gold card-wielding frequent flyers, seems set to benefit from an advertising deal with none other than soccer star David Beckham.

Nonetheless, the industry is currently encountering some turbulence, with attempts being made to ensure that talks aimed at settling an intergovernmental dispute over the operation of U.S.-registered fractionally owned aircraft in Britain do not stall -- since fractionals are classified as corporate operations, and are tightly regulated in Europe, whereas in the U.S. they are classified as private aircraft.

News photo
While en route with experienced hands at the controls (above), business flyers can confer in comfort in the aircraft's adaptable interior.
News photo

Many Asian nations have no criteria for fractional ownership in place, and have been awaiting a ruling from the U.S. Federal Aviation Administration, under whose regulations they tend to operate.

In Japan, the business-jet market might be best described as underdeveloped -- but all that is set to change. Around half of the 25 or so business jets, including those operated by the likes of Toyota and Sony, are currently registered and based abroad to reduce operating costs and enable corporations to better justify their continued ownership to shareholders.

The Tokyo-based Japan Business Aviation Association is a member of the nonprofit, nongovernmental International Business Aviation Council that seeks to promote and protect interests within the industry. Interviewed for The Japan Times, the JBAA's managing director and secretary general, Toshi Iwata, said that 2005 should see fractional ownership take off here, once taxation regulations and registration matters have been resolved, with a home-based domestic fleet of possibly 100 aircraft.

In the meantime, for those who would balk at the price tag of even a pre-owned aircraft, there remain those operators that can offer standard, no-fuss jet charter and air-taxi services on either an ad hoc or long-term basis. Acting as a broker, the business-jet charter service set up last year by Marubeni Aerospace Corp. owns no aircraft of its own but, through its partnership links with Hong Kong-based Metrojet Inc. and Deer Jet -- the largest charter-flight operator in China -- it can offer flexible, cost-effective solutions within Asia and across the Pacific.

Comfort and speed

Marubeni Aerospace also acts as Japanese agent for U.S. manufacturer Gulfstream Aerospace, whose top-of-the-range G550 can accommodate 16 passengers, has a typical range of 12,500 km, and can be chartered very cost-effectively from around $9,000 per hour, excluding taxes. A new one would set you back a cool $47 million. For shorter distances, the likewise twin-engined Gulsftream G200 can offer 10 passengers an unsurpassed combination of comfort, cabin size and speed.

So, as this transport sector expands, gone will be the days of paying top executives to sit in international airport lounges for hours before departure. With either fractional ownership or jet charter, they can take off within minutes of arrival at a convenient local airport, use spacious and sumptuous aircraft interiors to work or relax in private -- and hence arrive better prepared and in better shape. In addition, baggage retrieval is instant after landing at an airfield that will likely be that much closer to their ultimate destination.

Coco Chanel once said: "Luxury must be comfortable, otherwise it is not luxury." In the future, an increasing number of jet-setting captains of industry and social climbers will be experiencing such travel comfort as executive jets in all their forms extend their reach and become an ever-more viable option.

Contact information: JBAA, Toranomon MK Bldg. 4F, 5-11-11 Toranomon, Minato-ku, Tokyo 105-1001; tel. (03) 5405-2136, fax (03) 5405-2239; www.jbaa.org Marubeni Aerospace Corp., Otemachi 1-4-2, Chiyoda-ku, Tokyo 100-8088; tel. (03) 5220-7703, fax (03) 5220-7711; www.marubeni-aerospace.com


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