The mid-60's offered the dawn of corporate
jet travel. At first, the use of business jets was typically
limited to a very select number within the company, often only
In these situations the pilot held a privileged
position in the company. He knew where the execs traveled...who
they met with... where they played...the closets where skeltons
were kept...where company money was spent. In return for his
discretion, the chief pilot had immediate access to the front
office and other perks along the way.
In time, companies
began to realize there were gains to be made by having more
people within the company utilize the company jet. It became
a business tool, a necessity.
Another indicator of this
phenomena was the sales picture for new aircraft. The old saying
was, "if the economy gets a sniffle, the corporate jet business
catches pneumonia". Corporate jets were seen in the early days
were seen as luxury items and was typically one of the first
item cut in bad times.
As the role of the corporate jet
shifted within the company, oversight of the flight department
shifted as well. The individual in charge of the copy machine
and phone system was likely put in charge of the flight department.
Use of the company airplane became more accountable... more
Oversight of the flight department meant
facing a large number of high- dollar decisions that needed
to be made on a regular basis. Hangar costs, aircraft maintenance,
engine maintenance, aircraft updates, service bulletins, training
personnel matters, scheduling, scheduling conflicts, periods
of underutilization etc etc. An ongoing Excedrin headache...a
tough assignment for anyone.
Big bucks are involved and
how do you say no to the Flight Department when they continually
want new equipment that involves safety issues or that will
enable the company jet to land in weather that would ground
the bravest Canadian Goose.
Richard Santulli is credited
with developing the market for fractional ownership. His concept
was simple. Companies could purchase ownership shares in aircraft
and he would provide airplanes with crew on demand. He would
assume the headache of managing the flight department.
The time was ripe for the idea and fractional ownership
caught on. Over 800 aircraft are now part of the fractional
fleet, with over 4,000 share holders. Part of the market came
from companies previously having a flight department, more from
companies who have never owned aircraft.
In either case,
the main selling point was "on demand service", without the
hassles of ownership.
But if that is the case, why haven't
charter operators seen a similar growth? They offer "service
on demand" without the hassles of ownership plus there is no
need to take an equity position in an aircraft plus fixed monthly