What is up with fractional jet ownership companies?

MountainDude said:
All I hear is bad news, like this one:
www.flyingmag.com

Terminated Volato Employees File Class Action Lawsuit

The lawsuit alleges Volato violated U.S. labor law when the company laid off 233 employees without providing advanced notice.
www.flyingmag.com www.flyingmag.com

Can someone tell us about the positive side of such businesses?
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This article seems to be reporting bad news only for the company that got sued. Are you asking as a consumer or employee?
 
Lindberg said:
This article seems to be reporting bad news only for the company that got sued. Are you asking as a consumer or employee?
Click to expand...
Neither. I am just curious about this business model.
 
Bad situation. Everyone left has to be loving it just as much. That money got to come from somewhere.
 
I am quite familiar with Volato. They had a flawed business model. They put a lot of $$ on deposits hoping to expand their Hondjet fractional model to supermids and had deposits on a number of G280’s. They took delivery of one but had trouble selling the fractional. Ran out of cash.
 
MountainDude said:
All I hear is bad news, like this one:
www.flyingmag.com

Terminated Volato Employees File Class Action Lawsuit

The lawsuit alleges Volato violated U.S. labor law when the company laid off 233 employees without providing advanced notice.
www.flyingmag.com www.flyingmag.com

Can someone tell us about the positive side of such businesses?
Click to expand...
There are successful fractionals such as NetJets, FlexJet, and Plane Sense. Just because some companies have failed doesn't mean that the business model is bad. Look how many airlines have failed in the last 30 years. There were old airlines such as PanAm and Eastern and some were new such as Peoples Express and Skybus.
 
the positive side is that it employs and trains a bunch of CPL pilots trying to get to 121. . . Actually, its someone else (namely the fractional) who is making the numbers work. Assume 50% ownership sold pays for a plane, they just have to sell out the other 50% fractional ownership for profit. It might be more 60/40 but its somewhere around there. So the numbers work if you can sell enough of the fractionals to enough people. Just like timeshares. The issue is at the beginning before there is enough traction, you have to get enough cashflow to keep the planes flowing in for coverage, expansion, and growth.

Its convenient for jet users because they dont have to deal with jet ownership/management which is the difficulty most companies/people have when stepping up in to that space (recruting, training, keeping pilots, plane maintenance management, etc)
 
jayhawk74 said:
There were old airlines such as PanAm and Eastern and some were new such as Peoples Express and Skybus.
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People's Express did not fail. They merged/got bought by Continental. Who merged with United.

Eastern did fail, mainly because the employees did not learn from history how Frank Lorenzo operated.

There is a graphic showing the timeline of all the US airlines. Very few just die.
 

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jayhawk74 said:
There are successful fractionals such as NetJets, FlexJet, and Plane Sense. Just because some companies have failed doesn't mean that the business model is bad. Look how many airlines have failed in the last 30 years. There were old airlines such as PanAm and Eastern and some were new such as Peoples Express and Skybus.
Click to expand...
People Express (not peoples). It was formed by some disgruntled Texas Air guys and got reabsorbed into that. Now part of United (aka Continental), but the legacy is still there. It was the original Continental that really doesn't exist anymore.

Pan Am's business model was indeed bad once deregulation hit. They were both supported and limited by the regulatory environment. Eastern got killed by a bunch of bad labor decisions. There's some really nice books on both of these failures. For Eastern, it is Freefall by Jack E Robinson (no relation to the ball player). For Pan Am, read by Robert Gandt (eschew Jack's rambling attempt to document that airline).
 
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