FLIGHT INTERNATIONAL

JET AVIATION ENTERS CARD MARKET

Programme includes introductory level scheme to allow customers to assess requirement without overspending

Jet Aviation has entered the block charter-based jet card market with the US launch of its Privileged Travel programme. The move comes as established players seek to widen their share of the fastest growing sector of business aviation.

Jet Aviation's programme differs from competitors' concept by offering an introductory-level card that entitles the user to 10h of occupied flight time. The card allows customers to access their level of use while making a limited financial commitment, says Jet Aviation. Once clients determine how much flight time they need they can apply the unused balance to the company's 25h and 100h cards.

Jet Aviation uses around 160 aircraft from its charter and management fleet to support the programme. When a customer books a flight, Jet Aviation says it deducts the value of the occupied hours, depending on aircraft type, from the card's balance. The cards carry no expiry date and the balance of one card can be transferred to another.

Jet Aviation is hoping to emulate the success of other jet-card charter programmes in the USA, which have expanded the business aviation customer base for both manufacturers and operators. Cessna Citation Shares founder and chief executive Steve O'Neil says the success of the 25h Vector Card, launched in July, has been "phenomenal" wit nearly 100 cards sold to date, a renewal rate of around 70% and a conversion to fractional rate of 30%. "We don't want to grow the programme too quickly," O'Neil says. He suggests that without a large business aircraft fleet to support the demand from card and fractional customers, the quality of service could be compromised if growth is not well managed. "We have to strike a balance between a respectable level of growth and providing an excellent service to our customers." Citationshares, a 75.25 joint venture between Cessna and Tag Aviation, operates a fleet of 52 business jets. A further four aircraft, including the first Citation Sovereign, will be added to the fleet by the end of the year and a further 25 aircraft next year, including the first Cessna Citation CJ3 light jet.

Flight Options, which also launched its Jet Pass card membership programme in July, says the scheme has grown more rapidly than expected, although the Cleveland Ohio-based company declines to release numbers. "We wanted a 10% market share within six months," said the company's chief executive John Nahllas at the show. "But we have achieved that in our first 60 days." The company operates a fleet of more than 215 aircraft, and claims to have the world's largest fleets of Raytheon King Airs, Beechjet 400As and Hawker 800s.

Sentient Jet, which pioneered the block charter-based jet card concept, said at the show that it has sold over 800 cards since it began 5 years ago. The Norwood, Massachusetts based company, the second-largest card provider after Marquis Jet Partners, expects to exceed 1,000 card sales within weeks.

Bombardier Flexjet says it has had a disappointing start with its card programme launched last year with operating partner Delta Air Elite, and is now sharing the marketing effort to drum up sales of 25h card.

PUSHING FORWARD

Lufthansa is looking to further explore the top-end segment

Following a successful 2004 where Lufthansa increased seat capacity by 14%, carried 51 million passengers, raised load factors to 74% and earned £380 million (US$503 million), it is maintaining growth this year with a strategy that sees the airline dipping its fingers further in the top end segment.

It is also consolidating its position at its second hub in Munich, according to executive vice-president marketing and sales, Mr Thierry Antinori, as it pushes ahead to maintain growth as a full range aviation company.

Lufthansa plans to expand further this year, but will only increase seat capacity by 3%, of which 1.5% will be increased during its summer schedule.

Explaining Lufthansa's mission to be innovative, customer oriented and focused on quality, Mr Antinori said a new product, Lufthansa Private Jet, operated exclusively with private jet company NetJet using a seven-seat Cessna Citation aircraft, would be launched on March 29 from its Munich hub after 6 months of testing.

"We are targeting the B2B market offering a minimum 30-minute connection to more than 1,000 destinations. And so far five companies have expressed interest in the product," he said. "It is a product that will be hard for our rivals to copy and if there is demand, we will consider extending it to other airports."

A one hour, one way flight between Munich and Lugano in Switzerland for seven passengers, for example, will cost £6,350.

Lufthansa has already spent some £15 million developing its 1,800m2 First Class Terminal in Frankfurt, launched in December last year, and a similar programme is being planned in Munich in early 2006.

Explaining the thinking behind Lufthansa Private Jet Mr Antinori said it complemented the airline's full-range strategy and the product could "influence sales in other products".

Of the 15 new generation Airbus 380 aircraft it has ordered, Lufthansa will put four into operation in the second half of 2007. Two are earmarked for North America and two for Asia-Pacific.

With the delivery, Mr Antinori said a new first-class and a new economy class would be introduced.

In Asia-Pacific, the options are to launch the A380 to Tokyo and either Singapore or Bangkok.

"If the Infrastructure in India permits, we may look at Delhi or Mumbai," he said

Lufthansa also operates the no-frills Germanwings and charters on Condor.

Meanwhile, Lufthansa, which has a 40% stake in the £1.2 billion new terminal in Munich is touting the hub to be more airlines in Asia.

Its group representative and head of hub management Munich, Mr Karl Ulrich Garnadt, said apart from air China and Thai Airways International, which operate to Munich, Star Alliance member Singapore Airlines was also considering flying to the new terminal. Other alliance members already using it include Air Canada, Scandinavian Airlines and United Airlines - Caroline Boey.