13th July 2010
Chris Moody, CEO of Fractional Jet Europe, has created a unique niche in the private jet market by reselling existing shares from major fractional operators such as NetJets and VistaJet.
The logic of buying a share rather than a whole aircraft is that most people don’t fly enough to warrant the expense of owning a plane outright….
“No-one got rich by giving it away; the people who are flying privately tend to be as cost conscious as anybody,” says Moody. “You buy a fraction equivalent to the number of hours you want to fly. For example, a 1/8th share is typically 100 flying hours per year. You are guaranteed a jet whenever you want one, so you don’t have to pay for the jet to sit empty when you’re not using it. However, our secondary market saves you even more, as you can buy from the existing owner. At the moment values are down, so the buyer is saving a huge amount compared to buying a new share.”
Moody used to be a professional golfer, with a European Tour tournament win in the 80s on his CV, before ending up in the business of private jets. He was part of the team that launched MarquisJet in Europe in 2002, which was the original 25-hour “jet card.”
“It was a perfect product for Europe, which was probably five or ten years behind the US at that time in private jets,” explains Moody. “So Fractional wasn’t well understood and the card was easier for people to get their head around.”
MarquisJet was later acquired by NetJets, and Moody remained within the company until he started Fractional Jet Europe in 2008. The business idea behind Fractional Jet Europe came about at the beginning of that year as the recession began to bite.
“I could see that a lot of people were going to try to get out of their contracts,” he says. “So I felt there was a really good market to enable people to trade their shares at any time. Until our Share Exchange, there was no choice – you had to go back to the operator and say, ‘How much will it cost to get out of my contract?’ By creating an open market, we enable the seller to exit his share contract at any time, even before the early termination date. He avoids all the normal termination fees, which can be considerable. At the same time, the buyer gets a cheaper share, a shorter contract term, and if it has got extra hours that the owner has not flown, he just inherits those free of charge – so both the seller and the buyer are considerably better off.”
Ironically, the company was launched on 15 September 2008, the notorious day of the Lehman Brothers collapse. In many ways, the business benefited from the economic downturn, as companies looked to reduce costs. The company had a good year in 2009, as a result of its unique insight in the industry, which can save customers many hundreds of thousands of Euros.
“We offer independent advice to anyone considering flying privately, and can give them an impartial assessment of their needs. Private jets are a complicated business, and we will save anyone a considerable sum, as it is not always easy to work out the best solution for a given requirement. Although the company started with fractional shares, we have since expanded into whole aircraft and ad-hoc charter, so we can suggest the most suitable option, whatever their flying pattern.”
Their vision for the future is simply to broaden the customer base across Europe, and even if public companies are keeping their heads down at the moment, private companies and VIPs will still need the ease and time-saving benefits of flying privately.