2007 G8 Summit Magazine - (Page 12) sometimes things go wrong, but we receive many more compliments than complaints, and approximately 40% of new business comes from customer recommendation.” Ms. Moreton also reports a retention rate of 97%, so Skyjet must be doing something right to win over these tough customers, and considering the overall growth of the industry, Skyjet’s competitors are thriving as well. Especially affluent businesses still opt to buy their own jets—with acquisition costs anywhere from $4.5 million to $35 million (along with housing, maintenance, and insurance costs)—but fractional ownership is the most popular way of getting on board private jets. NetJets—a subsidiary of Warren Buffett’s Berkshire Hathaway company—created the fractional ownership concept in 1986, which made private jets accessible to a whole new market. Adopted throughout the industry, the general idea is that you prepay for a set number of flight hours in a year—for example, about $115,000 for 25 hours in a particular class of light jet—with the unused hours and dollars rolling over to the next year. Variations to the fractional-ownership concept, however, are multiplying. Skyjet’s Moreton cites her company’s New Generation Jet Member card, which she says “you can design to suit your own specific flight patterns, with no penalties or surcharges for mixing aircraft types, regions around the world, or flight profiles.” With the larger, more luxurious, or speedrecord-setting jets, even fractional ownership can be expensive, so the current trend is toward smaller, more economical, even more accessible jets. At the National Business Aviation Association’s annual end-of-year convention in 2006, held in Orlando, Florida, the big buzz was “Very Light Jets,” or VLJ. Piper, Epic, Cessna, Honda, Raytheon, Honeywell, and others announced more than thirty new VLJ designs. The private jet industry’s in-flight magazine, Stratos, reported that Honda took deposits on more than 100 orders for their $3.65 million jet during the three days of the convention. The industry projection is that VLJ sales will more than double over the next ten years. Maximum range for VLJ is limited—around 1,100 nautical miles. By comparison, Boeing’s newest corporate jet, the 737-900ER, with 1,120 square feet of cabin space, has a maximum range of 5,475 nautical miles (and there are older models that top 7,000 nautical miles). Bigger jets will continue to be designed, sold, and extensively patronized, but it’s reasonable to believe that the VLJ, in combination with fierce competition among the private jet service providers, will make it even easier for more individuals and businesses to enter the market as customers—fractional as well as outright owners—and the industry as a whole will loom ever larger in the world economy. And it is growing. According to GAMA’s annual review, business jet shipments hit an all-time high in 2006, with a total of 885 units, up 18% from 2005. (The fleet of Skyjet alone consists of over 900 jets). Employment increased 9.4%. Corporate aircraft operators increased 5.6%. The number of companies and individuals participating in fractional ownership increased by 4.5%. many observers call the most demanding clients of all. These are savvy, upscale, high-flying (forgive the pun) customers, not easy to impress. Skyjet’s international managing director, Judith Moreton, tells us that “Within our industry the expectation of good service is very high, but I believe that as a provider we put much more pressure on ourselves than our customers do. As in any transportation business, | -12-
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