New Fractional Operation

wrghflyrnc · October 29th, 2005, 19:12

Has anyone out there ever considered putting together a fractional (sub part K) operation? I'm giving it some thought where I am in Eastern NC. Considering 2 BE20's with the intention of eventually adding a dispatch friendly, mid-range jet. I'm fairly familiar with fractional regs. Would be interested in hearing from anyone with experience or thoughts on this.

CaptChris · October 31st, 2005, 21:15

Let me know what happens. I'll help out in any way that I can... I'm in Raleigh, NC. Shoot me a PM if you want.

NJA_Capt · November 3rd, 2005, 17:15

Quote:

Originally Posted by wrghflyrnc

Has anyone out there ever considered putting together a fractional (sub part K) operation? ...2 BE20's with the intention of...mid-range jet. I'm fairly familiar with fractional regs. Would be interested in hearing from anyone with experience or thoughts on this.

I wish you the best of luck (being a Carolinian myself) but hope you intensely study the pitfalls before starting up. There is a LOT more to it than most people think. Some highly financed companies have tried and failed at a fractional operation such as United Airlines with its Avolar program and the CarinaStar program with new B58s/A36s.

http://www.aopa.org/special/microsoft/articles/baron9905.html
http://www.aviationweek.com/shownews/01nbaa2/topsto37.htm
http://www.ainonline.com/issues/04_02/04_02_ualcorppg1.html

Its not for the lighthearted and doesn't seem to matter if it is a multi $ billion startup (Avolar) or a small local operation (CarinaStar). It is a harder business model than it appears.

wrghflyrnc · November 3rd, 2005, 23:10

Thanks for your ideas. Having seen many fractionals and 135's fail, I think the biggest pitfall is that people get in too much debt. I know that seems to be a foregone conclusion, but folks think they need new Baron's and new King Air's, etc. It's almost always the wrong way to go. Too much debt, to little income in the early stages. The challenges posed by the aviation business today make good business sense a necessary. It's a tough market, but it's not impossible.

SteveC · November 3rd, 2005, 23:27

Here is the website for a local (GRR) based fractional. They've been at it for a few years now, and are still hanging in there. I haven't watched real close, but I think that they have been slowly growing as time goes on. It's an interesting variation from the more popular fractionals like NetJets or Citation Shares. Very focused, with single aircraft type (Citation Bravo), with competitve pricing.

The Company Jet

Jason · November 25th, 2005, 00:41

Quote:

Originally Posted by wrghflyrnc

Has anyone out there ever considered putting together a fractional (sub part K) operation? I'm giving it some thought where I am in Eastern NC. Considering 2 BE20's with the intention of eventually adding a dispatch friendly, mid-range jet. I'm fairly familiar with fractional regs. Would be interested in hearing from anyone with experience or thoughts on this.

Just out of curiosity - how did you decide on a King Air 200?

Jason

wrghflyrnc · November 29th, 2005, 15:42

Reasonable dispatch reliability, good range, good usable load, and good speed. In my opinion, the C90 is too slow with poor usable load. The 300 is a strong competitor, but gives additional expense for type training and the cost of acquisition is much higher with the "average" 300. Considered smaller jets, i.e., CJ2, etc., but all have smaller usable loads and higher acquisition / operating costs.

Jason · November 30th, 2005, 13:30

Ok, you answered exactly the way I thought you would - it was sort of a loaded question, now for the second part of my reply -- The King Air 200 is a great airplane, I'm a big supporter of the King Air line, and you named all the right reasons to buy one but you missed the important criteria! Don't let yourself fall into the trap of buying the perfect airplane for YOU - make sure to get the one that is going to be the perfect airplane for your OWNERS!! That's critical. A fractional operation is going to have a very limited (relatively speaking) market - you can't rely on the "Buy it and they will come" strategy. Make sure you do sufficeint research among your target/potential customers and see what they NEED before you decide on a particular model of aircraft. Granted, the BE200 is one of the best 'all around' airplanes there is but let's face it - if the client needs a 350 then he's not going to be happy in a 200 and won't be a client for long. Likewise, even though you don't consider the BE90 to be a good choice, if the majority of your potential clients take 1 or 2 people on day trips of 150NM then you'd be doing yourself and your client a disservice by spending the additional money on a 200 when you don't really need one. It's all about client wants and/or needs - just make sure you do sufficient market studies first.

Also, I'm sure that you've already thought of this, but start making a list of charter companies that are close to you that fly the same model of aircraft - or something very similar - that whatever you end up choosing. Unless you're going into it with a 'flying club' type mentality where the scheduling is first come, first served you're bound to run into those days where all of the owners want to fly at the same time so you're going to have to have a way of providing that supplimental lift capability. Even with NetJets extensive fleet, they spend a gazillion dollars a year on charter aircraft to meet owner demand. Also, in the contract with the owner, make sure you promise them it will be THEIR aircraft that picks them up.

Good luck - sounds like an interesting project!!

Jason · November 30th, 2005, 15:40

I meant - make sure you DON'T promise them THEIR aircraft

Kingairer · November 30th, 2005, 23:55

...As Jason Rolls up in his Piper Warrior yelling out the little plastic window at signature "Yaw ready to go?"

Mr_Creepy · December 1st, 2005, 08:29

I am really starting to consider a 690B commander. Same speed as the ka200 for half the price with a roomier cabin. Also you have the option of upgrading to dash 10 engines and getting a 320 kt airplane.

The garrets use less gas, too.

Admittedly they do not have the service network P&W has, but there are enough mechanics out there that know garrets.

Kingairer · December 1st, 2005, 11:39

Doesnt compare in comfort in my opinion. Dont hire any pilots over 6 foot tall either.

Mr_Creepy · December 2nd, 2005, 08:50

You mean for the kingair? I agree - the 5'2" ceiling in the 200 is very uncomfrotable. Can't get in those pilot seats without a bit of a contortionist act either.

The Commander pilot seats are much easier to get in, and I really like the ground level door, where you just step in to the cabin. Much easier to load and unload as well.

I used to be a die hard king air fan, but lately I am looking at Commanders with new respect.

Kingairer · December 2nd, 2005, 22:17

I thought the Commander was much more uncomfortable
I could have the seat all teh way back, and it would be hitting a bulkhead and Id be eating the yoke. Loud, Steering funky (but get used to it), similar numbers to the kingair in speed.

SteveC · December 2nd, 2005, 22:36

All I've ever done in one is pull gear and run comm, but I sure remember "loud" as part of the experience. Also remember the pilot/owner spending a lot of time pulling prop blades around. And around. And around....

October 29th, 2005, 19:12	#1
wrghflyrnc Junior Member Join Date: Sep 2005 Location: 7FL6 Posts: 37	New Fractional Operation Has anyone out there ever considered putting together a fractional (sub part K) operation? I'm giving it some thought where I am in Eastern NC. Considering 2 BE20's with the intention of eventually adding a dispatch friendly, mid-range jet. I'm fairly familiar with fractional regs. Would be interested in hearing from anyone with experience or thoughts on this. __________________ Even if you are on the right track, you will be run over if you just sit there

November 3rd, 2005, 23:10	#4
wrghflyrnc Junior Member Join Date: Sep 2005 Location: 7FL6 Posts: 37	Thanks for your ideas. Having seen many fractionals and 135's fail, I think the biggest pitfall is that people get in too much debt. I know that seems to be a foregone conclusion, but folks think they need new Baron's and new King Air's, etc. It's almost always the wrong way to go. Too much debt, to little income in the early stages. The challenges posed by the aviation business today make good business sense a necessary. It's a tough market, but it's not impossible. __________________ Even if you are on the right track, you will be run over if you just sit there

November 3rd, 2005, 23:27	#5
SteveC Ameliorator Join Date: May 2003 Location: GRR Posts: 8,871	Here is the website for a local (GRR) based fractional. They've been at it for a few years now, and are still hanging in there. I haven't watched real close, but I think that they have been slowly growing as time goes on. It's an interesting variation from the more popular fractionals like NetJets or Citation Shares. Very focused, with single aircraft type (Citation Bravo), with competitve pricing. The Company Jet __________________ . If life gives you lemons, throw 'em into a quart of vodka. ~Red Green

November 29th, 2005, 15:42	#7
wrghflyrnc Junior Member Join Date: Sep 2005 Location: 7FL6 Posts: 37	Reasonable dispatch reliability, good range, good usable load, and good speed. In my opinion, the C90 is too slow with poor usable load. The 300 is a strong competitor, but gives additional expense for type training and the cost of acquisition is much higher with the "average" 300. Considered smaller jets, i.e., CJ2, etc., but all have smaller usable loads and higher acquisition / operating costs. __________________ Even if you are on the right track, you will be run over if you just sit there

November 30th, 2005, 13:30	#8
Jason Senior Member Join Date: Sep 2000 Location: Cincinnati, OH Posts: 1,027	Ok, you answered exactly the way I thought you would - it was sort of a loaded question, now for the second part of my reply -- The King Air 200 is a great airplane, I'm a big supporter of the King Air line, and you named all the right reasons to buy one but you missed the important criteria! Don't let yourself fall into the trap of buying the perfect airplane for YOU - make sure to get the one that is going to be the perfect airplane for your OWNERS!! That's critical. A fractional operation is going to have a very limited (relatively speaking) market - you can't rely on the "Buy it and they will come" strategy. Make sure you do sufficeint research among your target/potential customers and see what they NEED before you decide on a particular model of aircraft. Granted, the BE200 is one of the best 'all around' airplanes there is but let's face it - if the client needs a 350 then he's not going to be happy in a 200 and won't be a client for long. Likewise, even though you don't consider the BE90 to be a good choice, if the majority of your potential clients take 1 or 2 people on day trips of 150NM then you'd be doing yourself and your client a disservice by spending the additional money on a 200 when you don't really need one. It's all about client wants and/or needs - just make sure you do sufficient market studies first. Also, I'm sure that you've already thought of this, but start making a list of charter companies that are close to you that fly the same model of aircraft - or something very similar - that whatever you end up choosing. Unless you're going into it with a 'flying club' type mentality where the scheduling is first come, first served you're bound to run into those days where all of the owners want to fly at the same time so you're going to have to have a way of providing that supplimental lift capability. Even with NetJets extensive fleet, they spend a gazillion dollars a year on charter aircraft to meet owner demand. Also, in the contract with the owner, make sure you promise them it will be THEIR aircraft that picks them up. Good luck - sounds like an interesting project!! __________________ ...till we meet again on the high seas...ARRRRGGGGHHHHH

October 31st, 2005, 21:15	#2
CaptChris Senior Member Join Date: Jul 2004 Location: Richmond, VA Posts: 556	Let me know what happens. I'll help out in any way that I can... I'm in Raleigh, NC. Shoot me a PM if you want.

November 30th, 2005, 15:40	#9
Jason Senior Member Join Date: Sep 2000 Location: Cincinnati, OH Posts: 1,027	I meant - make sure you DON'T promise them THEIR aircraft __________________ ...till we meet again on the high seas...ARRRRGGGGHHHHH

November 30th, 2005, 23:55	#10
Kingairer Old Skool Join Date: Apr 2002 Location: Nomadic...World Wide Boobie Bungalow Bouncer Posts: 3,219	...As Jason Rolls up in his Piper Warrior yelling out the little plastic window at signature "Yaw ready to go?" __________________ "I do not proofread"

December 1st, 2005, 08:29	#11
Mr_Creepy Old Skool Join Date: May 2003 Location: In the O-zone Posts: 5,810	I am really starting to consider a 690B commander. Same speed as the ka200 for half the price with a roomier cabin. Also you have the option of upgrading to dash 10 engines and getting a 320 kt airplane. The garrets use less gas, too. Admittedly they do not have the service network P&W has, but there are enough mechanics out there that know garrets. __________________ "You know you're winning an argument with a liberal when they start calling you names" johntenney.com The PEO Message Myspace My Business - PEO Pros

December 1st, 2005, 11:39	#12
Kingairer Old Skool Join Date: Apr 2002 Location: Nomadic...World Wide Boobie Bungalow Bouncer Posts: 3,219	Doesnt compare in comfort in my opinion. Dont hire any pilots over 6 foot tall either. __________________ "I do not proofread"

December 2nd, 2005, 08:50	#13
Mr_Creepy Old Skool Join Date: May 2003 Location: In the O-zone Posts: 5,810	You mean for the kingair? I agree - the 5'2" ceiling in the 200 is very uncomfrotable. Can't get in those pilot seats without a bit of a contortionist act either. The Commander pilot seats are much easier to get in, and I really like the ground level door, where you just step in to the cabin. Much easier to load and unload as well. I used to be a die hard king air fan, but lately I am looking at Commanders with new respect. __________________ "You know you're winning an argument with a liberal when they start calling you names" johntenney.com The PEO Message Myspace My Business - PEO Pros

December 2nd, 2005, 22:17	#14
Kingairer Old Skool Join Date: Apr 2002 Location: Nomadic...World Wide Boobie Bungalow Bouncer Posts: 3,219	I thought the Commander was much more uncomfortable I could have the seat all teh way back, and it would be hitting a bulkhead and Id be eating the yoke. Loud, Steering funky (but get used to it), similar numbers to the kingair in speed. __________________ "I do not proofread"

December 2nd, 2005, 22:36	#15
SteveC Ameliorator Join Date: May 2003 Location: GRR Posts: 8,871	All I've ever done in one is pull gear and run comm, but I sure remember "loud" as part of the experience. Also remember the pilot/owner spending a lot of time pulling prop blades around. And around. And around.... __________________ . If life gives you lemons, throw 'em into a quart of vodka. ~Red Green

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