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Flight Options to Add Citation X
Fractional ownership operator Flight Options is adding a
new aircraft model to the upper end of its fleet this autumn-the
Cessna Citation X.
 The Cleveland-based
company disclosed that is acquiring five pre-owned Citation Xs,
which are scheduled to join the fleet beginning on November 1. Price
of a one-sixteenth share in the aircraft is $937,500, which Flight
Options chairman and CEO Kenn Ricci says is 20% less than the cost
of a new aircraft. He says initial demand for the new aircraft is
coming largely from Hawker 800XP owners who want the increased speed,
range and lift of the Citation X. He added that Flight Options'
Falcon 50s have also been popular with upwardly mobile 800XP owners.
According to Ricci, there has been a shift in the fractional market-with
demand increasing for light and midsize jets, while demand for
heavy jets is declining. Ricci says Flight Options is well positioned
to capitalize on the change, with seven products priced below
$9 million, while competitor NetJets offers only one.
Flight Options is also benefiting from softness in the used aircraft
market. Ricci notes that used aircraft now entering the fleet
tend to be of very high caliber-and much younger than similarly
priced versions available during the used aircraft boom of the
late 1990s.
With fractional demand for the large cabin and ultra-long-range
aircraft almost non-existent, Flight Options is taking a wait-and-see
approach to the market. The company had been an early customer
for the Fairchild Dornier Envoy 7, the future of which appears
bleak. Ricci says his company is considering other options, though
he continues to have high praise for the projected price and capability
of the Envoy 7.
In the months since merging with Raytheon Travel Air, Ricci says
that sales of pre-owned aircraft are outpacing new aircraft in
its Factory Support Pricing programs by a three to one margin,
adding that it's too early to determine whether that trend will
continue. Ricci said there has been progress in Raytheon's desire
to cash out its initial investment in the former Travel Air program.
Without disclosing specifics, Ricci says that a single financial
institution has committed to providing the financing and expects
a deal to be announced later in the year. When details are released,
it will also help place a firm valuation on Flight Options in
the eyes of the financial markets.
Flight Options now operates 205 aircraft for 1,909 owners. The
company employs 1,550 people, 900 of whom are pilots. Ricci projects
that the company will operate 497 aircraft and employ 2,400 pilots
by the year 2006.
By David Rimmer
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