Corporate Aviation in Today's Economy

Essay by sethstoneUniversity, Bachelor's March 2006

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"Time is money." This statement is as true in today's global economy as it has ever been. To remain competitive means to be mobile. One growing aspect of the corporate world that is becoming increasingly popular is the fractional ownership option of operating a business aircraft. Companies or individuals can own a portion, or a share, of a suitable aircraft, for just a fraction of what an aircraft takes to own and operate a corporate jet.

In this project, several factors will be examined. The first factor is the accessibility to this form of aircraft operation. This will be explored in an attempt to show the favorability of the corporate investment in fractional ownership, based on the number of aircraft deliveries compared to the increases in corporate profits.

The second factor is the corporate outlook-based on profit levels, unemployment rates, and other indicators healthy enough to consider expanding operations enough to absorb the increased costs associated with owning an aircraft, or participating in a fractional ownership program?

The third factor to be examined will be how increasingly unstable fuel costs may affect the prospect of fractional ownership versus complete ownership.

Business aviation has been claiming an ever-increasing niche in the overall aviation industry since the 1960's since the development of the Learjet 10. Business executives began to realize increased time savings through the use of privately-owned aircraft by going around airport terminals and avoiding long lines. Additionally, smaller business aircraft were able to use feeder airports, away from the major air terminals, utilizing runways that were too short for the larger airliners, providing increased flexibility of operations for the owners.

In 1986, a company known as Executive Jet, Inc., introduced a new concept of aircraft ownership, now known as fractional ownership. This form of aircraft ownership allows individuals to buy...