Building big
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Posted Date: 16/09/2008
Issue: Executive & VIP Aviation International October 2008
Publication: Executive & VIP Aviation International
Bing Chen, the ambitious Chief Executive Officer of Switzerland-based VistaJet, says he prefers to talk conservatively about his company’s plans. “It is better to under promise and then over deliver,” he comments. However, these are heady days for the company and Chen will do well to play down the recent acquisition of Bombardier’s international charter operation, Skyjet International – a move that has elevated VistaJet to its current position as the second largest business jet operator outside of North America.
SkyJet was first launched in March 2002 as Flexjet Europe, but was later rebranded and quickly established itself as a global business jet charter service, consolidating some of the world’s leading charter operators – VistaJet included – into a single network.
Having announced a Memorandum of Understanding with Bombardier in May, VistaJet confirmed the signing of a definitive agreement to acquire Skyjet International for an undisclosed sum on 1 July. The acquisition gives VistaJet a well-established charter programme with offices in Farnborough, Hong Kong and Dubai, although SkyJet’s North American operations remain unaffected by the sale.
For VistaJet, the acquisition was all about expanding its global reach and leveraging the synergies between Skyjet’s successful card programme and its own strength in the on-demand sector. The latter is being developed further using a new Flight Solutions Programme that customers can participate in either as owners or “partners” in an aircraft.
As Chen explains, the programme sees customers pay a pre-defined hourly rate on a quarterly basis according to the type of aircraft they have committed to, with an upper limit of 600 hours for the partnership solution and 400 hours for the ownership solution. “We offer guaranteed availability, with the customer only paying for flying hours, not repositioning on empty legs,” he says. “It is about simple, transparent and affordable solutions for pure luxury services.”
And it is an approach that he feels ties in well with Skyjet, a company that has built both a solid reputation and an excellent geographical reach. “We have acquired a reputable brand name with a super rich network that combines well with our own bases,” he says.
Skyjet also comes with an impressive customer base that offers some 15,000 committed hours per year. The combination of SkyJet’s customers with VistaJet’s increasingly comprehensive fleet coverage should prove a good match, believes Chen. “We can provide the best possible service for customers of both companies and really accelerate our vision to be a leader in redefining the business aviation standard.”
According to Chen, it will now be very much business as usual for SkyJet employees and customers, albeit with the latter having access to VistaJet’s own dedicated fleet. “They now benefit from a consistent, ultra-luxury experience, all for the same price as before,” says Chen. “The move has been warmly welcomed by customers.”
The acquisition also speaks volumes for the company’s rapid development since its launch just three years ago. “It is a major milestone and in many ways a vindication of what we have been doing,” says Chen. “Bombardier is a top manufacturer and to sell a key charter operation to us is proof of our reputation and success so far.”
But VistaJet’s journey from being Bombardier’s largest customer to the owner of its charter operation has not been universally welcomed. “Competitors are a little skeptical,” admits Chen. “However, the facts and the results should be the best judge. VistaJet has redefined the business aviation industry and set a standard that benefits customers and the industry.”
Looking ahead, the acquisition of SkyJet should help VistaJet step further into new markets – an ambition also being fed by a dramatic increase in fleet size. The company already operates a diversified fleet of some 35 medium- to ultra-long range aircraft, from the Learjet 40 XR to the Global Express XRS. It also has three Airbus Corporate Jets on order, with delivery scheduled for 2010.
However, this number will expand rapidly over the next four years following an announcement earlier this year of a firm order with Bombardier for 35 additional business jets, plus 25 options. If all options are realised, the $1.2 billion order will triple the size of VistaJet’s existing fleet.
The firm orders cover 11 Challenger 605 jets, 13 Learjet 60 XR and 11 of the new mid-size Learjet 85 jets. The aircraft order, plus the integration of SkyJet, will expand VistaJet’s fleet to a total of 94 aircraft by 2012, says the company.
In addition to strengthening core markets such as Russia, CIS countries and Europe, the aircraft will help the company realise its ambitions in new markets such as Asia and the Middle East. This process began in July, when VistaJet launched on-demand operations at Kuala Lumpur’s Subang SkyPark using one Challenger 650 and one Challenger 850.
And it has been a case of so far so good in this potentially complicated market, with VistaJet having already signed up customers in Mainland China and Hong Kong. The plan now, says Chen, is to use Subang as a hub for expanding operations into additional markets such as India and Dubai.
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