Turboprops for Europe
Posted Date: 01/09/2007
Issue: Executive & VIP Aviation International September 2007
Publication: Executive & VIP Aviation International
The popularity of turboprops for the European fractional market is demonstrated by Jetfly’s selection of three turboprop fleets to fuel its fractional business. Founder and President of Jetfly, Jacques Lemaigre du Breuil, explains why turboprops work for Europe
Europe’s turboprop manufacturers are reaping the rewards of Europe’s fascination with the fractional concept. Born in the US and catching on fast in Europe, fractional ownership is finding increasing favour. But Europe cannot be compared with the US and fleet selection for Europe is impacted not only by aircraft operational, performance and cost considerations, but also by airport and runway infrastructure. Short runways are typical in Europe; this puts turboprops squarely in the frame. Jetfly – the Luxembourg-based fractional ownership company – has chosen the turboprop route and, for the time being, chosen not to pursue business jets and very light jets until market conditions demand a reassessment of this strategy. Jetfly has achieved 78 co-owners in its fractional portfolio since its inception in 1999. To achieve this number, the company, through its penchant for turboprops, must be doing something right.
In fact, just recently, the fractional company has ordered four Piaggio 180 Avanti IIs to be delivered in 2008. Also, the fractional company has ordered six Pilatus PC-12s, to be delivered through 2009. Jetfly had previously ordered one PC-12 scheduled for delivery in November 2007; these seven new aircraft will bring the Jetfly PC-12 fleet to 13. Finally, Jetfly has ordered four EADS Socata TBM 850s to supplement an existing fleet of three TBM 700s; the first of these TBM 850s has already entered into service with Jetfly’s co-owners.
Making choices
So what drove the decision to stick with turboprop technology and why the mix of three fleets when it would have been so much easier to manage less of a mix? Founder and President of Jetfly, Jacques Lemaigre du Breuil, responds: “This was our co-owners request.” He adds: “To date, they are flying a mix of Socata and Pilatus aircraft; from 2008, Jetfly co-owners will also have the option of flying Piaggio Avanti IIs.” “Co-owners are asking for more speed; more speed means two engines. So we had to move from one to two engines. We thought about jets and our co-owners were not so happy with that idea because speed would bring with it a very small cabin,” comments Lemaigre du Breuil.
Jetfly made a strategic decision not to pursue the very light jet route and looked at Cessna Citations instead; but it decided the cabins were too small for the market it serves. “So we moved up, and up and up, and then we arrived at the Citation Excel. This delivers good speed and a good sized cabin. Then co-owners asked if they could land in St Tropez with this aircraft and we replied ‘no’. You cannot have speed, this size cabin and short landing capability,” he remarks.
Having pursued the jet route to its limit, Lemaigre du Breuil found the answer to his co-owners’ wishes in the Piaggio. “That is why we moved from the single to the twin-engined aircraft. The Piaggio has a huge cabin, speed and short take-off and landing capability,” he says. As to the number of aircraft ordered in each category, Lemaigre du Breuil is confident he has the calculation right. “All the aircraft to be delivered in 2007 are already sold. We are now selling the aircraft coming in February 2008; the Piaggio coming in May 2008 is already sold. That is the reason we need to secure our purchases for the next two years,” he adds. There is no decision at Jetfly to preclude future orders for jet aircraft; orders are simply a reaction to fractional share purchasing decisions.
“With the three aircraft types we have now, we have a good response to the European market and I am quite convinced that the turboprop is a good tool for Europe because of middle distance missions and short runways,” comments Lemaigre du Breuil. “Our turboprops can land at 2,200 airports and a jet can land at only 700. It’s only a question of runway.”
Jetfly’s fractional shares
The typical number of fractional co-owners at Jetfly per aircraft is between four and six; the maximum is eight. What kind of mindset does Lemaigre du Breuil have to adopt to achieve his fractional business plan? “I am like an asset manager because the aircraft are owned by our co-owners and so they are not on our balance sheet. But as a banker I take care of all requirements associated with the asset, such as insurance, maintenance, pilots and operations, but we receive fixed revenue to cover that,” he responds. Each fractional contract is for a five-year term which is renewable for another five-year term. “We don’t want aircraft aged more than 10 years in the fleet,” states Lemaigre du Breuil. During the first five-year period, Jetfly guarantees the monthly management fee and the hourly flight hour fee; only fuel remains a variable cost. Early exit from the plan is available at which point Jetfly remarkets that share at market value without guaranteeing repurchasing the share itself.
In terms of managing the assets, Lemaigre du Breuil says: “It is always easier to manage one type of aircraft but the market is asking for more speed and different types of cabin at different prices. Maintenance is simplified somewhat by all three aircraft being powered by the PT6 engine; the TBM and PC-12 also have the same avionics. The commonality of avionics enables Jetfly’s 26 pilots to handle both the TBM and PC-12. New pilot recruitment and training is on the cards for the Piaggios. With the interior for the PC-12 designed by Philippe Starck, the TBM850 designed by Jean-Michel Wilmotte and the Piaggio Avanti II designed by Jean Nouvel, Lemaigre du Breuil expects all three fleets to score extremely highly in the beauty stakes.
Spread and extent
So where are Jetfly’s co-owners based and how far afield does Lemaigre du Breuil expect his operation reach? “We have roughly 30% of our co-owners in Switzerland, mostly in the Geneva area, but also in the mountains because of the short take off capability, and in the Zurich area. We have 20% in France (Paris and the South of France), 20% in London and then we have some in Belgium, the Netherlands, Luxembourg and Italy,” responds Lemaigre du Breuil.He expects London to be the big boom market of western Europe, driven in particular by new wealth emanating from that city. “I think there will be huge growth in London,” he says. Wherever the European market emerges, Lemaigre du Breuil is confident his new fleets will meet the needs of prospective co-owners to fly higher, further and faster, at a reasonable cost.
