Last week, we posted part 1 and part 2 of our interview with Flight Options CEO Michael Scheeringa. Today, we wrap up the series with a closer look at the fractional jet provider’s two main products: Fractional First and JetPASS Ultimate Travel.

In a phone interview with Helium Report, Scheeringa shared his insights into the changes his company has undergone over the past two years. “In 2005, Flight Options owned a complex fleet, had just completed a merger, and was trying to be everything to everyone,” Scheeringa said. “We put on our ‘consultant hats’ and tried to figure out what consumers want.”

According to Scheeringa (photo, right), the Flight Options’ team concluded the following:

• Consumers do not want to buy the whole airplane if there’s a good alternative
• Consumers value high-end safety, consistency of experience, and one-stop shopping

Flight Options set out to design two new programs that “provide better economic value without deteriorating experience,” says Scheeringa. In 2006, the firm reduced its fleet to four aircraft types and launched an updated fractional membership program (JetPASS Ultimate Travel) and a fractional ownership product (Fractional First).

JetPASS Ultimate Travel

Flight Options developed a fractional membership program different from typical jet card programs. Rather than tying hours to a specific aircraft type, JetPASS Ultimate Travel provides members with access to three different cabin sizes for a $100,000 membership fee. Scheeringa says the firm was the first to introduce peak/off-peak pricing and claims Flight Options offers the best value for off-peak travel.

Scheeringa noted the fractional jet card market has been growing at a 50% annualized rate, with prices typically 10-20% greater than fractional ownership and a 50% premium over on-demand charter. In comparison JetPASS Ultimate Travel grew 300% year over year in the fourth quarter of 2006, according to Scheeringa. The fractional membership program now represents 10% of Flight Options’ revenue, he added.

Fractional First

“More simple, more transparent, and greater value,” are the three phrases Scheeringa used to describe Flight Options’ fractional ownership program. Fractional First is intended to be a flexible program that addresses the “over/under” challenge faced by fractional owners at the end of their contracts. For example, a 100-hour share owner can fly between 80 and 120 hours and only pay a management fee for the actual hours flown.

The program also includes a pass-through fuel cost, an incentive to fly “long haul” trips, and does not include taxi-time as part of usage. Scheeringa says the typical 35% premium for fractional ownership over the cost of charter travel is reduced to 20% with the Flight Options program.

What’s Next

In the near future, Scheeringa says Flight Options will add a third program to help owners’ manage planes if they are in the Flight Options fleet. The company currently operates and mainatins a fleet of 150 dedicated aircraft.

Helium Report Perspective

Flight Options has made some big changes to streamline their fleet and simplify their product line. There are currently four different jets spanning four different aircraft classes:

1. Beechjet 400A/Hawker 400XP (light; 7 passengers)
2. Hawker 800XP (mid-size; 8 passengers)
3. Citation X (super mid-size; 8 passengers)
4. Legacy (heavy; 13 passengers)

The Fractional First and JetPASS Ultimate Travel programs are nearly as complex to decipher as cell phone programs, but both are designed to address consumers’ needs. The key selling point of Fractional First appears to be distance-based pricing and the program best suits owners who typically travel four or more hours. The taxi deduction and fuel surcharge are nice extras. The fractional membership program favors the off-peak traveler with the added benefit of accessing four different jets for the same membership price.

If you have experience with the Flight Options, write a review about Fractional First or JetPASS Ultimate Travel.

Read the entire series, “Interview with Flight Options CEO Michael Scheeringa”:

• Part 1: Fractional ownership vs. on-demand charter
• Part 2: Safety

Note to Readers: Halogen Guides is the new name of Helium Report.