Man with a plan

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Chadi Saade, sales director of fractional aircraft ownership provider Netjets, on developing its Mid-east operation.

What does Netjets do?

The company started in the states in 1986 and is now the largest aircraft operator in the world in terms of private jets, with 150 aircraft. It has an established operation in Europe and has since expanded in the Middle East in recent years.

We've decided to re-launch this region's operation and plan to bring in 60 new aircraft. We already have 16 aircraft being upgraded, but want to market the company in this region after ordering more planes.

How is Netjets different to the industry's charter operators?

Many people call us a charter operation but we don't do that. We offer fractional ownership, so clients own a share of an aircraft with the title transferred to them, and they are guaranteed availability.

They also have transparency on guaranteed costs, which they don't have with charter operators. There is access to a whole worldwide fleet, so you pay a fraction of an aircraft's cost and can fly 365 days a year. Whenever you want to fly give us a call. We will then pick you up and fly you where ever you want to go.

How will the company be different after the re-launch?

There wasn't any aircraft available for sale, so there was no need for marketing. Our model is based on fractional ownership, so once you have sold all the fractions of an aircraft you have nothing else to sell - you just have to upgrade the plane. We have placed an order for 60 aircraft and plan to sell fractional ownerships for them. We are re-launching the sales and marketing activity in the Middle East because there is huge growth expected here.

So you believe fractional ownership is like time-sharing?

It is to an extent, but that's not completely true. If you want to fly private jets you have three options. You purchase your own, charter one or go for fractional ownership. If you purchase you are paying a huge amount for little use in terms of hours. You are paying $35 million to fly 100-200 hours a year, which is a big financial problem. People are spending lots of money for little flying time.

Also, they have to set up a mini airline by sorting out pilots, maintenance and catering, so it's a big headache. Also the aircraft is not available all year round because it sometimes has to go into maintenance.

Why rule out chartering when it's more flexible and less expensive than owning an aircraft?

Chartering is fine for people who fly less than 50 hours a year. But charter operators don't guarantee availability for your aircraft, especially in the Middle East where there is huge demand for planes. You call and say you want to leave tomorrow and travel somewhere but the operator says ‘sorry, we don't have an aircraft' meaning you're stuck.

We guarantee the fractional ownership cost over a five year period while charter operators' prices can fluctuate every 12 months. We guarantee access to a fleet of 750 aircraft worldwide, which for a fraction of the cost allows you to access that many planes.

What other benefits are available to fractional ownership clients?

By purchasing a share in an aircraft you can fly a certain number of hours, so acquiring 1/8 of a plane relates to 100 hours. If you don't fly the 100 hours this year you can carry the remaining time over. You can also borrow hours from next year.

If you are flying to Europe or the US you can access aircraft there. You are spending 1/8 of the $35 million that someone would pay for their own aircraft and you have access to 750 planes. You can upgrade or downgrade depending on where you want to go and how many people you have.

Do other companies offer the same kind of flexibility?

No one does it in the Middle East unless you buy your own aircraft. However, even people who have bought their own plane could spend far less for 1/16 or 1/8 of an aircraft with us.

When did you join Netjets and how big is the company?

I've been here since February and was with Airbus before. There are some common things between us, with both companies focused on selling aircraft. People are buying planes, whether they work for airlines, companies or on an individual basis.

But while ourselves and Airbus are similar in that respect, Netjets is very small in comparison. Airbus has 55,000 people while we employ 7500 people worldwide.

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