March 20, 2023
March 6, 2023
February 20, 2023
February 6, 2023
Last month I wrote about the fractional ownership aircraft company Avantair’s legal problems with the SEC. The company’s exclusive fleet of Piaggio P-180 Avanti turboprops had been officially grounded by the SEC pending the outcome of numerous lawsuits brought against the company. On July 11, 2013, Business Aviation explained that the company had developed plans for a new company, tentatively named “NewCo,” offering only East Coast operations. The object was to return to flight so that the company could manage it’s $122 Million is debts, mostly related to owner lawsuits and aircraft repossessions.
However, as reported in AIN Online, this does not appear to be an option.
The question of whether Avantiar will fly again is not an easy one to answer. The company has been bolstered by the Italian Piaggio Aero manufacturer with $1 Million in direct funding coupled with another $1 Million extended as credit for parts. However, the Avantai requires $4.5 Million to fund restructuring and is attempting to both recover losses from client/owners as well as draw in new investors. Whether the company will manage to manage this or not remains to be seen. As of July 16, 2013, Avantair appears to be meeting with considerable owner resistance.
One of the problems with fractional ownership may lay at the core of the problem for Avantair. When someone buys into a fractional ownership arrangement, the same problems that plagued time-share properties years ago arise. In the case of time-share properties, people often found that although they owned time in a particular property, they often took vacations elsewhere at times. In addition, people often found that they could not arrange their time off in the time frame they “owned” the resort property. So eventually, the appear of fractional ownership of a resort waned and many companies folded.
It is far to early to tell if the same thing that happened with many time-share resorts will happen with fractional ownership aircraft companies such as Avantair. Avantiar President David Haslett contacted owners earlier this month in an effort to collect a $25,000 “maintenance assessment” but as reported by AIN, many refused to provide additional funds. It may be that the age of fractional ownership of aircraft has peaked and is in decline, much as the time-share craze peaked then waned.
Most former fractional owners are returning to Charter Flight Group and other such companies because they recognize that in the long run, their costs are better controlled in this way. Not only can the get the right aircraft at the right time, but they do not have the headaches and hassles associated with maintaining an aircraft they may not use. This is not to imply that fractional ownership is a bad thing or that Avantiar is necessarily a bad company. Not at all. But the reality is that while fractional ownership may be aqdvantageous for some, it is not for most.
For most business travelers who prefer a private flight over commercial, the optimum choice remains private aircraft charter. This is largely because of the flexibility afforded. While we hate to hear of the problems facing Avantair, we have to admit it has been good for our business as many former fractional aircraft owners are choosing charter flights.
If you’ve been put out as a result of the Avantair grounding and would like to return to private charters, give Charter Flight Group a call today at 1-888-634-7449 and discover the CFG Difference.
