European VLJ Pioneer Globe Air Preps To Refresh Fleet

A decade on from the very light jet (VLJ) revolution that was stopped in its tracks by the financial crisis of 2008, Austria-based Globe Air is keeping its 15-strong fleet of Cessna Citation Mustangs busy as it contemplates a possible replacement for a model that it believes might go out of production this year. Embraer’s Phenom 100EV appears to be the likely choice, according to Globe Air CEO Bernhard Fragner.

For its part, Textron Aviation insists that it will “continue to produce the Mustang to meet current market demand.” The company pointed out that it also offers the larger, faster and longer-range Citation M2 (priced at $4.5 million), introduced in 2013 as a follow-on from the Mustang (priced at $3.4 million).

Embraer’s Phenom 100EV (at $4.495 million) is the most obvious rival for Globe Air’s affections, with almost directly comparable speed and field length performance, but with less range (1,178 nm) than the M2 (1,550 nm). There are already 50 Phenom 100s in service in Europe, among them four with German charter operator Arcus Air. Globe Air says it will seek the input of customers before making a final choice.

Last year the Globe Air fleet logged 7,300 sectors on flights in Europe averaging an hour and 25 minutes, generating high rates of utilization averaging 686 flight hours. The average passenger load was 1.3 per flight and, with total revenue of €22 million ($23.8 million), average revenue per flight stood at $3,260.

“People are surprised by how affordable our prices are, and I’m convinced that VLJs can be even more successful when the market picks up,” Fragner told AIN. He believes that the success of a company formed in the golden age of European business aviation in 2007 stems from the decision to focus purely on air-taxi work, rather than diluting its effort in fields such as aircraft management.

Globe Air is almost completely self-sufficient, operating its own maintenance facilities at Linz in Austria and the Italian city of Genoa. It claims to hold a parts inventory larger than that stored at Textron’s warehouse in Dusseldorf, Germany, and has a pair of trucks driving spares around Europe to keep aircraft flying. Its support facilities do not take on any third-party work. “We created a sort of micro-ecosystem for ourselves and never considered any other business models,” commented Fragner.

In 2016, the Globe Air Mustangs flew to 384 of 1,200 European airports from which they can operate. On popular routes such as Paris to Geneva and Paris to Nice, the company now claims to be the dominant private aviation operator, having overtaken fractional ownership provider NetJets. It also competes with France’s Wijet, which merged with the UK’s Blink last year to offer a combined fleet of 15 Mustangs.

Opportunities for Growth

According to Fragner, travelers’ concerns in the wake of a wave of terrorist attacks in Europe—especially events like last year’s bomb attack at Brussels Airport in Belgium—have been a factor in the growing interest in charter. He also credited new online charter booking sites, such as Stratajet, Fly Victor and Jet Smarter, for improving consumer access to charter flights. “Today, 40 percent of our revenue comes from these new platforms, and four years ago it was less than 5 percent,” he said. “These guys are doing a phenomenal job at marketing the industry. The main investment isn’t in the technology; it’s in the marketing budget. It’s a race to be the next Uber and maybe one or two of them will survive.”

Globe Air guarantees aircraft availability with 48 hours' notice, or 24 hours for its biggest and most loyal customers. Fragner said that chasing empty-leg bookings isn’t a priority if this means compromising availability for its main customers.

To achieve this responsiveness, the operator has invested in IT to help it manage the availability of both aircraft and crew. According to Fragner, current European Union flight time limitations make it impossible to increase aircraft utilization. “For that you would need to have a second crew available each day and it would be a logistical nightmare,” he explained. “We are pushing the European Commission for change, and this might come in two or three years.”

Another regulatory change that European charter operators are pining for is the anticipated relaxation of field length requirements for commercial flights from the current restriction to 60 percent of available runway length to 80 percent. This is anticipated next year and could open many more airports to charter flights.

Another issue the charter sector is having to confront is a worsening pilot shortage. On this score, Fragner says the industry has only itself to blame. “We did not do enough training and since 2006 we haven’t given people enough incentive to be pilots,” he told AIN. “We need to treat pilots better. We need new programs for training, and this may well involve us doing more training ourselves. We created our own training organization in March last year because we saw this trend coming.”

In the meantime, Fragner sees 2017 as another year in which he pursues growth for Globe Air despite the fact that he has no expectations of economic recovery in Europe. “The VLJ sector is growing mainly through downsizing by customers for midsize aircraft, and we believe that we can grow another 20 percent with more and more people booking flights through apps on their phones,” he predicted.

This year, Globe Air expects to add three more Mustangs—pre-owned aircraft—and it could see a case for adding two more as it aspires to annual revenue of €30 million ($32.5 million). So for this European operator at least, while the VLJ revolution may have proved to be overstated, the evolution toward the use of more cost-effective light jet charter options has proved to be rewarding.