30 Jul 2012
A recent study commissioned by NetJets Europe on business leaders involved in executing 10 percent of global M&A activity found that over half of the respondents expected M&A to increase in the year ahead, but that M&A success factors depended largely on gaining professional contacts to spot key opportunities early on. 65 percent highlighted that building relationships and having face-to-face meetings remain the crucial elements to successfully completing an M&A transaction.
The power of close personal contact continues to be a major force when bringing in success, and business aviation is a key tool that enables executives to travel to hard-to-reach destinations quickly; to create opportunities, forge relationships and execute business strategy. However, there is simultaneously a pressure on CEOs to exercise responsible stewardship of corporate funds, and maintaining a corporate flight department may not always be cost-effective, as many CEOs won’t fly enough to justify the level of investment a privately owned jet represents.
The new financing model bridges the gap between lease and acquisition, allowing customers to purchase a mid-size or long range aircraft
Depending on your flying needs, there are a number of different options available. If you evaluate your needs in terms of the number of flying hours you may require in a year, business leaders can take stock of what is available to them and choose the option that makes most sense for their organisations.
Fewer than 10 hours
If you fly fewer than 10 hours per year, owning even a share of an aircraft isn’t cost-effective. For this level of flying, charter services may make the most sense – but be sure to find one that delivers a level of service you are happy with. Ensure you are satisfied with the levels of safety the company offers, training the pilots receive, availability of the aircraft and how flexible the company can be if your schedule changes. Also, be aware of any hidden costs you may encounter. Your senior executives are often your most valuable assets and it’s crucial that you manage the risk of their business travel.
Fewer than 50 hours
There are two options for businesses that travel this much a year; purchasing a NetJets Europe Private Jet Card, which provides 25 hours of flying time over a one year period (from €143,000) or acquiring the entry level 1/32nd ‘fractional share’ of a NetJets Europe aircraft, which provides better value but on a longer-term three year commitment. The latter brings the additional benefit of owning an asset, which many organisations prefer.
More than 50 hours
For customers who wish to buy into the NetJets Europe Fractional Ownership Programme, but anticipate flying more than 50 hours a year, they have the opportunity to acquire a fraction of a jet starting at 1/16th of a share of an aircraft (50 hours). NetJets Europe manages and operates the aircraft, providing total flight crew management, trip scheduling, ground support and all maintenance. This is a valuable asset for any business with these flying needs, as a share in a NetJets Europe aircraft buys access to an entire fleet for a fraction of what it costs to buy and maintain a single aircraft.
More than 450 hours
For businesses that already own a private jet or do so much flying to justify an outright aircraft purchase, NetJets Europe is now offering a full aircraft management solution including crew recruitment and training, flight planning, crew planning, aircraft hangaring, maintenance, and all related activities. With the largest fleet of business jets in Europe, NetJets has the capabilities, relationships and infrastructure needed to deliver a best-in-class service to jet owners. It can now deliver the benefits of its scale and resources to extend advantages of fractional aviation to individuals and organisations that own their own aircraft.
Jet owners will have the option of using the services simply to have their jets managed, or combine this with allowing their jets to be used by NetJets Europe to provide additional capacity for the fractional business, generating additional ongoing revenue for customers. The programme borrows a core principle from NetJets Europe’s fractional ownership model, charging jet owners a fee proportionate to the amount of flying they do, rather than the more common ‘flat’ management fees broadly used in the market.
In the current economic climate, many businesses are working hard to avoid the large capital outlay traditionally associated with jet or even fractional jet ownership, especially given the scarcity of credit from the traditional lenders. However, corporates still need to fly to do business and remain competitive, and want the financial and tax benefits that leasing alone can’t deliver.
NetJets Europe introduced an alternative in gaining finance to acquire private aircraft. The NetJets Europe direct financing product is the first of its kind in Europe, providing new clients with an alternative financing method with rates comparable to those offered by major financial institutions. This method delivers significant savings compared to leasing on mid-sized jet options, and even greater reductions on the larger cabin models.
The new financing model bridges the gap between lease and acquisition, allowing customers to purchase a mid-size or long range aircraft through NetJets Europe Direct Finance, with competitive interest rates. Customers are only required to provide a low 25 percent down payment. Backed by Berkshire Hathaway, NetJets Europe represents a secure line of credit for the term of the five-year acquisition programmes. The Direct Finance proposition empowers businesses and individuals to purchase the aircraft they need, but changes the way they buy, providing access to funds in a difficult credit climate.
Meeting business needs
Not every business needs to own its own aircraft, and NetJets Europe appreciates this. There are a range of options that represent sensible investments based on flying needs, as well as a strategic decision for CEOs to talk about what assets they want on their balance sheet. NetJets Europe is uniquely capable of delivering a world-class catered service with an unrivalled commitment to quality and safety. Whether flying for business or leisure, around Europe or between continents, alone or with the entire management team, NetJets Europe has an aircraft and a programme to match the needs of each individual business and customer.
For further information visit www.netjetseurope.com or call +44207 361 9620