Shaircraft Wins for NetJets Owners

Shaircraft recently completed a hugely successful negotiation of a new share contract for a Sovereign share. With each new iteration of its contracts, NetJets has sought to put more and more costs on the owners and limitations on the liquidity of their shares, while at the same time watering down NetJets' obligations.

In negotiating well over 100 changes to the NetJets' standard contract, Shaircraft was able to:

1. Increase the liquidity of the share by improving the buyback process and limiting restrictions on transfers to third parties.
2. Guarantee access to future program enhancements.
3. Improve restrictions on ad hoc price increases.
4. Improve renewal terms.
5. Strengthen performance standards for NetJets.
6. Add concessions to the contract that will increase value and reduce costs for the owner.

If you're considering investing in a fractional share, with NetJets or another provider, we'd be happy to help you get the most out of your investment.

Shaircraft Recommends: La Playa Golf and Beach Resort

Private aviation and golf go together like peanut butter and jelly. If you're looking for the ultimate golf getaway here in the US, allow me to personally recommend La Playa Golf and Beach Resort. Located in sunny Naples, Florida, La Playa is just minutes from the Naples and Fort Myers airports. They offer excellent accommodations on the beach, phenomenal restaurants and superior service. Their golf course is very highly rated and also is the home of the David Leadbetter Golf Academy. Please feel welcome to e-mail me if you'd like a personal referral to them.

Making the Right Jet Investment

Recent reports indicate that private aviation may be bouncing back slowly after a painful economic slump. This "recovery" has yet to be proven industry-wide and, as always, any investment in private aviation should be carefully considered and undertaken only with the guidance of an experienced private aviation attorney.

If you are considering a first-time investment in private aviation, or perhaps switching to a different program or provider, how should you determine which option is right for you? Fractional ownership? A jet card program? On-demand charter? A combination of investments?

Here are a few of the questions we ask our clients in determining which of the many private air travel options is right for them:

• What is your budget?
• Where and when do you fly?
• How far in advance do you plan your trips?
• How many passengers and how much luggage do you take?
• Do you have specific aircraft preferences?
• Can you take advantage of depreciation tax deductions?

I tell my clients that their goal should be to purchase maximum flight time at minimum cost on aircraft that best fit their needs and that are operated by reliable and financially stable companies. It goes without saying that making the wrong choice can cost you dearly. On the flip side, making the right choice can be life-changing - freeing you from the flight delays, intrusive security and horrendous service that characterizes the commercial airline experience.

For a fuller analysis of how to make the best jet investment, click here for my recent article, “Private Air Travel: What Investment is Right for You?”

Year-End Private Jet Deals – Only Fools Rush In

Around this time of year, private jet providers, often pressed to meet sales quotas, begin aggressively marketing year-end promotions that tout significant savings and other incentives. While I don’t think you should hold off on making a deal, my advice is to take your time and do your homework so that you make the best deal:

• Take the time to thoroughly understand your needs and budget.
• Identify the best type of program(s) for you (i.e. jet card, fractional, charter, etc.)
• Shop the various providers for the most competitive offers.
• Understand the cost and, of course, read (and negotiate) the fine print.

After all, the cost of making the wrong deal will far outweigh any year-end benefits and incentives.

For more tips on navigating year-end jet deals, click here for my article, “Year-End Private Jet Deals – Only Fools Rush In.”

How to Ensure Hassle-Free Holiday Jet Travel

With the holidays just around the corner, it pays to plan ahead to ensure that your holiday jet travel is trouble-free and all that you bargained for. Here are some tips:

Play the Slots — Some more popular airports have limited landing slots so your provider may require more advance notice for these flights.

Avoid Peak Travel Days — Many designated “peak travel days” fall on and around holidays. On such days, access to aircraft is more restricted and delays are more common. Whenever possible, schedule flights on nonpeak days. You’re much more likely to avoid a charter and to fly on your preferred schedule.

Take Advantage of Guaranteed Upgrades — Check your contract and if it so permits, consider upgrading to a larger aircraft to accommodate more travelers and extra luggage. Request the upgrade well in advance and avoid peak travel days.

Consider Simultaneous Use — When transporting family from multiple locations, ask your provider for use of two aircraft on the same day. This capability usually is granted to owners of larger shares on larger aircraft, but sometimes can be negotiated on smaller shares.

Say No to Charter — During busy periods, fractional providers rely more than usual on charter aircraft. If you’re a fractional owner _ who is averse to flying charter, let your provider know up front and insist that a note to that effect be included with your request. That way, when fleet aircraft are stretched thin, they’ll be more likely to send one to you and pass the charter on to the next guy.

Build a Relationship — Communicate your needs and concerns to your sales rep or a senior manager. He or she has a stake in making sure your trip goes well and so can be an additional voice advocating on your behalf.

Bottom line: An understanding of your contract rights as well as careful planning are essential ingredients in making the most of your jet travel — especially during peak travel periods.

For more information about how to ensure that your holiday jet travel is hassle-free, click here to download my article, "Beating the Holiday Rush."

Shaircraft Helps Four Deserving Veterans Fly to The National Veterans TEE Golf Tournament

Last month, we were asked by the U.S. Veterans Administration and the PGA's First Tee Program to help secure travel for four visually impaired, disabled veterans so that they could participate in the National Veterans TEE (Training, Exposure and Experience) Golf Tournament in Riverside, Iowa.

The four veterans—David Zang (Navy), Michael Smith (Army), Ronald Cody (Marines) and Joseph Taylor (Marines), combined, have served our country for over 36 years, from Vietnam through the Gulf War. Each was selected to participate along with over 200 other heroes in the golf tournament as a reward for their success in completing the Blind Rehabilitation Training Program offered by the Veterans Administration. In addition to their visually impairments, these wounded warriors suffer from other debilitating conditions including prostate and bladder cancer and melanoma, severe arthritis and the effects of a stroke.

Through our ShairGive program, we called upon our generous clients and contacts who rallied to the cause. Within days, we were able to secure free air travel for these deserving veterans. The trip was a great success. As one veteran put it, "My attendance at the [Tee Tournament is] yet another boost to…regain confidence and the ability to once again share with others how wonderful it is to excel regardless of our ‘bumps in the road.’”

Thanks to everyone in the Shaircraft community who answered the call for this worthy cause. (Special thanks to Alan Meltzer of The Meltzer Group, Joyce Bosc of Boscobel Marketing Communications, Dorothy White of Sentient and Shawna Erviti of Sky Limo Air Charter.) We will continue to look for opportunities to help veterans and others in need through our ShairGive program.

Donations of Private Flight Time Urgently Needed to Help Four Disabled Vets

Through its ShairGive program, Shaircraft Solutions, a private aviation law and consulting firm, working with the U.S. Veterans Administration and the Professional Golf Association’s First Tee Program, is seeking donations of flight time on private aircraft to help four visually impaired disabled veterans participate in the National Veterans TEE (Training, Exposure and Experience) Golf Tournament in Riverside Iowa, September 6 – 9, 2010.

The four veterans in need—David Zang (Navy), Michael Smith (Army), Ronald Cody (Marines) and Joseph Taylor (Marines), combined, have served our country for over 36 years, from Vietnam through the Gulf War. Each has been selected to participate, along with 200 other veterans, in the Tee Tournament because they have excelled in completing the Blind Rehabilitation Training Program offered by the Veterans Administration.

These wounded warriors suffer substantial visual impairment as well as other debilitating conditions that include prostate and bladder cancer and melanoma, severe arthritis and the effects of a stroke. Yet, they have persevered and continue to work toward regaining a full and active lifestyle.

Unfortunately, commercial air travel from Florida to the Tee Tournament in Iowa City, Iowa involves time consuming and arduous connections that, due to their respective disabilities, make the trip impossible for these heroes. Shaircraft is asking the private aviation community to step up and donate a flight on September 6, 2010 from West Palm Beach, Florida to Iowa City, Iowa and a return flight on September 10, 2010.

“We are honored to have this opportunity to demonstrate, if only in a small way, the respect we have for these fine servicemen,” says CEO, James D. Butler. Shaircraft works pro bono with donors and charities to help facilitate charitable contributions of flight time on private aircraft.

Time is short. If you are able to help, please contact James D. Butler at (301) 652-9885 or jbutler@shaircraft.com.

Quotes from the veterans themselves:

“My Blind Rehabilitation Center experience was a life changing event. Prior to…[it], I was embarrassed and reclusive regarding my vision impairment – attempted to hide…it. Being at the BRC gave me the confidence to know that regardless of how my condition may progress, I will be able to live a full and happy life…Now, just having my white cane with me at all times, provides me an incredible level of confidence, pride and comfort. No limitations – and it just keeps getting better and better every day. My attendance at the [Tee Tournament] will be yet another boost to…regain confidence and the ability to once again share with others how wonderful it is to excel regardless of our ‘bumps in the road.’”

“My visual disability is quite rare and a prognosis is not possible…With my wife not very mobile, and me not being able to drive, I have been too sedentary and not out and about as I use to be…I think this will be very positive for my psyche and a chance to shine in competitions and participations which are more often lost in my past.”

More information about the Tee Tournament is available at http://www1.va.gov/opa/pressrel/pressrelease.cfm?id=1940.

Survival Tips — What to Do if You’re Stranded

A major reason you fly privately is to avoid delays and other hassles. Yet, summer is a heavy travel season for all private jet providers--fractionals, jet card companies and charter operators. In such heavy demand periods, variables like weather and equipment problems, as well as pilot work rules, can wreak havoc on flight schedules—inevitably causing delays and even some flight cancellations. It makes sense to plan for this possibility. Here are five tips that will help you survive:

• Establish Your Rights Up Front — Make sure your contract spells out your rights to on-time departures, force majeure delays (like inclimate weather) for which the jet company is not responsible, and your rights in the event that an unexcused delay occurs.
• Negotiate, Negotiate, Negotiate! — Often times, contract provisions regarding your jet company’s performance obligations are negotiable. Get specifics regarding on-time departures and try to minimize excused delays.
• Get it in Writing — If your flight is delayed, maintain a paper trail establishing that fact and the reasons given so that later on you can prove that you’re entitled to compensation.
• The Squeaky Wheel… — If you’re not getting the response you need, ask to speak with senior management personnel.
• Follow Up and Insist Upon Compensation that is Valuable to You — Ask for compensation that’s most valuable to you, i.e., short leg waivers, guaranteed availability, ferry fee waivers, guaranteed upgrades, etc.

For more insight into how best to handle service problems, click here for the full text version of: “Survival Tips — What to Do if You’re Stranded"

Private Aviation Recovery--Encouraging News But Still a Bumpy Ride

Recent reports indicate a bit of an upswing, both in the market for private jets and in private jet operations. Quoting JP Morgan's monthly business jet report, AIN Alerts indicates that the pre-owned jet inventory of in-production models fell to 11.9 percent in June--the first time it has dipped below 12 percent since October 2008. This dip was due to mainly to tightening of midsize aircraft inventory, while the supply of light jets increased slightly. Pre-owned aircraft pricing inched up by a half percent last month, but only due to a firming up in the large-cabin jet segment. Prices for light and midsize jets decreased by around 2 percent.

JP Morgan reported that business jet flight operations in May grew year-over-year by 12.5 percent. Although this increase was less than the year-over-year increases in March and April, it nevertheless continues a positive trend. Nevertheless, ARGUS reported only a 4 percent year-over-year increase in business aircraft flights in June. Fractional flying led the way with a 6.7 percent increase. Mid-size jet charters increased by a whopping 18.9 percent and flights utilizing fractional turboprop flights, mainly Avatar, were up a solid 15.6 percent.

All in all, it appears that the good news continues to outshine the bad, although the industry recovery remains painfully slow. The growth in charter flights and fractional turboprop operations would seem to indicate that flyers are approaching the market gingerly and looking very hard at flying costs. That's just as I'd expect.

Private Air Travel Decisions: You’ve Got to Have an Attorney on Your Side

If you are considering an investment in private flying, should you seek the advice of an attorney? The answer, in no uncertain terms, is yes!

Most private air travel arrangements, such as buying a fractional jet share or buying into jet card or block charter programs, involve rather complicated legal, regulatory and liability issues, and substantial dollars, and so deserve careful legal review.

As a general rule of thumb, I’d recommend that anytime you’re parting with more than $25,000 in exchange for a promise by a jet company to fly you sometime in the future, you should have an experienced attorney review the paperwork. Indeed, even if you’re just booking a charter flight, which may cost less than $25,000,, issues like cancellation fees, aircraft and crew specifications, safety standards, etc. are likely to be covered in the fine print that comes with most standard charter contracts. When we broker a charter flight for our clients, we pay close attention to these details.

Jet companies, fractional ones in particular, have a subtle way of making their contracts seem simple (and so non-threatening). They print them in a way that makes them seem short and full of “boilerplate.” Some will even tell you that they don’t change their contracts and, “Everyone signs the same documents.” (We recently negotiated over 150 changes to one such company’s contracts.)

The more risk – financial, legal, etc. - you assume (and there is always risk, contrary to what a jet company may tell you), the more important it is that you have experienced legal counsel review and negotiate these contracts. (Even in the case of some jet card programs, the contracts reflect complicated legal structures and can run to more than 90 pages, notwithstanding the fact that in their ads, they make them look like simple credit cards!)

As with any capital asset purchase, you want to make sure that the asset is liquid and that you can get a fair price for it when you sell, even more so in the case where the fractional company knows much more about the jet market than you do and when you’re almost forced to sell back to them. We hear from fractional owners every week who wish they’d paid more attention to the details of how they’d liquidate their fractional share and how the value of that share would be determined.

When you are putting thousands, or millions, at risk, you also want to make sure that the jet company’s promises are ironclad and that you have real and workable recourse if it doesn’t live up to its end of the bargain. Again, as you’d expect, the fractional companies draft their contracts in a way that gives them a great deal of latitude with respect to these performance standards.

You may first think to call on your in-house or family attorney. Bad idea. Your average attorney understandably won’t have experience with how these contracts work and so won’t know which aspects are negotiable and which are not. Faced with these circumstances, you may be inclined to just go ahead and sign the “standard” contract, only to find out later that you’ve made a costly mistake.

In the end, it seems to me that anytime you contract for a private jet flight—putting your dollars and, more importantly, your safety and that of your family and business associates at risk, you should have an experienced attorney, who specializes in aviation transactions, review the contracts.