SherpaReport recently talked to Steve Santo, CEO of Avantair about the companies aircraft lease program, which it calls the Axis Lease.
"We're listening to our owner base and trying to break down the barriers to buying" said Steve Santo.
Leasing is an alternative to fractional aircraft ownership. In the current economic environment companies and people have been thinking harder about fractional ownership. There's really three big reasons that Steve gave why customers are a little more hesitant about fractionals, these are:
- People don't want to write a big upfront check - which is needed when you acquire a fractional share of an aircraft.
- There's an overall fear of commitment - typical fractional agreements are for 5 year periods.
- People are worried about residual values – some aircraft have seen their resale values drop as the world has gone through a recession.
Avantair created its lease program a while ago to address these issues. The lease offers all in pricing, so there's no fuel surcharge provided fuel is under $8. "This has been super popular, especially since people want to know exactly what their costs are" commented Steve.
The lease periods can be for 2, 5, 7 or 10 years, with 5 proving to be the most popular option (and as you might imagine, there aren't that many takers for the 7 and 10 year terms). Annual hourly usage is a minum of 50 hours per year and can then be increased in 5 hour increments. The pricing is a fixed $14,600 per month for a 5 year lease with 50 hours per year, which is equivalent to $3,500 per hour.
Avantair has just one aircraft type in its fleet, the Piaggio Avanti P180 (pictured above). This is a twin-engine pusher configuration turboprop aircraft, that can cruise at 450 mph. The company also offers fractional ownership and jet cards for this aircraft.
As a side note Steve commented that Avantair was incredibly busy going into this Labor Day holiday weekend. Nearly all the flights are personal as opposed to business trips, with the most popular destinations including the Bahamas, Cabo, Colorado and Utah, New York City, Dallas and Chicago. In particular the Bahamas has seen huge growth, largely driven by the accessibility, for instance the islands are a two and half to three hour flight time from Teterboro or White Plains airports.
If you're reviewing private aviation options and all the different products, then do download our comprehensive Guide to Private Aviation, which walks through all the things to consider.
Editorial update: Avantair filed for chapter 7 bankruptcy in 2013.