Time flies - Air Travel - buying prepaid flight time - Brief Article
Joan UrdangTIRED OF COMMERCIAL FLIGHTS but unwilling to shell out big bucks for fractional jet ownership? There's an alternative: Marquis Jet Partners Inc., Sentient, Delta AirElite, and others let members pay a flat rate for a set number of flight hours on a variety of airplanes. "Our market is midcap companies, not the Fortune 500," explains Marquis executive vice president Kenneth Austin.
For around $100,000 and $300,000, depending on aircraft type, Marquis customers buy flight time in 25-hour increments. Much like a phone card, an annual prepaid travel card allows time to be subtracted. Only actual flying time is deducted, plus six minutes for each takeoff and each landing.
New York-based Marquis must be on to something: first-quarter revenues and flight activity rose more than 350 percent and 220 percent, respectively, from the same time period in 2002.
That news doesn't surprise Joseph Moeggenberg, president of Cincinnati-based Aviation Research Group/US Inc. "Companies are getting smart about how they use corporate airplanes," he says. Although the program is more expensive than individual commercial airline tickets, membership offers much more flexibility and convenience. The planes can be available on as little as a few hours' notice, 365 days a year, and can use airports that commercial planes can't. And unlike with chartered flights, customers pay only for time they use.
Marquis customer Jimmy de Castro, former president and CEO of AMFM Inc. (now part of Clear Channel Communications), says the arrangement has "the benefit of ownership without the tax implications." Clients don't own an asset, ms with fractional shares, so membership is a T&E expense, not on the balance sheet. "The only negative," adds de Castro, now CEO of Chicago-based holding company Nothing But Net, "is how fast I burn through the hours."
DON'T COUNT ON IT
An REL survey found that 75% of multinational companies say they have little or no confidence in their cash-flow forecasts.
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