The recession has dealt an enormous blow to the fractional share industry. Rapidly declining used-aircraft prices and fewer flying hours have affected the industry to the point that most fractional operators have shrunk during the past year, deferred new aircraft deliveries, cut staffing and explored new ways to keep flying. Business has been so bad at the fractionals that some pundits are questioning whether the business model is broken.
That huge changes have occurred among the fractionals was evident when holding company Berkshire Hathaway released second-quarter financial results for its NetJets property in early August. Compared with the first six months of last year, this year NetJets revenues declined $550 million or 43 percent, according to Berkshire Hathaway. “The declines reflected an 81-percent decline in aircraft sales as well as a 22-percent decline in flight operations revenues primarily due to lower flight revenue hours.”
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