The fractional share marketplace is changing rapidly in response to the lengthy global recession. While most fractional operators already reduced staffing levels to match lower levels of customer activity, it wasn’t until September 11 that NetJets announced layoffs of 350 nonunion employees. These were the first en masse terminations since David Sokol was named chairman and CEO of NetJets on August 4, following the resignation of NetJets founder Richard Santulli. In making the announcement, Sokol also noted, “We have initiated other actions to reduce expenses throughout the business.”

The news isn’t all bad, and some recent statistics support the prevailing view that the aviation industry is bumping along the bottom and poised for a rebound. According to flight-tracking service FlightAware, fractional flying activity climbed 11.1 percent in July versus June 2009, although compared to last July, the fractional segment’s activity was down by 17.1 percent. ARG/US’s TraqPak evaluation of business aircraft activity reflects a similar drop in fractional activity during July 2009 versus July 2008, with a 17.6-percent decline. ARG/US further breaks that down into aircraft categories, showing that small-cabin- jet activity dropped the most, while turboprop activity grew 21.5 percent (see Graph 1). It is interesting to note that according to ARG/US, fractional aircraft activity
decreased the most in that time period, compared to Part 91 and 135 operations.
According to JPMorgan’s monthly business jet activity analysis, business aircraft flight operations grew during July, to 304,000, the first time since November 2008 that number was higher than 300,000. “Monthly flight ops are now up 16 percent off the February bottom,” the report noted, “and have increased sequentially for three consecutive months.” Flight operations, however, are still depressed below the historical level of 360,000 per month and for July are down 15 percent on a year-to-year basis.