This proposal examines the commuting challenges faced by executives at Acme Manufacturing, headquartered in Akron, Ohio, who travel weekly to satellite offices in Chicago, Seattle, and Miami. Current commercial airline costs exceed $90,000 per month when travel expenses are included. The paper evaluates aircraft options, identifies the Learjet 45 as most suitable, and analyzes on-demand aviation services — particularly Flexjet's fractional ownership program — as a cost-effective alternative to both commercial airlines and outright aircraft ownership. Using marginal cost principles, the proposal concludes that fractional ownership offers significant savings, operational flexibility, and ancillary benefits such as hotel partnerships and the ability to resell unused flight hours.
The executives of Acme Manufacturing, headquartered in Akron, Ohio, need to commute regularly to remote satellite offices in Chicago (ORD), Seattle, and Miami (MIA). This is a weekly undertaking for at least seven executives. The core problems are twofold: unjustified travel costs that have climbed to $75,000 per month, and a dependency on commercial airline schedules. An additional $15,000 is incurred in travel expenses, creating further productivity concerns.
This report identifies a practical solution to these problems. While outright aircraft ownership could address the scheduling issue, it would introduce greater costs and administrative burdens — including maintenance overhead, additional staff salaries for pilots and ground crew, and fuel management. The recommended alternative is to engage an aviation services provider that offers exclusive, on-demand aircraft access at a fraction of the total ownership cost, eliminating the need for the company to develop in-house aviation expertise. Specifically, this report examines the services of Flexjet, a company that offers precisely this type of fractional ownership arrangement.
Commuting is a significant factor in executive life, shaping decisions about where to live, where to work, and when to travel. It is in turn influenced by employees' personal values, employer expectations, and broader organizational demands (Boarnet & Crane, 2001). The central question here is whether the delays and costs associated with current travel arrangements can be reduced without creating a new set of operational burdens.
Owning and operating a dedicated company aircraft would not reliably eliminate delays, and the overhead costs would likely exceed current expenditure. The more viable path is aircraft sharing — a solution that is both practically available in the market and financially attractive. The cost of such shared services depends primarily on the type of aircraft required, so the analysis begins with identifying the most suitable aircraft for Acme's needs.
The Learjet 45 is identified as the ideal aircraft for this proposal. It has been selected for characteristics that align well with Acme's travel requirements and the comfort expectations of senior executives. The aircraft is operated by a crew of two and can carry up to nine passengers. Key specifications include a floor-level width of 1 meter, a maximum cabin height of 1.5 meters, a usable floor area of 6.1 m², and a baggage compartment of 1.4 m². It is powered by two Honeywell TFE731-20 turbofan engines, carries fuel weighing 2,155 kg per flight, and has a maximum range of 3,926 km with four passengers at a cruising speed of 859 km/h. Takeoff noise is rated at 74.4 EPNdB, making it suitable for use at major metropolitan airports (aerospace-technology.com, 2011).
In practice, only one or two executives are likely to travel at any given time, and the aircraft's range is sufficient to cover all three satellite office locations. Compared with other aircraft options, the Learjet 45 best meets the operational requirements.
The option of purchasing an aircraft outright is set aside at this point. Doing so would effectively require Acme to operate a parallel aviation business, and more than one aircraft would likely be necessary to cover all routes simultaneously. That scenario would be more costly than the company's current commercial airline expenditure. The alternatives — charter flights, shared ownership, or a partnership arrangement with an aviation provider — are therefore examined in detail. Research into providers offering Learjet 45 service identified Flexjet as offering the most comprehensive solution for Acme's needs.
This section explores the available on-demand aviation methods, using Flexjet as the primary case study. Before examining specific options, it is important to establish the economic framework guiding the analysis. The guiding principle is marginal cost pricing, as outlined by economist Harold Hotelling. His framework suggests that differential travel rates based on distance can be used to calculate the net gain from switching between service models, and that the option yielding the greatest consumer surplus should be selected (Ward & Beal, 2000). Cost, therefore, is a central criterion in evaluating the options.
For on-demand charter brokerage, Flexjet calculates pricing based on aircraft selection and availability. Charges include flight fees, fuel surcharges, applicable taxes, and estimated international fees (Flexjet, 2011b). This structure is broadly consistent with industry norms, but may introduce unpredictable additional costs that could make it difficult to budget reliably — and thus unsuitable as a long-term solution for Acme.
A more attractive option offered by Flexjet is its round-trip pricing program (Affluent Magazine, 2011). Under this arrangement, a customer purchasing a minimum of 100 flight hours per year acquires a fractional ownership stake in a specific aircraft. This program is relatively new in the fractional jet ownership market and is structured to be cost-effective. The company retains the option to exit the arrangement with three months' notice. Fractional ownership removes the administrative burden of aircraft management entirely — Flexjet handles all operations — while guaranteeing exclusive, round-the-clock availability every day of the year (Affluent Magazine, 2011).
This program represents a compelling alternative to full aircraft purchase. Additional flexible programs are also available, including Versatility Plus, which allows the purchasing company to sell unused flight hours back to other users. Flexjet reports that more than $26 million has flowed back to fractional owners through this mechanism. The AnyTime option further allows customers to purchase additional run-time benefits as needed. All contracts under these programs are designed to be flexible and can be tailored to the customer's requirements (Affluent Magazine, 2011).
"Flexjet program options and marginal cost analysis"
"Fractional ownership pricing and hourly rates"
"Flexjet costs vs. current airline spending"
"One-year Flexjet trial recommended"
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