Fractional Jet Ownership vs. Commercial Travel for Executives
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.
- Executive Summary: Overview of travel problem and proposed solution
- Preliminary Considerations: Why shared aircraft beats full ownership
- Aircraft Selection: Learjet 45 chosen for range and capacity
- Types of On-Demand Aviation Services: Flexjet program options and marginal cost analysis
- Flexjet Program Costs: Fractional ownership pricing and hourly rates
- Cost Comparison: Flexjet costs vs. current airline spending
- Recommendation: One-year Flexjet trial recommended
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What makes this paper effective
- The proposal follows a logical decision-making sequence — from identifying the problem, to selecting an aircraft, to evaluating service types, to comparing costs — making it easy for a business audience to follow and act on.
- It grounds the recommendation in a concrete cost comparison, contrasting the existing $90,000+ monthly expenditure against Flexjet's annualized program costs, which strengthens the business case.
- The paper acknowledges and dismisses less viable alternatives (full ownership, ad hoc charter) before settling on fractional ownership, demonstrating analytical thoroughness.
Key academic technique demonstrated
The paper applies marginal cost pricing principles — drawn from Hotelling's economic framework — to justify the selection of one aviation service model over another. This use of an economic theory to underpin a practical business recommendation is a strong example of applied economic reasoning in a corporate proposal context.
Structure breakdown
The proposal opens with an executive summary, then moves through four analytical sections (preliminaries, aircraft selection, service types, and program costs) before arriving at a cost comparison and a final recommendation. Each section builds on the previous one, narrowing the solution space progressively until only the Flexjet fractional ownership program remains as the recommended option.
Executive Summary
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.
Preliminary Considerations
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.
Aircraft Selection
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.
References
aerospace-technology.com. (2011). Lear Jet specs. Retrieved July 1, 2011, from
Affluent Magazine. (2011). Flexjet's innovative round trip pricing program. Affluent Magazine. Retrieved July 1, 2011, from
Boarnet, M. G., & Crane, R. (2001). Travel by design: The influence of urban form on travel. Oxford University Press.
Flexjet. (2011a). Flexjet costs: Pricing. Retrieved July 1, 2011, from
Flexjet. (2011b). Flexjet pricing — Charter. Retrieved July 1, 2011, from
Flexjet. (2011c). Flexjet forms alliance with Rosewood Hotels & Resorts, customers gain exclusive benefits. Retrieved July 1, 2011, from
Flexjet. (2011d). The versatility brochure. Retrieved July 1, 2011, from
Ward, F. A., & Beal, D. (2000). Valuing nature with travel cost models: A manual. Edward Elgar.
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