by Staff Writers
Rio De Janeiro (UPI) Jul 18, 2011
Flight Options will buy Brazilian-made executive jets with $167 million loaned by a Brazilian bank.
Flight Options, the second-largest fractional jet company in the United States, said it has entered into a 3-year, $167 million financing agreement with Banco Nacional de Desenvolvimento Economico e Social to finance the company's purchase of Embraer Phenom 300 jet aircraft.
The deal is significant in a number of ways. It is the first-of-its-kind loan agreement between BNDES and a fractional jet operator that will be guaranteed by the Brazilian Ministry of Finance, advised by the Brazilian Export Credit Insurance Agency.
It fulfills Embraer's long-term objective to broaden its market share in direct competition with North American manufacturers of executive jets. Embraer has competed elsewhere successfully on price and other incentives that it offers with its aircraft.
"The fractional jet ownership model is rebounding from the global economic downturn, and by extending funding to this sector, Brazil's main long-term credit provider will help support an emerging recovery in corporate aviation and stimulate demand for a world-class aircraft," Flight Options Chairman Kenneth Ricci said.
"We are pleased to enter into this landmark agreement with BNDES to help underwrite the acquisition of new Embraer Phenom 300 jet aircraft," Flight Options Chief Executive Officer Michael Silvestro said.
"This financing agreement underscores the bank's confidence in our financial stability, operating strength and future prospects. Demand from our private jet owners and members continues to improve and the BNDES financing will facilitate our owners' access to this extraordinary aircraft."
In 2007, Flight Options placed an order for 100 Phenom 300 business jets, plus an option to purchase 50 more. The total value of the order exceeds $1.2 billion at the Phenom 300's current list price.
The company began taking delivery of the aircraft in May 2010 and has eight Phenom 300 jets in service. Flight Options anticipates having 15 Phenom 300 jets in operation by the end of 2011.
Earlier this year, Flight Options announced a 467 percent increase in fractional jet sales and a 46 percent increase in JetPASS card sales during the first quarter of 2011.
The Phenom 300 combines a midsize-jet cabin, industry-leading passenger and cockpit technology with extremely low occupied hourly rates. It provides what the manufacturer says is the greatest range in light-jet category, flying a distance of 2,298 statute miles at speeds up to 518 miles an hour. It has a maximum cruising altitude of 45,000 feet and a spacious cabin designed in collaboration with BMW Group DesignworksUSA.
Flight Options has headquarters in Cleveland and serves more than 1,300 owners and clients.
Fractional aviation covers fractional ownership of aircraft. The first such program was launched in 1986 by NetJets. With fractional jets, customers buy a "share" of a plane, rather than an entire plane and have guaranteed access to the aircraft in a company's fleet, with options to downgrade or upgrade their ownership.
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