When William Clark's phone rang during last year's economic slump, more often than not the caller sought his legal advice on escaping what had become the financial burden of the corporate jet.
"We spent more time negotiating cancellation penalties on executive jets than we spent on negotiating deposits and new contracts," said the Toronto-based aviation lawyer, underscoring how 2009 was a year that the corporate jet sector would rather forget.
But as the economy gradually improves, those wanting to break their jet contracts are fading. New customers are starting to call, especially after heightened security measures at airports were introduced following the attempted bombing of a Detroit-bound commercial jet flying from Amsterdam on Christmas Day.
For high-net-worth shoppers seeking to avoid the hassle of commercial flights, now may be the time to purchase a new or used jet - or consider fractional ownership that offers a "time-share in the air."
If you want to come to the party now, bring more money for the newer jets. Jamie Spears, president of J.A. Spears & Associates Ltd.
Boosters of corporate jets say the aircraft allow executives to work productively on confidential files. They also can avoid long lineups for commercial flights.
"There are some signs of a recovery for business jets, just not as fast we would like it," Mr. Clark said.
The private jet sector, still stinging from the recession, has yet to recover from a public relations fiasco in November, 2008, when the heads of the Detroit Three auto makers boarded executive jets for Washington, D.C., seeking billions of dollars in loan guarantees.
"Instead of those guys saying, 'My time is valuable and I used my plane to get here,' they put their tails between their legs and created the impression that it was a bad thing for them to use executive jets. That incident is going to damage the jet industry for a while," Mr. Clark said.
Some used-jet prices were discounted by one-third to one-half during the recession, said George Rependa, president of Executive Aircraft Services Inc., an aviation consulting and jet brokerage firm.
Mr. Rependa said he has been advising several firms that have sensed there will be good deals in 2010, with the prospective buyers coming from Canada's resource and technology sectors.
"There's still a stigma to having a corporate jet, but it's becoming an accepted business tool, rather than an absolute taboo," he said. "There's a slow climb back."
While the bargain-basement deals have gone, now is still a good time for corporations to go shopping, including for used jets, said Jamie Spears, president and owner of J.A. Spears & Associates Ltd., a Toronto-based jet consulting and broker firm.
For instance, a five-year-old Dassault Falcon 2000EX could be purchased last fall for between $21-million and $29-million, depending on the plane's condition and features.
Things aren't as bad as last year, but they aren't exactly going gangbusters, either. Jet prices are still soft. Before you have growth, you need a recovery. Sam Barone, president of the Canadian Business Aviation Association
Prices in recent weeks for jets that are 10 years old or newer have strengthened, Mr. Spears said.
"If you want to come to the party now, bring more money for the newer jets," he said.
Prices for jets more than 20 years old remain depressed, he said.
On-the-go executives often need quick access to remote sites, Mr. Spears said, emphasizing that private jets are able to take advantage of an array of airports. There is greater flexibility in determining where to take off and land in a business jet, relieving managers from the hassles and crowds in flying commercial, renting a car and having to drive two or three hours to a remote site, he said.
Corporate jets play crucial roles when transporting executives and staff in key sectors of the Canadian economy, including petroleum and mining, said Sam Barone, president of the Canadian Business Aviation Association.
With a jet, executives can maintain productivity, especially at companies that operate numerous plants across the continent, he said.
Mr. Barone said "political grandstanding" in the United States cast a negative light on private planes, but increased airport security since Christmas Day has spurred renewed interest.
From purchasing to leasing to chartering, the jet industry is "cautiously optimistic" about being on a gradual upswing, Mr. Barone said.
"The manufacturers are starting to get more calls and more interest for new jets as economic activity inches upward.
"Things aren't as bad as last year, but they aren't exactly going gangbusters, either. Jet prices are still soft. Before you have growth, you need a recovery," he said.
Industry analysts say overcapacity remains in the global jet market.
Stan Kuliavas, director of business development at AirSprint Inc., agreed that for the jet industry - whether it's leasing, chartering or some type of ownership - patience will be a virtue during a slow recovery.
"The whole aircraft market is going to take a little while to come back," he said.
TIME SHARE IN THE AIR
For those who would rather not buy a jet, there are charters. Charter operators include Vancouver-based London Air Services, Toronto-based Skyservice Business Aviation Inc. and two Montreal-based firms, Execaire Inc. and ACASS Canada Ltd.
Shoppers also have the option to buy a portion of a plane giving them the right to book flights at hourly rates, said Stan Kuliavas, director of business development at AirSprint Inc., which offers "fractional ownership," also known as "time share in the air."
Obtaining one-16th ownership in a Pilatus PC-12 turboprop, which seats six or seven, costs $290,000 (U.S.) through AirSprint. That provides the right to 50 hours of flying time annually, as long as the fractional owner pays a monthly management fee of $2,925 (Canadian) plus a "variable rate" of $1,050 for each hour of flying by a private pilot.
Those with deeper pockets can opt for a Citation XLS jet, which seats up to nine passengers. The Citation carries a purchase price of $775,000 (U.S.) for a one-16th stake in the plane, a monthly management fee of $6,940 (Canadian) and variable rate of $3,170 for each hour of flying time.
Brent JangReport Typo/Error