Flying Right

Like most frequent fliers, Umberto Fedeli realizes the drawbacks of traveling for business on commercial airlines: The exorbitant cost of tickets purchased fewer than seven days in advance. The added expenses for a trip that doesn't include a Saturday-night stay. Delays that result in missed meetings and snarled schedules. Check-in policies that can cost last-minute arrivals a seat on an overbooked flight. Routings that require passengers to fly in the opposite direction of their destination to make a connecting flight.

'You have to fly somewhere to fly somewhere to fly somewhere,' Fedeli says. 'You sit there and say, I want to go here. Why am I going backwards?' '

But 12 years ago, the president and CEO of The Fedeli Group, a commercial insurance and consulting firm in Independence, chartered his first airplane. 'I had a meeting in a real small town in West Virginia, about a six-hour drive away, and no airline flew there,' he says. He called Corporate Wings, a local charter service that offers flights with direct access to more than 5,000 small airports nationwide, including one near the hamlet in which he had business. Corporate Wings helped him eliminate the hassle of taking a connecting flight to an airport located an hour or more away.

'You come and go based on your schedule,' Fedeli says. 'When you fly commercial, it's like RTA in the sky. When you charter, it's like having your own car. You have the convenience of going and coming when you need to.'

Time is Money

Today, Fedeli's company is involved in a fractional-jet-ownership program that has changed how he travels and, in turn, does business. Many executives believe that chartered flights and corporate jets are luxuries their travel and entertainment budgets simply can't support. But experts say such options may actually meet with the company bean counter's approval — under certain circumstances.

For example, a company that's arranging a last-minute trip for a group of employees may save money by chartering an airplane instead of buying tickets for a commercial flight. 'It depends on where you're going,' says Amo Judd of Crow Executive Air, which offers charter services out of Cleveland's Burke Lakefront Airport. 'For some cities, it makes sense.' He says New York City is a prime example.

But Judd admits his company can't compete with the airlines on a dollar-for-dollar basis to cities such as Chicago or Baltimore — both serviced by affordable-fare carrier Southwest Airlines. The true value of charter services, he says, lies in the time saved by using them, especially since Sept. 11. He questions whether an executive's time is best spent waiting 90 minutes to two hours to clear security checkpoints at a commercial airport every time he or she has to fly.

'Commercial travel has just become so hit-or-miss these days,' he says. 'They shut down airports for any number of reasons. If you have a meeting that you absolutely have to be at, now it usually means leaving the day before. You incur hotel and meal expenses.'

Current events also have contributed to the unlikelihood of doing business in multiple cities in one day. 'What was a one-day trip is now perhaps a two- or even a three-day trip that takes you away from the office and productive time there,' says Judd.

Khalid Bahhur, commissioner of Burke Lakefront Airport, stresses that the facility he oversees has security practices and procedures in place. Passengers traveling out of the United States, for example, are subject to a review of their itinerary and luggage. 'But the security issues here are somewhat less of a problem than at major airports,' he says, because the airport serves a relatively small volume of passengers. Travelers, therefore, can park in a lot directly in front of the terminal or be dropped off near one of the airport's two hangars.

Another bonus: Charter customers needn't worry about rescheduling flights when meetings end early or run long; their plane will be at the airport. The time saved negotiating airline schedules can be used to seal deals. 'You can visit four, five, six locations in a short period of time,' Fedeli says. 'It may take you a week to accomplish a mission like that if you were trying to do it on a commercial airline.'

Judd adds that passengers can conduct business in the privacy of a chartered jet, something they might hesitate doing among strangers.

Crow Executive Air's eight airplanes are normally available for charter on an hourly basis. Rates range from $500 an hour for a Navajo, a nonpressurized piston-engine aircraft that holds six, to $2,500 an hour for a Hawker jet, which seats seven. Judd's quote to customers includes landing fees and time the plane and pilot spend on the ground waiting for passengers to return and continue travel. 'Waiting time' runs between $50 and $100 an hour. He says he can usually have a plane available for a customer with two hours' notice.

But Fedeli says customers can't always depend on that kind of last-minute service. On a few occasions, he says, his company found itself without a plane after contacting numerous charter services. So in 1999, The Fedeli Group became a member of a fractional-ownership program offered by Flight Options, an operation based at Cuyahoga County Airport in Richmond Heights.

Condo in the Sky

Steven Brechter, chief operating officer of Executive Jet, calls fractional jet ownership — an idea the Woodbridge, N.J.-based company's founder conceived in the mid-1980s — 'the time-share condo concept in the sky.'

'You own a piece of the airplane instead of the whole airplane,' he says. 'That piece of the airplane equates to so many hours of use per year.' He says that fractional ownership generally becomes economically feasible when total annual chartered flight hours reach 80 or more.

Heather Dynes, Flight Options' director of corporate communications, calls her Cleveland-based employer —which recently merged with Raytheon Travel Air of Wichita, Kan. — 'the fastest-growing fractional-jet-ownership program in the country.' The company boasts 1,600 fractional owners and a fleet of 90 planes comprised of eight different makes/ models, from a Cessna Citation Jet, which seats five, to a Gulfstream IV, which seats 14. She says most owners purchase a one-eighth share (100 hours per year) or a one-fourth share (200 hours per year) in their plane of choice.

An owner who seeks a one-eighth share of the popular seven-seat Beechjet would pay a one-time purchase price of $550,000, a monthly management fee of $8,770 and an occupied hourly rate of $1,400. The monthly management fee — which, like the purchase price, increases in proportion to the share of ownership — covers the cost of pilots, maintenance, hangar space, insurance, and in-flight snacks, meals and beverages.

According to Fedeli, if an owner notifies Flight Options of his or her travel plans a prescribed number of hours before departure, the owner is guaranteed a pilot and plane. The number of hours, anywhere from four to 10, is determined by share size and aircraft type. 'The response time is excellent,' Fedeli says.

But Brechter acknowledges that fractional ownership is not appropriate for the company that wants a cost-effective alternative to commercial-airline fares. As with charter services, the value lies in the flexibility that allows owners to better use their time. And owning a piece of the plane can mean more free time for the boss.

Smaller is Better

Of course, cost is often the overriding factor in determining corporate-travel policy for many companies. Therefore, their employees are generally limited to flying on commercial airlines (see 'Friendlier Skies,' above). Rob Turk, executive vice president of Professional Travel, a North Olmsted-based travel agency with offices throughout Northeast Ohio, says that when it comes to saving money on airline tickets, the ability to plan in advance and remain flexible are more important than ever.

'Since Sept. 11, the carriers have generally reduced their schedules by 20 percent, so there are fewer flight options than there used to be,' he says. Turk adds that airlines are using smaller jets in many markets, which means there are fewer seats on flights.

Thomas Cowan, travel services operations director for the Ohio Motorists Association/AAA Travel, says companies that fly often may be able to negotiate volume discounts, either on their own or with the help of a corporate-travel agency or travel-management company.

A firm that buys 500 round-trip tickets to the same destination each year may be able to negotiate a flat rate or an up-front discount. Travel-management companies, he says, analyze travel trends for bargains and have computer software programs that continually search for lower-fare alternatives once an airline reservation is made.

Flying out of and/or into a different airport may also cut fares dramatically. Akron-Canton Regional Airport, located 50 miles from downtown Cleveland near Interstate 77, has offered the lowest average fare in Ohio for the last two years, according to the U.S. Department of Transportation.

'Frankly, other airports are lower to certain destinations,' says Kristie Van Auken, the airport's director of marketing and communications. 'But when you put the whole pot together, Akron-Canton comes up with the lowest average fare.'

Some of the numbers Van Auken quotes make a drive from Cleveland sound worthwhile. For example, fares for flights to Atlanta from Akron-Canton average 36 percent less than from Cleveland Hopkins International Airport. The average savings climb to about 40 percent on flights to Dallas and Houston. Significantly lower prices can also be found on flights to New York City.

On the day Inside Business talked to Van Auken, a round-trip ticket for midweek travel on U.S. Airways from Cleveland Hopkins to New York City's LaGuardia Airport with a layover in Pittsburgh — purchased three days in advance with no Saturday-night stay — cost $1,007.22. In contrast, on the same dates, a round-trip ticket from Akron-Canton to LaGuardia with a change of planes in Pittsburgh cost $371.25.

Van Auken attributes the price breaks to the presence of Orlando, Fla.-based AirTran Airways, an affordable-fare carrier that forces other airlines flying out of Akron-Canton to keep their fares low.

Companies also can cut air-travel costs by flying into other secondary airports or 'metro periphery markets' — Manchester, N.H., instead of Boston, for example, or even Chicago's Midway Airport instead of O'Hare International Airport.

'A lot of times, they are connections,' Van Auken says of the cost-cutting flights out of Akron-Canton. 'But a lot of times, the fare difference can be up to $800. Everybody has a different way of assigning value to their time. But we find that small businesses are more than willing to take that connection to save that kind of money.'