# FRACTIONAL MATH

## Once upon a time, long ago and far away, a gloom descended across the land. Money ceased to flow into Wichita, aircraft ceased to emerge from factories, and the people were sore afraid. Then a great voice said, “Let there be fractionals!”

Lo, the sun arose, the gloom evaporated, and once again happiness reigned in the land of general aviation.

It was danged near that dramatic.

It would be truly difficult to overestimate the impact of fractionals on general aviation. All of a sudden, all God’s chillun got a piece of an airplane, and a new, turbine airplane at that. Rivets are bucked, engines are built, avionics are installed, charter thrives, pilots fly, and fuel flows, all because of fractionals.

And I wonder, as the country song goes, “Why didn’t I think of that?”

Today, even as everybody in the country rushes to expand the fractional idea to include owner-flown piston aircraft, the original big boys of fractionals are perhaps moving into phase two.

An early indication of this came a few years ago when NetJets gave a presentation to Exxon’s Tiger Spirit dealer meeting. The speaker pointed out that it had indeed been proved that profit could be made selling fractionals; now they had to prove they could make a profit operating those aircraft. I do not recall that a tremor went through the industry at that time, but it might well have been appropriate.

Fractionals have become major buyers of jet fuel, and thus very important to traditional FBOs. Furthermore, fractional operators stated from day one that they intended to stay in their core business, and harbored no desire to expand into the FBO end of the industry. Now we have to wonder if that is changing.

Large fractional operators have already been haggling for fuel price, and why should anyone be surprised? Large fuel customers have always haggled, and fractional operators certainly qualify as large customers. The question now is how far will this go? So far, they seem to be happy haggling for fuel contracts with and through the FBO, but how long will that last?

Seeking lower costs and/or better service, will they eventually choose to become FBOs themselves? Remember, we saw this happen in the early days of corporate aviation. At any airport where a fractional operator is a major customer of fuel and services, sooner or later the idea of becoming the provider will almost assuredly arise. If history repeats, this idea will loom largest where service is poor and prices seem rapacious.

Good service and reasonable prices — delivered by friendly, enthusiastic people — have always been important when it comes to hauling important people in expensive aircraft. Pilots and aircraft operators are at least as concerned with the care of their passengers as they are with price. The fixed base operator that provides great service is much less likely to lose a big customer over a few cents per gallon.

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