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image Week of February 24, 1999



Sikorsky To Foray Into Fractional Ownership With Buy

Sikorsky Aircraft announced at the HAI show in Dallas, TX that the company will acquire Associated Aircraft Group in New York. AAG will operate as a separate subsidiary of Sikorsky. The acquisition is expected to be completed by the end of next month.

Sikorsky Chairman and CEO Eugene Buckley said, "AAG is the premier charter helicopter operator in the New York area. We intend to build on AAG's proven capabilities in expanding their business and exploring - together with them - the introduction of helicopters for fractional ownership to the market."

Fractional ownership is a well-established, almost dominating factor in the business jet market, but has had a checkered history in helicopters. Three years ago a fractional concept in New Jersey tried and failed. In late 1997 a UK company ordered two Bell 206Bs for a program in the London area. The company has signed up 16 customers, according to Rolls-Royce, and has additional orders for a Bell 427 and a Bell 430. Just months ago, an operator in the Texas market, HeliFlite Shares, is attempting a fractional helo program with two Bell 430s. The company says it expects the first aircraft will enter fractional service in April with the second following shortly. According to the company, Bell Helicopter Textron is assisting HeliFlite with the program, making backup aircraft available to share owners until such time as HeliFlite can support the program with sufficient aircraft. HeliFlite is looking at regionally based operations in other parts of the U.S., most notably southern California.

Sikorsky's Buckley says AAG is "uniquely positioned to allow introduction of a high-quality fractional ownership program because it has both the operational infrastructure and a resident charter backup capability to allow promised service levels to be met." AAG already operates six helicopters, four of which are Sikorsky S-76s.

As more firms attempt to build a beach-head for helicopter fractional ownership, the industry is heartened by the backing of a major manufacturer. Many observers believe that OEM support is critical to get the market off the ground. For manufacturers the prospect of a strong helo fractional ownership market promises new and expanding markets. The best thing that could happen to this concept is for other manufacturers to jump on board, providing legitimacy and underwriting



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